Enforcement of Foreign Arbitration Awards in Oman – Monetary and Non-Monetary Awards

Enforcement of Monetary and non-Monetary Foreign Arbitration Awards in Oman involves certain steps and considerations. Those are outlined as follows:

Relevant regulations

The following regulations are related to the enforcement of foreign arbitration awards in Oman:

1. United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention “or “Convention”).
2. The Law of Arbitration in Civil and Commercial Disputes No. 47/1997 (“Arbitration Law”), which is based on the UNCITRAL Model Law; and
3. Civil and Commercial Procedures Law No. 29/2002 (“Procedural Law”)

Procedures for Enforcement Monetary and Non-Monetary Foreign Arbitration Awards in Oman

At the outset, the law did not distinguish between enforcing a monetary and non-monetary arbitration awards, and both should be subject to the same provisions.

As per article 352 of the Procedural Law, judgments and orders issued in a foreign country may be enforced in the Sultanate of Oman under the same conditions prescribed in the law of such foreign country for the enforcement of judgments and orders rendered in Oman.

The application for enforcement shall be submitted to the Primary Court, composed of three judges, in the jurisdiction of which enforcement is to take place, by following the normal procedures required for filing an application in court. The order of enforcement may only be issued after verifying the following:

1. The judgment or order is rendered by a competent judicial authority, in accordance with the rules of judicial international jurisdiction prescribed in the country which rendered it; that it has become final and that it was not issued by fraudulent means.
2. The parties to the action object of the foreign judgment have been summoned to appear before the court and were properly represented.
3. The judgment or order does not include a claim based on the violation of one of the laws in force in Oman.
4. It is not in contradiction with a judgment or order previously rendered by a court in Oman and does not violate public policy or morality.
5. The country which rendered the judgment to be enforced accepts to enforce on its territory judgments rendered by Omani courts.

All applications for enforcement must be submitted electronically and signed by an Omani lawyer. After the application is submitted, the court will notify the plaintiff of the successful submission and the date of the first hearing.

It is important to note that decisions issued by the Primary Court can be appealed to the Court of Appeal, and decisions from the Court of Appeal can be further challenged before the Supreme Court, in accordance with the relevant articles of the Procedural Law.

The aforementioned procedures apply to both foreign judgments and arbitration awards as stipulated in Article 353 of the Procedural Law. Additionally, the dispute must be subject to arbitrability under Omani law and enforceable in the country where it was issued.

Another route can be considered for the enforcement of foreign arbitration award in Oman. According to Article 355 of the Procedural Law, the rules provided for in the enforcement of foreign judgments and orders must not contravene the provisions of treaties between Oman and other States in this regard.

Pursuant to Article 3 of the New York Convention, each contracting state shall recognize arbitral awards as binding and enforce them in accordance with the procedural rules of the territory where the award is relied upon, under the conditions specified in the subsequent articles. The recognition or enforcement of arbitral awards covered by the Convention shall not be subject to substantially more onerous conditions or higher fees than those imposed on the recognition or enforcement of domestic arbitration awards.

Given that Oman is a contracting state to the Convention, the winning party has the flexibility to either file a new case before the Primary Court or submit an Order to Petition to the President of the Court of Appeal. The Order on Petition process is simpler than the standard case filing proceedings, thereby confirming that Oman is effectively applying the provisions of the Convention.

New York Convention

Oman has been a contracting state of the New York Convention since 1999, pursuant to Royal Decree 36/1998 issued on June 10, 1998.

As per article 5 of the Convention, recognition and enforcement of the award may be refused, at the request of the party against whom it is invoked, only if that party furnishes to the competent authority where the recognition and enforcement is sought, proof that:

1. The parties to the agreement were, under the law applicable to them, under some incapacity, or the said agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made; or
2. The party against whom the award is invoked was not given proper notice of the appointment of the arbitrator or of the arbitration proceedings or was otherwise unable to present his case; or
3. The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration, or it contains decisions on matters beyond the scope of the submission to arbitration, provided that, if the decisions on matters submitted to arbitration can be separated from those not so submitted, that part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced; or
4. The composition of the arbitral authority or the arbitral procedure was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place; or
5. The award has not yet become binding on the parties or has been set aside or suspended by a competent authority of the country in which, or under the law of which, that award was made.

Recognition and enforcement of an arbitration award may also be refused if the competent authority in the country where recognition and enforcement is sought finds that:

1. The subject matter of the difference is not capable of settlement by arbitration under the law of that country; or
2. The recognition or enforcement of the award would be contrary to the public policy of that country.

Public Order Considerations

As per article 58 of the Arbitration Law, the court will ensure that enforcing the award does not contravene the public order in Oman. This is a critical factor, as any element of the award that is deemed contrary to public order may lead to refusal of enforcement. The Public Order argument is recognized in Arbitration Law, Procedural Law, and New York Convention.

 The public order is a group of fundamental interests of the community, means, the sum of the foundations and pillars upon which the structure and entity of the community are established, to the extent that the survival of this entity in a sound state is inconceivable without stability upon them. Therefore, the legal rules related to the fundamental interests of the community, that is, those related to public order, are imperative rules, individual will have no authority or power to contravene them. Among the rules related to public order are the rules of penal law, the rules concerning public freedoms, and the rules of judicial jurisdiction, except for territoriality jurisdiction. Also considered among the imperative rules related to public order are those related to the economic foundations of the community. The concept of public order is relative; its content varies from one community to another, what is considered public order in one country may not be considered so in another country. Moreover, this concept is relative in terms of time; what is considered public order in a country at one time may not be considered so at another time. For example, Western countries used to consider the indissolubility of marriage as a matter of public order, but this has evolved, with most of them now allowing the dissolution of marriage through divorce under certain circumstances.¹

Additionally, the court will not issue an order for the execution of an award if it conflicts with a prior decision made by Omani courts regarding the same subject matter. This reflects the principle of Res judicata, a well-established doctrine in Omani legal precedents.

Enforcing a non-monetary judgment!

Enforcing a non-monetary judgment does not require, per se, a specific procedures, aside from identifying the competent authority to which the order should be directed.

For example, in the case of a non-monetary judgment or arbitration award involving the transfer of shares in a commercial company, the application to the Court would include an order directing the Ministry of Commerce, Industry, and Investment Promotion to transfer the shares from the losing party to the winning party. Similarly, if the subject matter pertains to the transfer of vehicle ownership, the court order would be addressed to the Royal Oman Police.

Burden of Proof

The Defendant shall bear the burden of proof to demonstrate that the foreign arbitration award fails to comply with the requirements outlined in Article 352 of the Procedural Law. Nevertheless, when it comes to the public order argument, the court has the authority to independently address this issue and may refuse to enforce the judgment if it determines that enforcement would violate Omani public order.

The public order argument, which pertains to the maintenance of societal norms and the prevention of actions that could disrupt public peace, can be raised at any time during the court proceedings.

Conclusion

In conclusion, the enforcement of both monetary and non-monetary foreign arbitration awards in Oman is governed by a comprehensive legal framework that includes the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the Law of Arbitration in Civil and Commercial Disputes, and the Civil and Commercial Procedures Law.  The process requires adherence to specific procedures, including verification of the judgment's finality, proper representation of parties, and compliance with Omani public order. The burden of proof lies with the defendant to demonstrate non-compliance with these conditions, while the court retains the authority to refuse enforcement if it contravenes public order.

[1] Decision No. 15/2000 issued by Muscat Court of Appeal on 5 June 2000.