Enforcing Foreign Arbitral Awards: The Quest for the Competent Court in Oman
Dispute Resolution / Oman
Oman faces legal uncertainties in enforcing foreign arbitral awards due to differing practices between the CCPL and Omani Arbitration Law. Recent court decisions challenge historical norms, causing confusion over jurisdiction & enforcement protocols.
Law Update: Issue 367 - Saudi Arabia & Competition Focus
Abdelhaleem Mohammed AhmedSenior Counsel,Dispute Resolution
This Article focuses on the recent trend noticed in connection with a few Primary Court judgments rendered in connection with applications for recognition and enforcement of foreign arbitral awards issued in a country member of the 1958 United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “1958 New York Convention”).
Historically, the settled practice was that foreign arbitral awards are typically recognised and enforced through the legal framework prescribed for enforcing foreign judgments pursuant to the Civil & Commercial Procedures Law promulgated by Sultani Decree No. 29/2002 (the “CCPL”)
Recently, a diversion from the settled and established historical practice has been noticed in judgments that have been issued by one of the primary courts in Oman rejecting applications for recognition and enforcement of foreign arbitral awards, citing lack of subject-matter jurisdiction as the court considers that the proper mechanism of enforcing foreign arbitral award is the legal framework prescribed for enforcing awards issued in domestic and international arbitrations that were subject to the Law of Arbitration in Civil & Arbitration Disputes promulgated by Sultani Decree No. 47/1997 and its amendments (the “Omani Arbitration Law”). Such directional shift places litigants in a dilemma as to the legal framework that ought to be applied for recognising and enforcing foreign arbitral awards, especially since no cassation proceeding currently considered before the Supreme Court as the highest Court in Oman to decide on the legality of this shift.
Shortly after the issuance of the Omani Arbitration Law on 28 June 1997, Oman became a member of the 1958 New York Convention in 1998 as it acceded to the convention by the issuance of Sultani Decree 36/1998 on 10 June 1998. A few years thereafter, the CCPL was issued on 6 March 2002.
The CCPL which was issued after the Omani Arbitration Law and Oman’s accession to the 1998 New York Convention, provides clear and specific legal framework for enforcing arbitral awards issued in a foreign country. Article 353 of the CCPL provides: “The preceding Article [352] shall apply to the arbitrators' awards issued in a foreign country provided that the said award is issued on a subject in which arbitration is permissible according to the laws of Oman, and enforceable in the country in which it was issued.”
Article 352 of the CCPL deals with enforcement of judgments issued in countries other than Oman. It essentially allows for enforcement of a foreign judgment if there is reciprocity between Oman and the country in which the judgment was issued. It provides that an enforcement order shall be requested before the primary court, composed of three judges, in whose jurisdiction the enforcement is sought, according to the usual procedures for filing a lawsuit, and lists the requirements for granting the order for enforcement of the foreign judgment.
As can be seen, the provisions of Article 352 of the CCPL bestow the jurisdiction of adjudicating an application for issuance of an order to enforce a foreign judgment on the tri-judge primary court circuit according to the usual procedures for filing a lawsuit—meaning a normal statement of claim, and that Article 353 of the CCPL clearly and unequivocally provides that the provisions of Article 352 of the same law applies to enforcement of arbitral awards issued in foreign countries.
A not insignificant number of foreign arbitral awards have historically been recognized and enforced in Oman pursuant to the legal framework prescribed under the CCPL.
Article 9 of the Omani Arbitration Law provides that the jurisdiction of adjudicating matters which the Omani Arbitration Law refers to the Omani judicature rests with the court having jurisdiction in relation to the dispute in accordance with the Judicial Authority Law; and if, however the arbitration is an international commercial one, whether taking place in Oman or abroad, the jurisdiction shall lie with the Court of Appeal in Muscat.
Enforcement of arbitral awards pursuant to the Omani Arbitration Law shall be sought according to Article 56 of the Omani Arbitration Law before the President of the competent primary court or his delegate; through a petition for a writ for order of enforcement as opposed to a lawsuit to be filed before the tri-judge primary court circuit as provided for under the CCPL. The application for writ for order of enforcement shall be accompanied by: (a) the original award or a signed copy thereof; (b) a copy of the agreement to arbitrate; (c) certified Arabic translation of the award if it was not rendered in Arabic language; and (d) a copy of the minutes evidencing depositing of the award with the competent court.
Pursuant to Article 58 of the Omani Arbitration Law, enforcement of an arbitral award shall not be admissible if the time for bringing an action for annulment of the award has not expired. Additionally, it shall not be permissible to order enforcement of an arbitral award pursuant to this Law without ascertaining: (a) the award does not conflict with a judgment previously rendered by the Omani courts on the subject-matter of the dispute; (b) there is not anything in it contrary to public order in Oman; and (c) the award was properly notified to the person against whom it was rendered. While the Omani Arbitration Law doesn't permit appealing the order granting the enforcement, rejecting to issue such order is appealable.
As evident there are two distinct processes for enforcing arbitral awards and there are different judicial authorities before which the enforcement is to be sought in Oman. The recent judgments rendered by tri-judge primary courts circuits denying jurisdiction to adjudicate application for enforcement of foreign arbitral award which are not subject to the Omani Arbitration Law, reveal that the two distinct and different process for enforcing arbitral awards existing in the CCPL and the Omani Arbitration Law led the deciding courts to deviate from the historically settled practice for enforcing foreign arbitral awards that are not issued pursuant to the Omani Arbitration Law.
No doubt that the enforcement process prescribed under the Omani Arbitration Law applies to domestic arbitrations and to international arbitrations, which its parties agreed to subject to the Omani Arbitration Law. The Omani Arbitration Law is clear in this regard, as it provides in Article 1 that the provisions of the Omani Arbitration Law apply to arbitrations that take place in Oman, or if the arbitration is an international commercial arbitration taking place abroad in which the parties agreed to subject it to the provisions of this law.
Less clarity appears to exist with respect to the process and mechanism ought to be applied in enforcing arbitral award that are issued in a foreign country, under to a foreign arbitration law.
The resolution of this lack of clarity lies within the provision of Article 1 of the Omani Arbitration Law, which limits the application of its provisions to domestic arbitrations and international commercial arbitrations in which its parties agreed to subject it to its provisions, and in the explicit provision of Article 353 read with Article 352 of the CCPL. However, unless the Supreme Court says its final word in this issue or either legislative amendments are introduced to either the CCPL or the Omani Arbitration Law to resolve the potential double mechanism for enforcing foreign arbitral awards, litigants face uncertainty concerning the applicable legal framework for enforcing foreign arbitral awards issued under foreign arbitration laws, and lower courts may potentially issue contradicting judgments in this respect.
Two different and distinct legal frameworks and mechanisms for enforcing arbitral awards exist in the CCPL and the Omani Arbitration Law. Historically, the tri-judge primary courts, pursuant to the provisions of the CCPL, assumed jurisdiction of adjudicating cases for recognition and enforcement of foreign arbitral awards issued under foreign arbitration laws. Even though the scope of application of the Omani Arbitration does not extend to international arbitrations that are not subject to it, the existence of the two legal frameworks and two mechanisms led to the issuance of some judgments on applications for enforcement of foreign arbitral awards submitted pursuant to the provisions of the CCPL to the tri-judge circuit of the primary court in which the court ruled that it lacks subject-matter jurisdiction, relying on the provisions of the Omani Arbitration Law, not the CCPL's, contrary to the settled practice.
Unless a legislative amendment is made to either the Omani Arbitration Law or the CCPL, or unless the question of jurisdiction to hear claims to enforce foreign arbitration awards issued under a foreign arbitration law is resolved by the Supreme Court, there would remain high possibility of contradicting and conflicting rulings being issued by the lower courts in this regard. In addition, the enforcement of foreign arbitration awards will face difficulties and delays contrary to the intended purpose of Oman’s accession to the 1958 New York Convention.
For further information,please contact Abdelhaleem Mohammed Ahmed.
Published in April 2024
