Oman / Dispute Resolution
Chelsea Pollard Paralegal, Corporate Commercial
Oman’s new arbitration centre issued its set of arbitration rules under Oman Commercial Arbitration Centre (OAC) Resolution No. (8) of 2020. The key differences between the OAC Arbitration Rules (OAC Rules) and therules pertaining arbitration centres in other jurisdictions are in relation to commencement of arbitration, jurisdiction, appointment of arbitrators, representation, witnesses, decisions and awards and fees and deposits.
A common struggle faced by claimants is the necessity under most arbitration rules to serve the notice of arbitration on the respondent in order to fulfil commencement requirements. Under the OAC Rules, the equivalent to the notice of arbitration under most rules is called the “Request for Arbitration” (Request), and rather than being served directly on the respondent, the claimant must file such with the Registrar of the OAC, who is then responsible for delivering the Request on the respondent. The arbitration is deemed to have commenced on the date that the Registrar receives the complete Request. If the arbitration commences on the date on which the Registrar receives the Request, claimants are then able to commence arbitration proceedings in circumstances where respondents could be difficult to locate or may try to evade service of proceedings. Following service of the Request, any response made by the respondent and further reply to a counterclaim made by the claimant must also be filed with the Registrar, who is responsible for delivery to the other party. If a party requires an extension to submit its response or reply , an application for extension must be requested from the Executive Committee (EC) of the OAC.
Most institutions typically refrain from deciding on jurisdictional issues and leave it to the arbitral tribunal (AT) to decide. However, under the OAC Rules, the EC will not proceed with an arbitral proceeding if the OAC “manifestly lacks jurisdiction” over the dispute. The OAC Rules do not define what is meant by “manifestly lacks jurisdiction” nor does it provide a test to assist in its interpretation although it is worth noting that for jurisdictional pleas to the AT’s jurisdiction, the OAC Rules are silent on any standard.
Appointment by EC A key facet of the OAC Rules is that the EC does not need to appoint a sole or presiding arbitrator of a different nationality to the parties unless requested by either party before the deadline to nominate expires. Consistent with other rules in other jurisdictions, the OAC Rules stipulate that any appointment by the parties or co-arbitrators is considered a nomination and must be approved by the EC. Similarly, tribunal secretaries must be approved by the EC and can also be challenged by the parties. For the appointment of an arbitrator where expedited procedures apply, the parties are deemed to have waived the right to nominate and the EC must appoint a sole arbitrator.
Arbitrator Interviews Parties should be mindful that they are not allowed to have ex-parte communications with an arbitrator even when determining whether to nominate that arbitrator. This rule means that parties are prohibited from conducting arbitrator interviews.
Constitution of AT Distinct from rules in other jurisdictions, the constitution of the AT under the OAC Rules takes place by an act signed and dated by the AT within 28 days from when the Registrar transmits the file to the AT.
Failure to Nominate Respondents should be especially mindful of the fact that the deadline to nominate an arbitrator cannot be extended and it is imperative for a respondent to avail itself of its right to nominate within the prescribed timeframe. If the respondent fails to respond to the Request or nominate an arbitrator within 21 days of receiving the Request, then it is considered an irrevocable waiver of its right to nominate an arbitrator. Where there is no agreement as to the number of arbitrators or in the event of a three-member tribunal and the respondent fails to nominate its arbitrator, the EC may decide, where appropriate, to appoint a sole arbitrator for the dispute. It is worth flagging that the OAC Rules do not stipulate what occurs in the event a claimant fails to nominate.
Consolidation and Joinder Another key difference from rules in other jurisdictions is that in the event of joinder or consolidation before the AT has been constituted, the EC may decide to revoke the appointment of any arbitrator in favour of allowing any newly joined party to participate in the process. However, where the AT is constituted before the joinder or consolidation, it is deemed that any party who did not participate waived its right for such.
Multi-Party Further, it is worth noting that for multi-party disputes, the parties (either claimants or respondents) must jointly nominate the arbitrator (either sole or party-nominated). Where joint nomination fails, the EC shall appoint the arbitrator on behalf of the parties which failed and the presiding arbitrators.
Replacement Another difference lies with the replacement of arbitrators, where, except for in instances of a challenge, the EC may decide whether to follow the nomination process used when appointing the to-be-replaced arbitrator. Further, where the proceedings are closed, the EC will not follow the nomination process to replace an arbitrator.
Parties should be mindful that the AT must approve any change in representation by either party, and the AT may withhold approval where the change is likely to cause a loss of time.
Under the OAC Rules, parties are permitted to interview a witness for the purpose of preparing witness testimony, whether it be in writing or oral. Another interesting point is that the AT shall not administer an oath to witnesses unless it is required by law.
It is worth flagging that emergency arbitrators (EA) and arbitrators conducting EP shall provide summary reasons for his decision as opposed to a reasoned award under the non-expedited process. Whereas when determining the law applicable to the merits of the dispute, the AT’s decision must be reasoned. It is also worth noting that the EC must provide reasons for its decision on any challenge to an arbitrator. It is unclear from the OAC Rules what the different thresholds are for the reasoning to be provided. For extensions of time to issue an award, only the EC may extend time for an EA, which is due within three months from the AT’s constitution, whereas, for an AT, either the parties by agreement or the EC may extend the six-month deadline from then the terms of reference are last signed. For an award to be valid, all members of the tribunal must sign the award (or provide a written explanation as to why a signature is missing), and the sole or presiding arbitrator must sign all pages.
Finally, the OAC Rules provide that if certain fees are not paid within the deadline, then a withdrawal is deemed to occur. For example, where the challenge fee is not paid within ten days of the filing the challenge or the registration fee is not paid for a claim or counterclaim. In order to raise a counterclaim, the respondent is required to pay a registration fee equivalent to the amount the claimant must pay to register its claim. The Registrar will only transfer the file to the AT upon payment of the relevant fees and deposits, meaning that the AT will only be constituted after the full payment is received. A key distinction from other rules is that the OAC Rules do not allow for separate fee arrangements (whether direct or indirect) to be entered into between the AT and parties. The power to set the AT’s fees exclusively lies with the EC.
In conclusion, parties and arbitrators alike should be aware of the differences stated in this article between the OAC Rules and the rules of other jurisdictions or conducting arbitral proceedings in accordance with such. As a new set of rules, the OAC Rules have yet to be tested and it is therefore unclear how the EC and Registrar will assert authority when administering disputes. Furthermore, stakeholders should keep abreast of any amendments or resolutions published which may occur in the future to ease administrative burdens or clarify provisions of the Rules. Finally, this article aims to serve as an overview of the key differences from other arbitration rules and accordingly, has not captured all provisions of the OAC Rules.
For further information, please contact Ahmed Al Barwani or Chelsea Pollard.
Published in July 2022
