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Oman Legal And Court System, Middle East College, Oman


Executive summary: This report sheds light on Omani legal and court system and various applications of the Omani legislations upon different sections of the business. This report discusses various objectives of Oman court system along with its implication on the business environment.An interview has been conducted to evaluate the purpose of investment and its rules, regulations and incentives which is required for the development of Oman.

Introduction: The Sultanate of Oman belongs to the central Islamic Monarchy in the Arabic Gulf. The capital of the Arabic gulf is Muscat. The Sultanate has gained its independence in July in the year of 1970, and it was governed by Sultan (the king) Qaboos since then. This report highlights about Oman legal and court system and its objectives that lie with different benefits in different areas of Oman. Implications of Oman court system on orderly business has also been discussed in this report with different methods of discharging contracts and remedies for breaching of the contracts.

Question 1: Analysis of Oman legal and court system and it's objective regarding royal decree and its implications on the orderly business environment

Answer: The Oman legal system is based on Shari ‘(Islamic) Courts. In addition to that, it also had the jurisdiction to personal status matters. The legal order of that had been passed by Sultanate of Oman, has been documented in a large manner in Constitution that had been issued by Royal Decree No. 101/96 on November 6, in the year of 1996. As per the views of Al-Jebouriet al. (2017, p.125), legislation in Sultanate of Oman has two different variants in it. One is the primary legislation and second is the secondary legislation. The primary legislation that has been promulgated by the Sultan is known as Royal Decree. The secondary legislation has been issued under the decision of the Ministers according to specific powers that have been delegated by the Royal Decrees. This has been delegated to concerned ministerial bodies and executives. As stated by Shaat and Al-Habsi (2016, p.141) the legal system that has been practising in Oman is a mixture of two laws namely Islamic law and Anglo-Saxon Law.

The religion of this state Oman is Islamic and the Islamic Shari ‘athe main basis of Oman legislation according to article 2 of the constitution. Jurisdiction, which has been made upon the decision of disputes in the subjects related to commerce had been associated along with authority previously which known as ‘The Authority for the Settlement of Commercial Disputes (ASCD)'. Changes have been brought by the Royal Decree No. 13/97 in the title, structures and powers of this authority. As opined by Stockreiter (2016, p.415), this can be mentioned now by the courts of Commerce. These Commercial Courts consist of design of triple layer with the Supreme Court which is based in Muscat, and six Courts of Appeal belongs to Muscat as well as Sohar, Nizwa, Salalah,Ibra and Ibri. Along with these places,about 45 Courts of First Instance have been circulated on different districts which belong to Sultanate.

Along with the promulgation of the Royal Decree No. 90/99, the formation of the Supreme Court and Judicial Authority which is functioning Cassatory and Appellate jurisdiction on the courts in the country and this promulgation forced into action. Based on the views of Tiede (2018, p.25), a crucial innovation that has been introduced by Oman Jurisdiction was the definition of different courts along with the jurisdiction in for trying and settlingdown the claims which are valued up to R.O. 15,000 only. Claims which are exceeded the value R.O. 15,000, tends to be eliminated by the chambers of First Instance or primary courts. All governmental bodies, authorities, departments along with general institutions fall within the realm of Courts' Jurisdiction according to Royal Decree 13/97.

As Islamic Sharia laws are the source of all of these legislations, these laws are constantly amended to provide an up-to-date and flexible legal framework to do business within Oman. Any disputes that have been made in a business context are adjudicated by the commercial courts.


Question 2: Interview regarding investment rules, regulations and incentives in Oman

Answer: In the current situation regarding the World Bank Business report, Oman has performed relatively well in paying taxes. However, the part of dealing with contract enforcement and protecting the investors has not been well maintained.
(Refer to appendix)

To capture a proper insight about the ways to improve investment rules and regulations, an interview has been executed with the Procurement Director of Oman Chambers of Commerce Industry.

Interview Questionnaire and Responses



Is Oman performing well in the sector of dealing with investments and investors?

I think Oman is not performing up to the mark in the sector of attracting business investment. However, it has been improved regarding taxpaying. I think it needs to modify the legal system for attracting more investments.

Do you think that the current law and legislation are perfect for attracting investments for the country?

Currently, the Ministry of Commerce and industry has been in the final stage of drafting the new law for attracting foreign capital investment. As far as I know, it has been mainly based on international standards and is concerned about the protection of human rights for investors. I guess this can help in this regard.

Do you feel any restrictions in the sphere of attracting foreign investments?

To some extent, this is right. Rules under the Commercial Company Law (Royal Decree No 04/1974) is applicable in case of any business investment from the part of any non-GCC nationals. It also requires at least OMR 15000. I think this is creating a gap.

What can be the possible ways to mitigate the issues and improve the investment sector in Oman according to you?

I guess the removal of minimum capital requirement can help along with creating a safeguarding policy in different areas of investment. I guess Tax exemption and incentives can be removed.

Do you feel any modification is required in the sphere of improving the legislation system regarding investment?

Modifications such as removal of restrictive provisions along with providing greater clarity to the investors can hugely attract foreign investments in Oman.

Table 1: Interview

Question 3a: Requirements for discharging contracts and its types

Answer: The requirement of discharging contracts

There are six ways through which contracts can be discharged. These ways are discussed below:

Discharge by Performance

This type of discharge happens when the contract is performed by both the parties and end happily. As stated by Magliveras (2017, p.35), in this contract if one party performs his promise, he alone will be discharged from the contract, and this party will then achieve a right against the other party who is guilty of a breach. In the judgment of the Supreme court numbered as 160/2008, the court held that a party is allowed to bring a claim against a non-contracting party.

Discharge by Agreement

A contract may discharge by another agreement between the same parties as well. Below are some common methods of discharge by agreement.

Novation refers to the situation when a new contract substitutes an existing contract. Alteration occurs when one or more material of the contracts have been changed. Rescission refers to the time frame when a contract is discharged before the date of performance. Remission refers to the situation when the promise or promisor accept less amount of sum than the amount which has been contracted. As opined by ALawaid and Muthaliff, (2019, p.75), this happens when less amount of fulfilment has been made for the promise.

Discharge by Frustration

This type of discharge happens when the contract needs to perform something impossible. This type of situation includes failure of the ultimate goal of the contract, destruction of the purpose of the contract, personal incapacity or death of the promisor and change of law.

Discharge by Lapse of Time

When a contract is not performed at the fixed time, the contract may come to an end, and the party need not perform an obligation and can sue the other party for damages.

Discharge by breach of contract

There are two ways through which the breach can be occurring. Anticipatory breach takes place when the performance of the contract has arrived before the time which is fixed. An actual breach occurs when a party fails to perform the obligations that need to be done by the party upon the fixed date for performance of the contract. This breach comes under Omani Civil Code which has been promulgated by Royal Decree 29/2013. Under Article 176 of the Civil Code, it can be seen that a party should be liable for any harm to another party that can be happened by breach of contract.

Discharge by Operation of Law

This can happen when a contract is personal. In this case, the death of promisor will discharge the contract. As mentioned by Abdallah (2015, p.520), in another contact the rights and liabilities of the deceased person have been passed to the legal representatives of the dead person.


Question 3b: Remedies for breaching contracts in courts of Oman

Answer: Remedies for breaching of contracts in Oman courts

Several case studies can be seen regarding the breach of contracts. Roger Lewis, who is an employee of a pharmaceutical firm, he has been instructed to spend three days at a resort near the see which is placed in the south west of England. He decided to check into a guest house that is owned by Mr Neil Nickson. At the time of check-in, he has been asked to sign a form which contains a disclaimer that reads the owners of this guest house will not be liable for any damage of the party includes personal in just, loss of guest's property during the stay time in this guest house. As per the views of Shiyab (2019, p.125), the Omani court has distinct some principles and doctrines regarding the breach of contracts in terms of awarding damages. Some of the most important remedies are:

In regards to the value of compensation, the court has been made a judgment for awarding the affected matters, or the parties can mention an amount for the damages that have been made. This can be given in the form of different clauses such as compensatory and penalty.

Compensation that has been awarded will only be based on the actual loss that the party has been suffered. Financial, lost is the foremost element of the award that has to be bared for damages for the breach of contractual obligations. The Royal Decree No. 29/2013 which has been promulgated by Omani Civil Code, states that Personal rights and Obligations are now enshrinedthe above-mentioned principles of the courts.

Question 4: Contract of employment and its content

Answer: A contract of employment is an agreement that can be made between an employer and an employee. As opined by Pauceanu (2016, p.395), it is the main basis of the employment relationship. It can be seen that most contracts of employment do not require any writing that is legally valid. However, it is better if both parties have legal documents. A contract starts at the time of acceptance of the employment offer. Contract employment should carry the details of terms and conditions within a legal document which have been made by the employer company. Based on the views of Baporikar (2016, p.400), these legal documents should be carried out within two calendar months after starting the job. This will include detail of different sections of the company such as pay slip for every month, holiday details, working hour's details and details of legal actions as well. Legal agreements will contain such things where the person will be considered as a criminal if the person will violate any rule related to the employment with the company and rules for the occurrence of any breach of contracts.

An employer can dismiss an employee when something has happened that cannot be considered for the amount of misconduct that has been caused by the employee. As per the views of Elghuweelet al. (2017, p.220), gross misconduct is referred to an incident which is so serious, due to which the employee will not continue work with the company. The situation that can cause gross misconduct includes theft of monetary amount from the office or any kind of office property. Chaudhry et al. (2017, p.250) mentioned that any fraud with the information related to the important document of the office or any other scenario as well as any kind of violence within office premises with other employees.

To mitigate the problems regarding these kind activities, the Oman Labor Law was introduced by the Oman government in 2012. This law has been forced into action mainly for private employees. As per the views of Albadi (2017, p.25), this labour law has been considered as a strong law which will provide a balanced relationship between private employees and their employers. Alani et al. (2018, 690) opined that the sections that come under this law are the protection of all rights of the employees along with employees' code of conduct. The Oman Labor Law which has been stipulated by Royal Decree 35/2003 is responsible for dealing with the dismissal of the employees without compensation and notice.


Question 5: Concept of copyright law and protection of intellectual property

ANswer: Concept of laws related to copyrights and protection of intellectual property laws has been promoted by Royal Decree No. 65/2008. The laws related to copyrights are responsible for protecting original literacy along with artistic and scientific works upon their creation from the source. These laws of copyright will be applied automatically, and there is no need for undertaking any formalities irrespective of the kind of the product, the value of the product, method of expression or the purpose for which the work has been created. As per the views of El-Gohary, Selim and Eid (2016, p.60), Article 2 of the Omani copyright law delivers a wide definition of the sections that will fall within the scope of intellectual property protection and copyright protection (Vincent and Vasumathi, 2018, p.43). This article also provides a non-exhaustive and illustrative list of elements which externally includes within the matter of protection which includes all kinds of literary works and artworks. As per Article 2, the ‘title' of any work can be counted as intellectual property of any work (Mishra et al. 2018, p.10).

Conclusion: It can be concluded from the above sections that it is very much important to know the information related to Oman legal and court system and its objectives to maintain the laws which are required in different sections of the business. Implications of these Omani laws and regulations on the business environment have also been discussed in this report. Invest in Oman countries, and its importance can be evaluated by an interview which consists of five questions. These questions have been asked to Procurement Director of Oman Chambers of Commerce Industry. A brief analysis of his answers regarding investment rules, regulations and incentives have been discussed as well. Requirements of discharging contracts and breach of contracts have also been discussed through a case study and types of discharging of contracts have also been discussed. Contract of employment and laws of copy write regarding the protection of intellectual property has also been given in the above sections.


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