The civil transactions law

The central significance of the new Civil Transactions Law is its codification of a substantial proportion of Omani jurisprudence developed over several decades in the country’s courts, with the laudable objective of providing clarity as to what those principles are and how they apply.

The Civil Transactions Law, enacted pursuant to Royal Decree 29 of 2013, came into force in Oman on August 6, 2013. It is concerned with the rights and obligations of natural and juridical persons in four broad areas: personal rights and obligations; contractual rights and obligations; rights ‘in rem’ (real estate); and personal guarantees and insurances in kind. It is an impressive enactment, spanning 1,086 Articles.

Oman now has the Civil Code which, unlike all other GCC member states, it previously lacked. With the new law, Oman now more closely reflects the regional civil law paradigm, already having in place a constitution (the Basic Law RD 101/1996, as amended), the Commercial Law (RD 55/90, as amended) (serving as the country’s Commercial Code) and the Penal Code (RD 7/74, as amended). This is a Civil Code for Oman to call its very own; there is no further need, as there was in the past, to cross – refer, on an as needed, ad hoc basis, to the established and developing principles found in the jurisprudence of other parallel jurisdictions, such as Egypt, Jordan, Tunisia and Sudan, for example.

The central significance of the new law (apart from its prodigious length) does not stem from any introduction of new laws and concepts. Rather, this lies in the new law’s codification of a substantial proportion of Omani jurisprudence developed over several decades in the country’s courts, with the laudable objective of providing clarity as to what those principles are and how they apply. It is not intended that the new law should have retrospective effect: where existing law has been enacted already, this is largely left undisturbed. At the same time, due deference is naturally afforded to the principles of Islamic shari’ah and room is left for the continuing development of both public policy and local custom.

There has been some concern that the new law’s prescriptive measures may impact on, or somehow restrict, the freedom of contract in commercial transactions for which Oman had previously been well known. But this is unfounded. In the past, contracting parties could agree terms that would stand as written in the absence of Omani statute law to the contrary. But those terms, where written law was silent, would still have to stand up, in any court proceedings, to the application of local custom, the principles of Islamic shari’ah and, in the last resort, to locally applied principles of equity and fairness in order to be enforceable.

With the codification introduced by the new law, contracting parties will now in fact find it easier than before to anticipate how local law will affect their commercial objectives rather than having to wait for any dispute to arise and come before the courts to establish whether their interests are in fact properly protected and those commercial objectives as efficacious as they expected.

The new law should be welcomed for the forensic clarification it brings. It is immaterial that Oman has come to match the regional civil law paradigm by a means more familiar in common law jurisdictions – the enactment of legislation derived from historic case law, established business custom and developing public policy. Its arrival is also most timely, given the rapid emergence of Oman in recent years as one of the most attractive states within the GCC in which to do business from a regulatory perspective.


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