Debt Recovery in Oman

The finance ministry document showed that by the end of 2021, Oman is expected to reach its public debt of approximately 27.1 rials and international borrowing, making up 76% of the total public debt. Sultanate of Oman is the country in the middle east with the oldest independent state in the Arab world. With the difference in cultures, legal and practical issues usually the whole Debt collection process is very challenging. Because of these perceived cultural sensitivities, many companies working in the regions are wary of chasing their claims through formal dispute resolution methods. In Oman, the challenging part the debt collection is because of the local civil legal system.
However, many people nowadays feel like they have no option left other than to go for debt recovery methods. In the existing market situation, some of the debtors feel like they are not obliged to repay the debts and make attempts to avoid, comply or cut the payments over a significant period. In this article, we will examine debt recovery in Oman, examining the prelitigation process, debt collection procedures, and the court procedures in the local courts of Oman that could assist us in the recovery of debts.

Debt Collection Procedures

Like any other middle east country, Oman also has a debt recovery system through its banks. This system includes;
a) The creditor sets a date for the deduction corresponding to the monthly payday and specifies such payment schedules. The terms should be agreed upon by the debtor through any of the communication modes.
b) The creditor can deduct the monthly payment as an instalment from the debtor’s account. If this did not go along nicely, the creditor could extend the finance period without adding any additional cost or charge along with the instalment.
c) The bank is entitled to reschedule the debt if there are any voluntary changes in the debtor’s conditions. It has to be done within 30 days of the request of the debtor.
d) During the procedure, the bank must not deduct or block the installation of the debtor without the judicial order or ruling. The bank must also not add any additional charges or costs in the single pay cycle of the debtor without any of the judicial order or consent of the debtor.

Prelitigation Methods

The debt collection procedure is initiated through the banks in the first place. Hence if the debtors failed to pay the instalments through bank collection procedure to creditors, then they could go for a claim in the courts. But rather than going through these trials, systems, and other money-consuming processes, the prelitigation methods will help the creditors come up with an amicable resolution. Like Saudi Arabia, Oman also has a similar kind of prelitigation method.
The creditors are bound to use authenticated means of communication which are limited to Email, telephones, registered mail, message SMS, etc. The communication must include the creditor’s name, area of the defaulted payment: contact number, and working hours of the third party. Creditors could reach out to the debtor through phone calls, but it should exceed up to 10 times within 30 days. All such call recordings should be kept safe for not less than ten years. The creditors should not mislead the debtors with false consequences in case of nonpayment of debt. Registered mails and envelopes should not contain any of the matters related to the deficit.

Court Procedures in Oman

If the negotiation and the follow-up works could not develop an effective amicable resolution, the creditor could initiate his claim. Before 1970, the judicial system in the sultanate was limited to the Muscat Sharia Court. In the initial period, the Ministry of Justice was among the first four established early in Oman. But then the ministry started to develop the judicial system accommodating more judges, staff and building headquarters for every court in the different regions. For the need and welfare of the community, many committees and specialized authorities were formed. Let’s see the court procedures in the collection of debts.

Regular Court Proceedings

Primary courts are the very first courts before which the suits are raised. This court deals with a violation and the court sentence with the disciplinary and evaluative punishments corresponding to the civil and criminal litigation, arbitration requests, personal status claims, tax, rents, public, labour. The primary courts are divided into individual circuit prior court and the primary court, consisting of three judges. Separate circuit primary Court comprises one judge, and this court deals with the claims of no more than 70,000 RO, which is issues ruling the standard money division or personal status matters. The primary court is a specialized court in resolving the conflicts in claims of more than 70,000 RO. Bankruptcy, intellectual property, and insurance cases come under these courts and are beyond individual circuit primary court scope.

Initiating a Claim in Debt Recovery Cases in Regular Courts

In cases with disputes corresponding to civil, commercial, personal status, or labour, the plaintiff may resort to the arbitration committee or directly to the court. The procedures in the regular courts in debt recovery at the initial instances are as follows,

Step 1. It begins with the statement of claim filed at the regular court. The claimants grant power of attorney in favour of their counsel. It must be signed before the Ministry of Justice notary. The claim statement must contain the exact location and details of the defendant.

Step 2. The court serves the claim statement on the defendant and sets out a date for the first hearing. It’s widespread for the defendant’s lawyers to attend the first hearing and to request for adjournment. The court will grant this if the defendant hasn’t provided a power of attorney to its lawyer.

Step 3. The defendant files the defence, and it should contain any of the procedural defences. For example, the defendant could allege that the claim is time-barred, or the courts have no proper jurisdiction due to an arbitration clause. The defendant must raise such procedural arguments during the first submission lodged in the court.

Step 4. The court will order the claimant (the debtor) to file a written reply in response to the defence or submission of the defendant.

Step 5. After the submission, the court will consider whether the court has to appoint an expert who is usually working in a private sector and will receive a mission letter to assess the case. This expert will typically hold meetings with the claimant and the defendant separately and bring their lawyers to such meetings. The role of the lawyers is to explain the position of the clients with proper evidence of documents.

Step 6. Finally, the expert will file the report in court, and the claimant and defendant are receiving the copies.

Step 7. The court usually allows the litigant party to file submission on behalf of the report filed by the expert. The court seeing all those submissions will order the experts to provide an additional report which must include all the concerns raised in the first report. If the parties are unhappy with the expert, then the court will appoint another expert. But generally, the court will go for the order after the first expert has submitted the two reports.

Appeal Process

Once a primary court orally pronounced the judgment at the hearing, each party will get 30 days within which they have to file the Appeal. During those 30 days, the lawyer of the litigants can pursue the court file to view the primary court judgment draft, and written primary court judgment will be available after that. The Appeal filed in any of the Appeal Court contains all the defects included in the analysis of the primary court and the expert’s reasoning. Here the Appeal Courts have the right to appoint more than one additional expert to investigate the issues in the dispute. Once the Appeal Court pronounces the judgment in hearing, each litigant will get 40 days within which they could file an appeal in Oman’s final and third tier of justice: The Supreme Court.
It is very rare to have issues in the Supreme Court as the Supreme Court will look only to the matters related to the laws rather than the evidential issues. Once the judgment is ready, the court calls both parties for the hearing of the decision. The judgment of the Supreme Court cannot be appealed further. But at times, the Supreme Court refers the cases back to the Appeal Court for further inspection if there needs the same. Hence in such scenarios, a case could have been subjected to two Supreme Court judgment only if the court has referred the case back to the Appeal Courts.

New Summary Trial Process Introduced in Oman

His Majesty Sultan Haitham bin Tarik issued a Royal Decree 125/2020 on 12 November 2020 to simply the litigation process in Oman in specific kinds of disputes. This new rule helps avoid all the prolonged and expensive court processes for cases that are more frequently referred to the courts. For the Administrative Affairs of the judiciary, the council of chairman issued other accompanying regulations in due course. It will assist in the application and the interpretation of the new laws. Let’s see the changes introduced to the procedures of specific Omani litigation with the Royal Decree 125/2020 and how it practically works.
The new decree is restricted to certain types of disputes. Still, the mentioned area covers the many familiar sources of conflicts. The core dispute areas under the new law include commercial disputes involving the investment project subjected to Oman’s FCIL, tenancy disputes, individual employment disputes, construction, disputes arising out of debt, and penal cases related to cheques. After introducing the Royal Decree 125/2020, it established fast track preliminary hearing for these core dispute areas. The courts were struggling to cope with the large number of cases that commenced following the Covid-19 pandemic.
A new 30-day timeline is introduced in legislation. It states that the judgments have to be delivered from the date of submission of the case. If the circumstances of the case require more time, then a further 30-day timeline is given. There is an exception to the 60-day deadline for judgments for commercial disputes related to the FCIL and the construction cases. The judgment time frame for these cases can be extended up to 4 months from the referral.
The changes in the regular court procedures with the introduction of the Royal Decree brought some changes in the appeal process. The starkest difference is that the decision made by the Appeal Court will be final, and no further appeal is allowed in the Supreme Court. The timeline to file for Appeal is changed from 30 days to 15 days. It means the party has to file for Appeal within 15 days of the judgment. But in the case of commercial disputes corresponding to the construction cases and FCIL, this is not applicable but will benefit from extending up to 4 months.


To enforce the judgments, orders, and decisions made by both regular and Appeal circuits of the summary processes, under Article 15 to 18 established an enforcement division in each of the primary courts. All the final decisions will be made by the enforcement division regarding the judgment, orders, and decisions issued under Royal Decree 125/2020. No enforcement issues will be suspended unless there is a suspension order from the enforcement judge. For the Appeal, the timeline is strict and is up to 15 days.

Custodial Sentences for Debt Cases

One of the significant changes invented by the new decree is about the custodial sentences given against debtors who fail to abide by a final judgment for the payment of a sum of money. But Article 17 provides that the enforcement judge will issue no arrest order against the debtor under Article 418 of the CPL unless the debtor is notified physically. It was evident that the debtor willingly refrained from the payment even though he was able to pay. Hence the insolvent persons facing financial difficulties will be exempted from imprisonment only if the person demonstrates the incapacity to satisfy the debts subject to the judgment which comes under enforcement. Thus, Article 17 of the new law directly conflicts with Article 418 of the CPL as the law entrusts the enforcement judges with the power to issue the custodial sentences.

Debt Recovery Cases

Article 9 of the new rule provides that any person with a debt created through the instrument, which includes any signed agreements by the parties or the Notary executed deeds, could obtain an enforcement seal directly on the tool creating debt. The potential law has the strength to avoid litigation altogether. In the labour cases on the requests, the enforcement departments summarize the debt about the instrument and then recover a debt. The law didn’t mention the types of instruments that fall under the ambit of ‘instruments creating debt,’ which may cause some difficulties. Besides, it’s still unclear whether the law allows parties to avoid litigation altogether and turn to enforcement immediately.