Investment Treaty Arbitration

Investment Treaty Arbitration: Oman

Overview of investment treaty programme

1. What are the key features of the investment treaties to which this country is a party?

Oman

BIT Contracting Party or MIT

Substantive protections

Procedural rights

Fair and equitable treatment (FET)

Expropriation

Protection
and security

Most-favoured-nation (MFN)

Umbrella clause

Cooling-off period

Local courts

Arbitration

Algeria (22 June 2002)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Austria (1 February 2003)

Yes

Yes

Yes

Yes

Yes

60 days

Yes

Yes

Belgium-Luxembourg Economic Area (not in force)

Yes

Yes

Yes

Yes

Yes

3 months

Yes

Yes

Brunei (not in force)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

China (1 August1995)

Yes

Yes

No

Yes

No

6 months

Yes

Yes

Croatia (not in force)

Yes

Yes

No

Yes

No

6 months

Yes

Yes

Egypt (3 March 2000)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Finland (20 February 1999)

Yes

Yes

No

Yes

No

6 months

No

Yes

France (4 July 1996)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Germany (4 April 2010)

Yes

Yes

Yes

Yes

Yes

3 months

Yes

Yes

India (13 October 2000)

Yes

Yes

No

Yes

No

6 months

Yes

Yes

Italy (23 January 1997)

Yes

Yes

No

Yes

No

6 months

Yes

Yes

Japan (not in force)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

South Korea (10 February 2004)

Yes

Yes

Yes

Yes

No

6 months

Yes

Yes

Morocco (30 March 2003)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

Netherlands (not in force)

Yes

Yes

Yes

Yes

No

A reasonable lapse of time

No

Yes

Sudan (28 May 2002)

No

Yes

Yes

Yes

Yes

6 months

No

Yes

Sweden (6 June 1996)

Yes

Yes

No

Yes

Yes

6 months

No

Yes

Switzerland (18 January 2005)

Yes

Yes

Yes

Yes

Yes

6 months

No

Yes

United Kingdom (21 May 1996)

Yes

Yes

Yes

Yes

Yes

3 months

No

Yes

Pakistan (14 May 1998)

Yes

Yes

Yes

Yes

No

6 months

No

Yes

Belarus (18 January 2005)

-

-

-

-

-

-

-

-

Bulgaria (not in force)

-

-

-

-

-

-

-

-

Iran (8 April 2003)

-

-

-

-

-

-

-

-

Jordan (not in force)

-

-

-

-

-

-

-

-

Lebanon (20 October 2008)

-

-

-

-

-

-

-

-

Singapore (12 October 2008)

-

-

-

-

-

-

-

-

Syria (not in force)

-

-

-

-

-

-

-

-

Tanzania (not in force)

-

-

-

-

-

-

-

-

Tunisia (1 March 1992)

-

-

-

-

-

-

-

-

Turkey (15 March 2010)

No

Yes

Yes

Yes

No

6 months

Yes

Yes

Ukraine (not in force)

-

-

-

-

-

-

-

-

Uzbekistan (20 August 2009)

-

-

-

-

-

-

-

-

Vietnam (not in force)

-

-

-

-

-

-

-

-

Yemen (1 April 2000)

-

-

-

-

-

-

-

-

FTAs

Substantive protections

Procedural rights

Fair and equitable treatment (FET)

Expropriation

Protection and Security

Most-favoured-nation (MFN)

Umbrella clause

Cooling-off period

Local courts

Arbitration

GCC-Peru Framework Agreement (not in force)

-

-

-

-

-

-

-

-

GCC-US Framework Agreement (not in force)

-

-

-

-

-

-

-

-

GCC-New Zealand Free Trade Agreement (not in force)

-

-

-

-

-

-

-

-

GCC-EFTA (European Free Trade Association) Free Trade Agreement (not in force)

No

No

No

Yes

No

Yes (period of mandatory consultation)

No

Yes

GCC-Singapore Free Trade Agreement (1 September 2013) (not available)

-

-

-

-

-

-

-

-

Oman-US Free Trade Agreement (1 January 2009)

Yes

Yes

Yes

Yes

Yes

6 months

Yes

Yes

GCC-India Framework Agreement (not in force)

No

No

No

No

No

No

No

No

GCC-Lebanon Free Trade Agreement (not in force)

-

-

-

-

-

-

-

-

EC-GCC Cooperation Agreement (1 January 1990)

No

No

Yes

Yes

No

No

No

No

GCC Economic Agreement (1 December 1981)

No

No

No

No

No

No

No

No

Agreement on the Promotion, Protection and Guarantee of Investments among Member States of the Organisation of Islamic Conference (OIC Investment Agreement) (23 September 1986)

No

Yes

Yes

Yes

No

-

Yes

Yes

Unified Agreement of the Investment of Arab Capital in the Arab States (7 September 1981)

No

Yes

Yes

Yes

No

No

Yes

Yes

Arab League Investment Agreement (29 August 1970)

Yes

Yes

No

Yes

No

No

No

No

Arab Economic Unity Agreement (30 May 1964)

-

-

-

-

-

-

-

-

Qualifying criteria - any unique or distinguishing features?

2. What are the distinguishing features of the definition of “investor” in this country’s investment treaties?

Oman

Issue

Distinguishing features in relation to the definition of ‘investor’

Citizenship / nationality for individual investors

For the majority of Omani BITs, a natural person qualifies as an investor when the individual has the nationality or citizenship of a contracting state, and makes an investment in accordance with the contracting state’s laws.

The Algeria BIT further requires individuals to have their main place of business in the contracting state.

Seat of investor / place of business

While all Omani treaties provide that a legal person incorporated or duly organised according to the laws of a contracting state qualifies as an investor, a large majority of them also require that such entities have their ‘seat’ within the territory of a contracting state.

The Algeria BIT and, to a greater extent, the Croatia BIT includes language to the effect that legal persons investing in the territory of the other contracting state must ‘perform real business’.

Wide definition of juridical persons

While most Oman BITs refer to legal persons, companies or enterprises only, some of them contain a more detailed list of juridical persons that qualify for protection (eg, China, India, UK and Korea). In this respect, the Korea BIT includes public institutions, authorities, foundations, partnerships, firms, establishments, organizations, corporations or associations.

Limited and unlimited liability of investors

The China and Germany BITs specify that treaty protection attaches irrespective of whether or not the liability of the legal person in question is limited. The Germany BIT further indicates that liability is to be understood as the liability of the investing company’s partners, associates or members.

Control by national of a contracting state

Some treaties extend protection to legal persons controlled directly or indirectly by nationals or companies of the other Contracting Party (eg, France, the Netherlands, China and Switzerland).

The Italy, Finland, China and Sweden BITs contain slightly different language that applies to any legal person established outside the territory of the Contracting Party in which this party or one of its nationals (natural or juridical person) has a ‘predominant interest’.

The Japan BIT goes one step further and defines as (i) ‘owned’ enterprises those where more than 50% of the equity interest is owned by the investor and as (ii) ‘controlled’ enterprises those where the investor has the power to name a majority of its directors or otherwise legally direct its actions.

Non-profit investors

The Japan and Germany BITs are the only treaties which include in the definition of juridical persons not-profit enterprises. In particular, the Japan treaty provides a vast definition for investors and includes enterprises ‘whether or not for profit, and whether private or government owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association, organisation or company’.

Juridical persons with no legal personality

The Germany BIT extends protection to juridical persons, and to any commercial or other company or association without legal personality provided it has its legal seat in Germany and is duly registered. The same prerogative seems to apply to Omani legal persons as well, although the language used is more succinct.

3. What are the distinguishing features of the definition of "investment" in this country’s investment treaties?

Oman

Issue

Distinguishing features in relation to the concept of ‘investment’

Eligible assets

Most Oman BITs define ‘investment’ to include ‘every kind of asset invested’ by a national. Some treaties expressly include assets reinvested (eg France and Pakistan) and most BITs provide non-exclusive lists of assets (typically including (i) movable and immovable property; (ii) shares and stocks; (iii) claims to money or performance; (iv) intellectual property rights; (v) concessions and rights conferred by right to explore, exploit, and develop natural or more specific resources).

While the Croatia, India and Finland BITs include assets established or ‘acquired’ by foreign investors, the France and Japan BITs extend its scope to include returns (with the France BIT expressly including returns on reinvestments).

The Belgium BIT provides a wide-ranging definition and it includes in what is to be considered an investment direct or indirect contributions in cash, in kind or in services, invested or reinvested in any sector of the economy. The Japan BIT includes an even more expansive definition of investment as in addition to including commitment of capital or other resources, it extends to ‘expectation of gain’ or profit and to the ‘assumption of risk’.

The Italy BIT extends protection to investments made by the government of the other contracting state, in addition to more traditional investments made by private natural or juridical persons.

Indirect control of assets

Four Oman BITs expressly include in the definition of ‘investment’ assets controlled indirectly by a protected investor (Austria, Belgium, Japan and the Netherlands BITs).

Commencement of treaty protection

The majority of Oman BITs also protect investments made prior to the entry into force of the treaty in question (eg, Austria, Belgium, Brunei, China, Croatia, Finland, Germany, India, Italy, Japan, Korea, the Netherlands, Sweden, Switzerland and the UK).

Some treaties provide that even if they apply to investments made before their entry into force, they do not cover claims or disputes that arose prior to that date (eg, Austria, Belgium, Croatia, Finland, Japan, Korea and Sweden). The Germany and India BITs do not contain any provision governing the timing of disputes.

Some other BITs do not contain any reference whatsoever to the commencement dates of treaty protection (Algeria, France, Netherlands, Switzerland and Pakistan).

Admission/approval of an investment

Most Oman BITs require that investments conform to local law.

Change in form

Most Oman BITs clarify that changes in the form of an investment do not alter its protected status: see eg Article 1 in fine of the Finland BIT: ‘A change in the form in which assets are invested does not affect their character as investment’.

Similar provisions are contained in most Oman BITs, including Algeria, Austria, Belgium, Croatia, France, India, Japan, Korea. While these BITs expressly specify that the change in form has no impact on the status of the investment provided that the change is made in accordance with the laws of the contracting state where the investment was made, other treaties do not contain any such legality requirement. These are the BITs with Brunei, Finland, Germany, Sweden, Switzerland and the UK. Finally, the Netherlands BIT does not make any mention of a change in the form of the investment and it arguably does not allow for any.

Substantive protections - any unique or distinguishing features?

4. What are the distinguishing features of the fair and equitable treatment standard in this country’s investment treaties?

Oman

Issue

Distinguishing features of the fair and equitable treatment standard

Formulation of FET standard

Most publicly available Oman BITs contain a substantive protection according ‘fair and equitable’ treatment to foreign investors. While some treaties contain examples of conduct that may amount to a breach of the FET standard, none of the treaties list exclusively all the circumstances that will amount to a FET breach. The Brunei treaty is the only one that does not expressly afford fair and equitable treatment as such, but it affords protection against arbitrary and discriminatory measures nonetheless.

Supplementary protection against unreasonable and discriminatory measures

The majority of Omani treaties contain a supplementary prohibition against discriminatory and arbitrary/unreasonable measures impairing the investor's use or operation of its investment. Such provisions are included in the Austria, Brunei, China, Finland, Italy, Japan, Korea, the Netherlands, Sweden, Switzerland, UK treaties.

Some BITs expressly prohibit unreasonable or discriminatory measures for a certain number of actions, albeit non-exhaustively enumerated, including the purchase of materials, means of production, operation, transport and marketing of products. These include Croatia and France treaties. The Sweden BIT contains a particularly descriptive ‘Promotion and Protection of Investments’ clause, which includes provision of fair and equitable treatment and protection against restrictions of purchase of ‘raw materials, components and units, auxiliary materials, energy and fuel as well as means od production and operation of all kinds’.

Inclusion of returns

The Austria, Belgium, China, Croatia, India and Switzerland treaties extend their scope to apply FET protection to returns on investments.

Customary international law

Only three treaties (Croatia, France and Japan) expressly require the contracting states to ensure fair and equitable treatment in accordance with the principles of international law, whereas in all the other treaties the standard is not qualified.

5. What are the distinguishing features of the protection against expropriation standard in this country’s investment treaties?

Oman

Issue

Distinguishing features of the ‘expropriation’ standard

Scope of expropriation standard

All treaties provide protection against expropriation that is not carried out 'for a public purpose' or in the 'public interest', under due process, on a non-discriminatory basis, and without prompt and adequate compensation.

Indirect expropriation

The Brunei and France BIT expressly protect against ‘indirect’ expropriation, while in others it is established that investments shall not be subject to measures having effect equivalent to expropriation (Algeria, Austria, Belgium, China, Croatia, Germany, Italy and India).

Right to review valuation

Some treaties contain, within their expropriation protection, a right to review, or generally ‘prompt review’, of the valuation of the investor’s investment, and of the payment of compensation, in the event of an expropriation. Such provisions are included for example in the Japan, Korea and UK BITs.

War or national emergency

The Sweden and Switzerland BITs in addition to affording MFN protection in relation to events relating to war or armed conflict, it expressly provides, as part of its expropriation protection, for payment for losses due to war or other armed conflict, riot or national emergency.

6. What are the distinguishing features of the national treatment/most-favoured-nation treatment standard in this country’s investment treaties?

Oman

Issue

Distinguishing features of the ‘national treatment’ and/or ‘most favoured nation’ standard

Scope of MFN treatment

All Omani BITs include a broad MFN and provision referring to investments and returns of investors. More than half also include national treatment protection. Some treaties extend protection to activities connected with investments (eg, France, Pakistan, Brunei, China, Croatia, Finland and Switzerland treaties). While some treaties are more descriptive and consider MFN treatment as applicable to the ‘management, operation, maintenance, use, enjoyment, sale and liquidation of an investment’ (Austria), others simply extend protection to the ‘management of investments’ (Algeria).

While the France BIT is the only treaty to indicate that the MFN obligation covers the work conditions that each contracting state shall grant to foreign investors and guarantees ‘facilités matérielles appropriées pour l’exercice de leurs activités professionnelles’ (free translation: ‘material assistance for the performance of the [investors’] work activities’), the India and Japan treaties protect entry and sojourn of personnel of the investor in the territory of the host state.

The Korea BIT has a more qualified MFN clause and in its protocol it specifies that the presence of the MFN provision in the treaty is not to be construed as limiting the authority of the host state to provide particular incentives and rights to its own investors.

The Japan treaty includes in the scope of its MFN provision access to the courts of justice and administrative tribunals and agencies in all degrees of jurisdiction.

Common exceptions to MFN treatment

Most Omani BITs provide that MFN treatment and/or national treatment to an investment do not extend to the benefits of membership of a customs union, monetary union or free trade area, nor to taxation agreements and/or domestic or international taxation legislation. In addition to these traditional exclusions, the Belgium treaty also excludes from the scope of its MFN ‘ownership of lands and real estate’ and ‘obtaining grants and soft loans’.

Armed conflict

The German BIT provides for MFN or national treatment in relation to ‘restitution, indemnification or compensation or other valuable consideration’ for losses resulting from war or other armed conflict, revolution, a state of national emergency or revolt.

Use of MFN to expand/limit procedural rights

The Japan BIT expressly excludes the reach of MFN coverage to provisions concerning the settlement of investment disputes. Arguably, in other Omani treaties that do not expressly prohibit it, MFN treatment can be expanded to procedural rights such as dispute resolution provisions from more favourable treaties.

7. What are the distinguishing features of the obligation to provide protection and security to qualifying investments in this country’s investment treaties?

Oman

Issue

Distinguishing features of the ‘protection and security’ standard

Scope

Thirteen treaties contain the obligation to provide protection and security usually phrased as 'full protection and security', although their formulation varies. Wording includes ''full and constant protection and security' (Austria); 'full and complete protection and security' (France and Switzerland); arguably 'full protection of this agreement' (Sweden); 'full and complete protection and safety' (Pakistan). The Brunei treaty contains the same full and security protection wording under Article 2.3 ('Encouragement and Protection of Investments') and under Article 4.1 ('Nationalization and expropriation'). The precise differences in standard created through the different formulations are open to debate.

No direct protection

While the Croatia BIT does not contain a 'protection and security' provision as such and it only indicates that contracting states shall 'admit, promote and protect' investments, the China, Finland, India, Italy treaties do not contain and protection and security guarantee at all.

8. What are the distinguishing features of the umbrella clauses contained within this country’s investment treaties?

Oman

Issue

Distinguishing features of any ‘umbrella clause’

Scope

Several Oman treaties contain a conventional umbrella clause – that is a clause in terms such as ‘Each Contracting Party shall observe any obligation it may have entered into with regard to investments by investors of the other Contracting Party’. These include the Austria, Germany, Switzerland and UK treaties.

While some treaties contain slightly different formulations, such as the Sweden BIT which refers to ‘full protection of this Agreement’, which could arguably be construed as an umbrella-type provision, others do not contain any umbrella clause at all. These are the Brunei, China, Croatia, Finland, India and Japan treaties.

Other umbrella clause-type provisions

Some treaties contain an umbrella umbrella-style clause relating to specific commitments. The France, Algeria and Belgium (‘more favourable provisions’), the Italy (‘specific agreements’) and the Korea (‘other specific provisions of contract’) treaties contain clauses relating to specific commitments with an investor which, if more favourable than the BIT, should take precedence over treaty provisions.

9. What are the other most important substantive rights provided to qualifying investors in this country?

Oman

Issue

Other substantive protections

Free transfer of payments

All of the Omani BITs in force contain a provision affording protection for the free transfer and repatriation of payments related to investments and returns. In some cases this right is subject to limited carve-outs.

Some treaties provide for the host state to guarantee to guarantee the most favoured nation treatment in regards to free transfer of payments. These include Brunei, China and Sweden.

Non-impairment

Most BITs include an obligation not to impair the management, maintenance, use, enjoyment or disposal of investments.

Armed conflict / civil unrest

All of the Omani BITs reviewed contain provisions that require the host state to compensate investors of the other contracting state in case of various disruptive events, such as war or armed conflict, revolt, a force majeure event, a state of emergency, a riot, etc. These include the Japan, Germany Austria; Belgium Brunei China, Croatia and Finland treaties.

Transparency of laws

Some treaties provide more or less explicitly that the host state must publish or in any event allow access to its laws, regulations, procedures as well as international agreements which may have an impact on the operation of the treaty (eg, Austria). The Japan treaty has a much more descriptive provision and also obliges each contracting state to make available names and addresses of any competent authority responsible for laws, regulations and administrative rulings. It also obliges each state to promptly respond to specific questions and provide any information needed, subject to confidential information being preserved and disclosure not harming privacy or legitimate commercial interest.

Applicability of other agreements or obligations

Many Omani treaties contain a provision to the effect that where laws or international law obligations outside the treaty entitle an investor to more favourable treatment than under the treaty, those more favourable rules will apply. Provisions to this effect are contained for example in the Austria, Belgium, India, the Netherlands and Sweden.

Subrogation

Most treaties contain a provision to the effect that the host State will recognise any rights of subrogation to an investor’s rights that may exist under insurance or indemnity.

Procedural rights in this country’s investment treaties

10. Are there any relevant issues related to procedural rights in this country’s investment treaties?

Oman

Issue

Procedural rights

Selection of dispute resolution fora

The vast majority of treaties provide investors with a choice between various dispute resolution options – typically local courts, ICSID arbitration, ICC arbitration and ad hoc arbitration under the UNCITRAL Rules. Some treaties provide for additional avenues of litigation. For example, the Belgium BIT provides for disputes to be submitted to the Arab Investment Tribunal in accordance with chapter six of the Unified Agreement for Investment of Arab Capital, to the GCC Commercial Arbitration Center, and to any other forum. The UK BIT on the other hand only provides for arbitration under the UNCITRAL Rules, which the parties can agree to modify.

The Sweden BIT indicates that in case of disagreement between the parties as to whether conciliation or arbitration is the more appropriate method to resolve the dispute, the investor has the right to chose.

Fork in the road

In many treaties where the investor has a choice between dispute resolution methods, the investor's choice is expressly binding and final. This is the case for example for the Algeria, Austria, China and Belgium treaties.

The Japan treaty contains a variant on a fork-in-the-road clause: investors can always seek administrative or judicial settlement before the local courts of the host state, but they can only bring the dispute to arbitration once they have withdrawn their claims with the local courts before any final decision is made.

Exhaustion of local remedies

The Austria BIT provides that the exhaustion of local ('administrative or judicial') remedies is not a condition precedent to the right of the investors to commence arbitration proceedings.

Applicable law

Omani treaties generally do not contain a specific indication as to what the applicable law/s should be. The Belgium, Japan, Austria and Netherlands BITs require the application of the domestic laws of the territory where the investment was made. Some of these treaties contain more descriptive indications and mandate the application of the 'law governing the authorization or agreement and rules of international law' (Austria) and more plainly 'rules of international law' (Japan). The Netherlands BIT indicates both that the tribunal must rule on the basis 'of respect of the law'. It is also the only treaty to specify that arbitrators can decide the dispute ex aequo et bono.

Cooling-off

All Oman treaties involve a cooling-off period. Most allow for parties to find an amicable solution within 6 months (Pakistan Swiss Sweden Korea Italy Japan India Croatia Finland France China Algeria and Brunei); three provide for a 3-month period (UK, Germany and Belgium) and one provides for a 2-month period (Austria). The Netherlands treaty does not mention any specific period of time but refers to 'reasonable lapse of time' within which the parties should try and attempt to seek amicable resolution.

Statute or limitations

The Japan treaty requires an investor to bring a claim no later than three years from the date the investor first acquired or should have acquired knowledge that she/he had 'incurred loss or damage'.

11. What is the status of this country’s investment treaties?

Oman

Oman has signed 38 BITs, out of which ten are not in force at the date of this publication. The BIT with Egypt has been terminated and the initial BIT with Germany has been replaced in 2010. For those treaties that are not yet in force, it is unknown whose decision it was not to ratify them. Also, not all signed treaties are publicly available. It is therefore not easy to draw conclusions on the attitude of Oman towards its investment treaty framework. Nevertheless, Oman appears to favour the investment treaty regime as it signed two new treaties with Germany and Turkey in 2010.

Generally, foreign investment is rising in Oman as international firms recognize the growing opportunities related to the Sultanate’s massive infrastructure investment program as well as increased efforts to diversify away from oil and gas, particularly with low world oil prices in late 2014 and early 2015. According to the U.S. Department of State, Oman is actively seeking foreign direct investment and is in the process of improving the regulatory framework to encourage such investments.

Further, Oman’s interest in increased foreign investment and technology transfer make expropriation or nationalization unlikely. In the event that a property must be expropriated, e.g., for public purposes, the investment treaty framework affords a high level of protection to foreign investors who can rely on comprehensive expropriation provisions, but domestic law is also useful. Article 11 of the Basic Law of the State stipulates that the Government of Oman must provide prompt market-value compensation. The investment treaty regime is further supported through Oman being a member state of the International Centre for Settlement of Investment Disputes (ICSID convention). Also, as signatories to the New York Convention, Omani courts recognize and enforce foreign arbitral awards.

Practicalities of commencing an investment treaty claim against this country

12. To which governmental entity should notice of a dispute against this country under an investment treaty be sent? Is there a particular person or office to whom a dispute notice against this country should be addressed?

Oman

Government entity to which claim notices are sent

Minister of Justice, Muscat, Sultanate of Oman

13. Which government department or departments manage investment treaty arbitrations on behalf of this country?

Oman

Government department which manages investment treaty arbitrations

Director General of Organizations and Commercial Relations, Ministry of Commerce and Industry, Muscat, Sultanate of Oman

Minister of Oil and Gas, Muscat, Sultanate of Oman

14. Are internal or external counsel used, or expected to be used, by the state in investment treaty arbitrations? If external counsel are used, does the state normally go through a formal public procurement process when hiring them?

Oman

Internal/External Counsel

In Oman's two publicly reported investment treaty arbitrations, the State was represented by external counsel.

Practicalities of enforcing an investment treaty claim against this country

15. Has the country signed and ratified the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States (1965)? Please identify any legislation implementing the Washington Convention.

Oman

Washington Convention implementing legislation

Oman has signed (5 May 1995), and ratified (24 July 1995) the Washington Convention, which is in force as of 23 August 1995.

16. Has the country signed and ratified the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958) (the New York Convention)? Please identify any legislation implementing the New York Convention.

Oman

New York Convention implementing legislation

Oman is a signatory to the New York Convention, which was ratified into Omani law on 25 February 1999 by virtue of Royal Decree 36/1998 without reservations.

17. Does the country have legislation governing non-ICSID investment arbitrations seated within its territory?

Oman

Legislation governing non-ICSID arbitrations

There is no express legislation relating to non-ICSID investment disputes seated in Oman. However some Omani treaties provide for UNCITRAL arbitration.

Oman has an arbitration law which governs civil and commercial disputes (Law of Arbitration in Civil and Commercial Disputes (Royal Decree 47/1997)). Oman is also a member of the GCC Arbitration Center, located in Bahrain. Separately, the Bahrain Center for Dispute Resolution, a member of the American Arbitration Association (AAA) in New York, is very active in the region.

18. Does the state have a history of voluntary compliance with adverse investment treaty awards; or have additional proceedings been necessary to enforce these against the state?

Oman

Compliance with adverse awards

No publicly available awards have been rendered against Oman under its investment treaties. In the only concluded arbitration against Oman to date, the tribunal rejected all claimants' requests for relief (Adel A Hamadi Al Tamimi v. Sultanate of Oman (ICSID Case No. ARB/11/33)). Two other claims against Oman are currently pending: (i) Attila Dogan Construction and Installation Co. v. The Sultanate of Oman under the Oman-Turkey BIT); and (ii) Samsung Engineering Co., Ltd. v. The Sultanate of Oman (ICSID Case No. ARB/15/30).

19. Describe the national government’s attitude towards investment treaty arbitration

Oman

Attitude of government towards investment treaty arbitration

The Government of Oman is open to and accepts the binding international arbitration clauses in its specific investment treaties, as demonstrated by the international arbitrations to which it has been a party. There has been no indication to date that that attitude has changed in recent years. However so far there have only been three investment treaty arbitrations brought against Oman. Given the State's limited experience in the field of treaty arbitration, it would be prudent to await additional developments before drawing conclusions as to Oman's overall attitude.

It must be noted, however, that language used in more recent treaties (eg Germany and Turkey) is not more restrictive than in previous treaties in particular as regards dispute settlement. This indicates that the country has remained committed to its investment treaty regime and protections, including dispute resolution mechanisms such as international arbitration, which is enshrined in all of Oman’s treaties.

It should also be noted that in addition to the treaties that are in force, Oman is a member of the Gulf Cooperation Council. The Council will negotiate any future trade agreements as a group, rather than as individual nations. In 2013, the Free Trade Agreement between the GCC and Singapore entered into force. Currently the GCC is in the process of finalizing a Free Trade Agreement with the European Union and another one with Malaysia. Oman also has a Free Trade Agreement with the United States, which was signed in 2006 and came into force in 2009. These treaties all contain arbitration provisions.

Finally, it was reported that at the end of January 2016 Oman’s Ministry of Commerce and Industry was in the final stage of drafting a new foreign capital investment law with assistance from the World Bank. The law, in its third and final draft, has been prepared incorporating comments and suggestions received on the previous drafts circulated in 2015. The proposed investment law provides for UNCITRAL and ICSID arbitration, and for other international institutions.

20. To what extent have local courts been supportive and respectful of investment treaty arbitration, including the enforcement of awards?

Oman

Attitude of local courts towards investment treaty arbitration

As no publicly available investment treaty awards against Oman exist to date, it is not possible to evaluate the attitude of local courts towards a potentially adverse award. Oman however has signed and ratified the Washington Convention. As signatories to the New York Convention, Omani courts also recognize and enforce foreign arbitral awards.

For general international arbitration, under Omani law, the doctrine of sovereign immunity has no application with respect to the jurisdiction of the Omani courts. However, with regards to the enforcement of a judgment or an arbitral award against a foreign sovereign entity, in a recent ruling the Supreme Court has interpreted Article 366(1) of the CCPL to include properties and assets belonging to foreign governments existing within the Sultanate. The effect of this is that properties and assets of a ‘public nature’ owned by foreign governments will be deemed immune from execution or attachment in civil litigation.

National legislation protecting inward investments

21. Is there any national legislation that protects inward foreign investment enacted in this country? Describe the content.

Oman

National legislation

Substantive protections 30

Procedural rights

FET

Expropriation

Other

Local courts

Arbitration

Basic Law of the State

No

Yes. Article 11 of the Basic Law of the State stipulates that the Government of Oman must provide prompt market-value compensation for expropriation and that expropriation can only be done for public purposes. In practice, Oman compensates for any expropriations it makes, although Oman has been known to pay compensation in increments. This applies to both domestic legislation and bilateral investment treaty regimes.

General protections for investors and their property in accordance with the Law

Yes

No

The Foreign Capital Investment Law (Royal Decree No. 102/94)

This law provides the legal framework for non-U.S. and non- Gulf Cooperation Council (GCC) foreign investors

 

Yes

Free transfers of investments and returns

Tax and customs exemptions on imported plant and machinery

Long lease guarantee for project land

Waiver of formalities for important project-related items

No, but the law mentions local arbitration

Yes

National legislation protecting outgoing foreign investment

22. Does the country have an investment guarantee scheme or offer political risk insurance that protects local investors when investing abroad? If so, what are the qualifying criteria, substantive protections provided and the means by which an investor can invoke the protections?

Oman

Relevant guarantee scheme

Qualifying criteria, substantive protections provided and practical considerations

Export Credit Guarantee Agency

The independent Export Credit Guarantee Agency of Oman, a closed stock company, extends credit insurance, guarantees and financial support to Omani exporters, though its limit is USD 1 million per transaction. In addition, Oman is eligible for Export-Import Bank of the United States (EXIM) financing as well as Overseas Private Investment Corporation (OPIC) insurance coverage. Unusual for a Gulf country, Oman provides export credit insurance against commercial and political risk, through the Oman Development Bank.

Awards

23. Please provide a list of any available arbitration awards or cases initiated involving this country’s investment treaties.

Oman

Awards 31

Adel A Hamadi Al Tamimi v. Sultanate of Oman, Final award dated 3 November 2015, ICSID Case No. ARB/11/33 (English only). In this case, which is the only concluded arbitration against Oman to date, the tribunal rejected all claimants’ requests for relief. 12 Procedural Orders and 2 additional procedural decisions are available on the ICSID website. The dispute was brought in December 2011 and it is the first investment dispute under the United States–Oman Free Trade Agreement.

Pending Proceedings

Attila Dogan Construction and Installation Co. v. The Sultanate of Oman. A dispute under the Turkey-Oman BIT was notified to Oman on 23 March 2013. No other document than the Notice of Dispute is publicly available.

Samsung Engineering Co., Ltd. v. The Sultanate of Oman (ICSID Case No. ARB/15/30), brought under the Korea-Oman BIT

State General Reserve Fund of the Sultanate of Oman v. Republic of Bulgaria (ICSID Case No. ARB/15/43), brought under the Oman-Bulgaria BIT

Reading List

24. Please provide a list of any articles or books that discuss this country’s investment treaties.

Oman

Article/Book

Abdul Hamid El-Ahdab, 'The New Omani Arbitration Act in Civil and Commercial Matters' (1997) 14 Journal of International Arbitration, Issue 4, pp. 59–87

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2364323

https://www.international-arbitration-attorney.com/wp-content/uploads/arbitrationarbitrationlawE24-27.pdf

http://globalarbitrationreview.com/reviews/22/sections/82/chapters/838/oman/

Oman in Albert Jan van den Berg (ed), Yearbook Commercial Arbitration 1998 - Volume XXIII, Yearbook Commercial Arbitration, Volume 23 (© Kluwer Law International; Kluwer Law International 1998) pp. 570 - 571

Abdallah Ben Mohamed Saidi, The Development of Arbitration in the Sultanate of Oman, International Journal of Arab Arbitration, (© International Journal of Arab Arbitration; International Journal of Arab Arbitration 2010, Volume 2 Issue 2) pp. 13 - 20

Moussa Ben Salem Alezri, The Role of the Omani Judiciary in Supporting Arbitration, International Journal of Arab Arbitration, (© International Journal of Arab Arbitration; International Journal of Arab Arbitration 2010, Volume 2 Issue 1) pp. 27 - 36

Abdul Hamid Le-Ahdab, La nouvelle loi sur l'arbitrage du sultanat d'Oman, Revue de l'Arbitrage, (© Comité Français de l'Arbitrage; Comité Français de l'Arbitrage 1997, Volume 1997 Issue 4) pp. 527 - 534

Arbitration in Oman in Abdul Hamid El Ahdab and Jalal El-Ahdab , Arbitration with the Arab Countries, (© Kluwer Law International; Kluwer Law International 2011) pp. 531 - 569

Said Bin Saad Al Shahry, Enforcement of Arbitral Awards in the Sultanate of Oman in Nassib G. Ziadé (ed), BCDR International Arbitration Review, (© Kluwer Law International; Kluwer Law International 2014, Volume 1 Issue 1) pp. a39 - a46

http://www.state.gov/documents/organization/227428.pdf

http://www.state.gov/documents/organization/241903.pdf

http://kluwerarbitrationblog.com/2015/12/31/icsid-tribunal-dismisses-investment-treaty-claims-against-oman-part-i-the-facts-and-jurisdictional-claims/

http://kluwerarbitrationblog.com/2016/01/02/icsid-tribunal-dismisses-investment-treaty-claims-against-oman-part-ii-the-substantive-claims/

http://www.iclg.co.uk/practice-areas/international-arbitration-/international-arbitration-2015/oman#chaptercontent14

http://www.ey.com/Publication/vwLUAssets/Oman_proposes_new_foreign_capital_investment_law_to_attract_foreign_investment/$FILE/2016G_CM6189_

Oman%20proposes%20new%20FCI%20law%20to%20attract%20foreign%20investment.pdf

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