OMAN Law and Practice Contributed by: Abdulredha Al Lawati, Zainab Al Lawati, Daniyal Khalid and Aoun Al Zadjali, ALC Lawyers & Counsel
1.3 Dispute Resolution Strategy and Outcomes Dispute Resolution Strategy and Outcomes Standardised policies The approach to dispute resolution differs according to the class of insurance and the nature of the policy wording. For policies governed principally by unified or standardised terms, particularly motor insurance, disputes are frequently concerned with quantum rath- er than the existence of cover. Where liability is reasonably clear and the dispute concerns valuation, repair costs or the extent of loss, the parties commonly rely on the available official and technical records – including accident reports, medi- cal reports, repair assessments and valuation material – and engage in direct negotiations with a view to set- tlement. Early settlement can materially reduce expert and legal costs and avoid the uncertainty associated with a contested assessment of bodily injury, vehicle damage or other quantum issues. The economics of litigation also encourage commer- cial resolution of lower-value disputes. Recoverable advocates’ fees in Oman are generally modest and do not ordinarily reflect the actual legal expenditure incurred by the successful party. The losing party therefore does not meaningfully fund the winner’s legal costs, which limits the deterrent effect of an adverse costs order. For relatively small and mid-value claims, the cost of contested proceedings can consequently become disproportionate to the amount genuinely in dispute. Commercial and project policies The position is more complex in marine cargo, con- struction and engineering, energy, property and other substantial commercial insurance. Where liability under the policy is reasonably clear but the amount of the insured loss remains disputed, insurers and insureds commonly rely on loss adjust- ers, engineers, quantity surveyors, accountants or other technical experts, depending on the nature of the claim. Their reports can narrow issues of causation and quantum and provide the basis for direct negotia- tions or a commercial settlement.
For unified or standardised policies, disputes are often less about the prescribed wording itself than its application. Additional schedules, endorsements or insurer-specific provisions can still raise questions where they supplement the standard form or appear
to restrict a mandatory minimum. Commercial and Project Wordings
Drafting issues are more prominent in marine, con- struction and engineering, energy, property and other substantial commercial policies. These commonly comprise a schedule, general conditions, special conditions, endorsements, warranties and extensions. The recurring difficulty is therefore often inconsistency between provisions rather than ambiguity within a sin- gle clause. This arises particularly where the schedule and incor- porated wording do not align on certain issues such as applicable law, jurisdiction or dispute resolution, or where a specifically negotiated endorsement appears to alter a more general provision. Similar questions arise over limits, sub-limits, warranties and the tem- Article 165 of the Civil Transactions Law requires clear wording to be applied according to its terms; where ambiguity remains, the court seeks the parties’ com- mon intention by reference to the nature of the trans- action, custom and the standards expected between contracting parties. Article 166 separately addresses doubt, including in adhesion contracts, but a negoti- ated commercial insurance policy should not auto- matically be treated as an adhesion contract. That analysis remains subject to mandatory insur- ance law. Article 58 renders specified policy condi- tions ineffective in defined circumstances, including certain forfeiture provisions and arbitration wording that does not satisfy the statutory formality. Article 60 also requires policies issued in Oman to be in Arabic or accompanied by an identical Arabic translation, and gives the Arabic wording particular significance in interpretation disputes involving an Omani insured. For commercial placements, the policy documents should therefore be reviewed together for consistency before issuance. poral effect of later endorsements. Interpretation and Mandatory Rules
201 I NSURANCE L I T IGATI O N 2026
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