OMAN Law and Practice Contributed by: Abdulredha Al Lawati, Zainab Al Lawati, Daniyal Khalid and Aoun Al Zadjali, ALC Lawyers & Counsel
Where liability itself is disputed, the strategy is gener- ally different. The parties will first seek to determine whether the policy responds, including questions con- cerning the insured’s entitlement to indemnity, causa- tion, exclusions, compliance with policy conditions, applicable limits and sub-limits and, where relevant, the validity or interpretation of the policy wording. In substantial claims, it is important to maintain a dis- tinction between coverage and quantum: the assess- ment of the maximum amount of a loss does not itself establish that the insurer is liable to indemnify that loss. The drafting issues discussed in 1.2 Role of Policy Wording and Drafting also affect settlement strategy. Article 58 of the Insurance Companies Law creates a particular litigation risk where an insurer relies on a condition that may fall within one of the statutory categories of invalid provisions. In addition, ambiguity or inconsistency between the policy schedule, general conditions, special conditions and endorsements may create uncertainty as to the ultimate coverage posi- tion. This can encourage commercial settlement where the cost and risk of obtaining a judicial determination outweigh the difference between the parties’ posi- tions, while substantial or recurring coverage issues are more likely to proceed to formal determination. Formal proceedings and expert evidence Where settlement is not achievable, formal proceed- ings are increasingly front-loaded. Commercial insur- ance disputes falling within the jurisdiction of the Court of Investment and Commerce are subject to relatively short periods for the submission of plead- ings, supporting documents, Arabic translations and expert evidence. Questions of jurisdiction, admissibil- ity and procedural defences are addressed before the merits, making early identification of threshold issues particularly important. Expert evidence can be highly influential in techni- cally complex claims, particularly on causation and quantum, but it does not replace the court’s deter- mination of policy coverage and legal interpretation. Early engagement of the appropriate technical exper- tise therefore serves two purposes: it may narrow the dispute sufficiently to facilitate settlement, or it may
place the party in a stronger evidential position if pro- ceedings continue. Arbitration remains available where a valid arbitration agreement exists, particularly in substantial commer- cial insurance and reinsurance disputes, subject to the insurance-specific requirements governing the validity of arbitration clauses. 2. Jurisdiction and Choice of Law 2.1 Choice of Law in Insurance Contracts Omani law generally recognises party autonomy in determining the law applicable to contractual obliga- tions, including insurance and reinsurance contracts with an international element. Article 20 of the Civil Transactions Law, promulgated by Royal Decree 29/2013, provides that contractual obligations are generally governed by the law of the state in which the parties have their common domicile or, where their domiciles differ, the law of the place where the con- tract was concluded, unless the parties agree other- wise. This gives parties to a cross-border insurance or reinsurance arrangement significant scope to select the governing law of their contract. That autonomy is not absolute. A contractual choice of foreign law cannot ordinarily be used to circumvent mandatory provisions of Omani law or principles of Omani public policy, particularly where the insured risk, policyholder or regulated insurance activity is located in Oman. The Omani insurance sector contin- ues to be governed principally by the Insurance Com- panies Law promulgated by Royal Decree 12/1979, as amended, together with sector-specific legislation, regulations and decisions issued by the Financial Ser- vices Authority (FSA). Accordingly, the governing-law analysis in a cross- border policy should distinguish between the law governing the parties’ contractual rights and obliga- tions and mandatory Omani regulatory requirements that may apply irrespective of the contractual choice. Where there is no effective choice of law, the connect- ing factors under the Civil Transactions Law become particularly important.
202 I NSURANCE L I T IGATI O N 2026
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