OMAN Law and Practice Contributed by: Abdulredha Al Lawati, Zainab Al Lawati, Daniyal Khalid and Aoun Al Zadjali, ALC Lawyers & Counsel
moning process, does not deprive the claimant of the right of enforcement and, therefore, that the award is to be enforced as soon as it meets the requirements of the New York Convention and the filing of the award was proceeded without any nullification filings made by the respondent. 3.3 Practical Use of Arbitration in Insurance Matters Arbitration in insurance disputes in Oman occupies a somewhat distinct position within the broader arbi- tration framework. Arbitration is not the predominant mechanism for resolving ordinary insurance disputes, which are generally determined by the Omani courts. This is partly due to certain restrictions imposed by the Law of Insurance Companies, promulgated by Royal Decree No 12/79, on arbitration clauses incor- porated into standard insurance policies. In particular, Article (58) of the Law of Insurance Com- panies limits the effectiveness of arbitration provisions in the general terms and conditions of an insurance policy. Accordingly, an arbitration clause incorporated as part of the standard or general conditions of an insurance policy may be nullified, with jurisdiction consequently remaining with the competent Omani courts. This restriction does not, however, exclude arbitra- tion altogether from the insurance sector. Parties remain able to resort to arbitration in appropriate circumstances, particularly in complex, high-value or bespoke insurance arrangements falling outside the ordinary course of standard consumer insurance. Arbitration is therefore more commonly encountered in connection with insurance covering major construc- tion and infrastructure projects, industrial facilities and plants, transportation risks, real estate developments and other substantial commercial risks. In such transactions, the arbitration agreement is typically contained in specifically negotiated terms, endorsements or special conditions agreed between the parties, rather than merely forming part of the insurer’s standard general conditions. This distinction is important when assessing the validity and enforce- ability of an arbitration agreement under Omani law.
By contrast, disputes arising from standardised insur- ance products, particularly motor and medical insur- ance, are more commonly resolved before the Omani courts. Such products are generally governed by standardised policy terms and applicable regulatory requirements. By way of example, Ministerial Deci- sion No KH/19/2016 introduced the Standard Unified Motor Insurance Policy, within the broader regulatory framework applicable to motor insurance in Oman. The standard policy contemplates the jurisdiction of the competent courts to resolve disputes arising under the policy. Omani law does not, however, adopt a general pro- hibition against arbitration in insurance-related dis- putes, and Omani judicial precedents show that the application of an arbitration agreement depends on its wording, the parties bound by it, and the nature of the underlying legal relationship. An important example is Supreme Court Decision No 195 in Appeal No 174/2005. In that case, the Supreme Court confirmed that an insurer could bring a direct action to recover amounts paid to the beneficiary under a carriage contract after compensating the ben- eficiary for the actual value of the damaged goods and obtaining an assignment authorising the insurer to pursue the carrier. Significantly, the Court held that the arbitration agree- ment concluded between the shipper and the car- rier did not prevent the insurer from bringing its claim before the courts. The principle underlying the deci- sion was that an agreement to arbitrate has a relative contractual effect: like any other contractual arrange- ment, an arbitration agreement is binding upon its parties and does not automatically extend to a third party merely because that party’s claim is connected with the underlying contractual relationship. This prin- ciple can be particularly relevant in insurance disputes involving subrogation or assignment of rights. Where a valid arbitration agreement exists, insurance arbitrations generally follow the same procedural framework as other commercial arbitrations. The par- ties therefore retain considerable procedural autono- my, including the choice of arbitral institution or rules, seat of arbitration, applicable law, and appointment of
206 I NSURANCE L I T IGATI O N 2026
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