OMAN Law and Practice Contributed by: Ahmed Said Al Jahwari, Idil I. Kaner and Al Muhalab Al Issai, Dr. Ahmed Said Al Jahwari & Partner Law Firm
6. Enforcement 6.1 Enforcement of Collateral by Non-Bank Secured Lenders A non-bank secured lender may enforce its collateral upon the occurrence of events of default as set out in the loan agreement, such as non-payment, insolvency of the borrower, or breaches of covenants. Enforce - ment in practice typically requires a court judgment or order to sell pledged assets or commercial mortgages, as self-help remedies are limited. Securities must be properly registered and perfected in accordance with applicable regulations to be enforceable. Non-bank private credit providers should ensure that the bor - rower has the authority to grant security and (if appli - cable) that necessary board or shareholder approvals have been obtained, as deficiencies may undermine enforcement. In a typical private credit restructuring, lenders generally enforce share pledges rather than pursuing immediate liquidation of operational assets, which can be slower due to court procedures. 6.2 Foreign Law and Jurisdiction Omani law permits parties to select a foreign law as the governing law of their contract. Submission to a foreign jurisdiction is generally allowed; however, enforcement in Oman is not automatic and may be subject to local recognition requirements, which is why arbitration is often preferred in practice. Waivers of immunity are typically included in sovereign and sovereign-linked transactions, but their effectiveness depends on the nature of the counterparty and public policy considerations. 6.3 Foreign Court Judgments Foreign court judgments are generally enforceable in Oman, but enforcement is subject to certain condi - tions rather than a full retrial of the merits. Several foreign jurisdictions have reciprocity agreements with Oman, which allow for simplified enforcement proce - dures. Oman’s ratification of the New York Convention facilitates the recognition and enforcement of foreign arbitral awards, which is why private credit providers often prefer arbitration to foreign court proceedings. Arbitration also enables more predictable cross-bor - der enforcement, particularly when assets are located in multiple jurisdictions.
agree on the relative ranking of their claims. However, in insolvency, the enforceability of contractual subor - dination may be limited, as government claims take priority over private creditors regardless of registration order. 5.8 Priming Liens and/or Claims Oman does not have an extensive statutory frame - work governing debtor-in-possession financing or automatic priming liens. Any priming of existing secu - rity interests requires the consent of existing secured creditors and is typically governed by the terms of intercreditor agreements. 5.9 Cash Pooling and Hedging/Cash Management Obligations Cash pooling in Oman is primarily bank-led, with very limited use in private credit transactions. Hedging arrangements are also uncommon in private credit deals, and where they are implemented, they are typi - cally structured offshore. 5.10 Appointment of Collateral Agent In Oman, it is generally not customary for a security or collateral agent to hold liens on behalf of multiple lenders, as there is no statutory regime governing col - lateral agents. Security is typically granted directly to each lender. Security agent structures are primarily seen in club deals or transactions governed by for - eign law. Where a loan is assigned, the related security gener - ally needs to be re-taken in the name of the new lender to maintain enforceability and priority. Private credit lenders typically address these limita - tions by using fronting banks to centralise enforce - ment rights, restricting or regulating loan transfers to preserve security structures, and relying on share pledges, intercreditor arrangements, and contractual mechanisms to streamline control and manage opera - tional complexity.
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