Drafting Arbitration Clauses in Omani Contracts: A Practical Guide

The arbitration clause is a small provision at the tail of a contract, yet it decides the fate of any dispute arising from it: where it is heard, in what language, and before whom. In Oman it is governed by the Law of Arbitration in Civil and Commercial Disputes, Royal Decree 47/97, which requires the arbitration agreement to be in writing on pain of nullity. Said Ibrahim Ambusaidi Advocates (SIA), based in Al Khoudh, Muscat, drafts and reviews arbitration clauses in commercial contracts.

What does the law require of an arbitration agreement?

Article 10 of the Arbitration Law defines the arbitration agreement as the parties’ agreement to resort to arbitration to settle all or some of the disputes that have arisen, or may arise, between them in connection with a defined legal relationship, contractual or otherwise. It takes two forms: an arbitration clause included in the contract before any dispute, or a submission agreement concluded after the dispute arises — in which case the matters covered by the arbitration must be specified.

The non-negotiable requirement is writing: an unwritten arbitration agreement is void. The writing requirement is satisfied by signed instruments and by exchanges of letters and written means of communication. The subject of the dispute must also be one in which settlement is permissible, and the agreement must come from someone with the power to dispose of the right in dispute.

What are the elements of an effective clause?

A successful clause answers the questions before they are asked: the scope of covered disputes, in comprehensive wording spanning the contract’s formation, performance, interpretation, and termination; the number of arbitrators — one or three, always an odd number; the appointment mechanism when a party defaults, either by reference to an arbitral institution and its rules or by activating the competent court’s role; the seat of arbitration, which determines the governing procedural law; the language of the arbitration; and the law applicable to the merits.

Each element has a price that appears on the day of the dispute: a distant seat means multiplied costs; an unconsidered language means translating every document; a missing appointment mechanism means months of paralysis before the proceedings even begin.

Which drafting mistakes paralyse a clause?

The most dangerous are what practitioners call pathological clauses: a clause referring to an arbitral institution that does not exist or misnaming it; a contradictory clause combining court jurisdiction and arbitration without ordering them; an ambiguous clause that does not reveal whether it is binding or optional; and a clause in a contract signed by someone without authority to bind. These defects open the door to disputing the very existence of the agreement — and they are among the grounds on which an action to annul the eventual award may be brought under the law.

Note also that the arbitration clause is separable from the contract containing it: the contract’s nullity does not by itself entail the clause’s nullity — which preserves the tribunal’s jurisdiction to decide even the dispute over the contract’s validity.

Key facts

• Arbitration agreements in Oman are governed by the Arbitration Law RD 47/97 and must be in writing or they are void.
• The agreement takes the form of a pre-dispute clause or a post-dispute submission specifying the covered matters, under Article 10.
• No arbitration in matters where settlement is impermissible, and no agreement by someone without power over the right.
• The effective clause fixes: scope, number and appointment of arbitrators, seat, language, and applicable law.
• Pathological clauses — wrong institution, contradictory wording — invite disputes over the agreement’s existence and can lead to annulment of the award.
• The arbitration clause is separable from the contract; the contract’s nullity does not automatically void it.

When to involve a lawyer

When drafting every contract of value — not when the dispute arises. Reviewing an arbitration clause before signature costs an hour of a lawyer’s time; a defective clause can cost years of jurisdictional fighting before the merits are ever reached. And if you are offered a contract with arbitration seated far away or under rules you do not know, pricing its effect before accepting is far cheaper than discovering it too late.

At Said Ibrahim Ambusaidi Advocates (SIA) we draft and review arbitration clauses in commercial, construction, and investment contracts, and represent clients in arbitral proceedings and the enforcement of awards before the courts across Oman. The first consultation is free by phone or WhatsApp on +968 9706 3030. We are based in Al Khoudh, Seeb, Muscat, and work Sunday to Thursday, 9:00 to 13:00 and 14:00 to 17:00, in Arabic and English.

This article is general legal information, not legal advice.