Whether the effects of the Coronavirus pandemic would constitute force majeure will depend on (i) whether the relevant construction contract included any provisions relevant to force majeure; and (ii) the application of Omani law.
In this regard, most construction contracts in Oman are based on the Oman Standard Conditions for Building and Civil Engineering Works - Fourth Edition September 1999 (the “Standard Conditions”). The Standard Conditions do not explicitly set out any provisions specific for force majeure, nor is the term defined (although the parties are free to define it in the schedule of amendments). However, the Parties might be able to rely on Clause 66 (Frustration), which provides:
If a war, or other circumstances outside the control of both parties, arises after the Contract is made so that either party is prevented from fulfilling his contractual obligations, or under the Law of the Sultanate of Oman, the parties are released from further performance.
As a matter of Omani law, Article 172 of the Oman Civil Code (Royal Decree 29/2013) (the “Oman Civil Code”) provides:
In contracts binding on both parties, if force majeure supervenes, making the performance of the contract impossible, the corresponding obligation shall cease, and the contract shall be automatically terminated.
The Omani Civil code does not, however, go on to define what circumstances give rise to force majeure, and the test will be left to the Omani courts or arbitral tribunals, as applicable.
In terms of judicial guidance, the Omani courts have previously recognised that natural disasters may constitute circumstances that result in the frustration in the performance of a contract which might justify the termination of a contract. However, in our experience, Omani courts and arbitral tribunals are more likely to excuse part performance for a limited period of time if a force majeure event arises. In such circumstances, the contractor would likely be entitled to an extension of time and/or additional costs in the usual course.