Building law and regulation in Oman during Covid-19

1. Is there construction-relevant COVID-19 regulation?

The Omani government has not enforced any construction-specific COVID-19 laws or regulations at the present time. However, the Supreme Committee for Dealing with COVID-19 (which was formed by an Order of HM The Sultan of Oman on 10 March 2020), has issued general regulations with measures to be taken to control the spread of COVID-19, including: 

  • the closure of all shops except those providing food, consumer items, clinics, pharmacies and opticians;
  • restricting the circulation of people; 
  • flight suspensions; and
  • restricting the movement between the governorates by installing checkpoints on entry and exit points on the roads. 

These restrictions may indirectly have a negative impact on the progress of construction in Oman.  However, there are exemptions on the restriction of movement between Governorates for transporting ‘essentials’, including commercial and construction materials, petroleum derivatives and other materials used by the public and private sectors. 

Although other (non-essential) sectors have been ‘locked-down’ and people are strongly being encouraged to work from home, this does not apply to the construction industry. Instead, certain safety measures are being taken on site by all contractors, in order to prevent the spread of COVID-19 in line with the Supreme Committee for Dealing with Covid-19’s recommendations regarding distancing. 

2. Subsidies and other government support for employer, contractor and other involved parties? (generic, high level only).

The Omani government has not yet put in place any subsidies or financial support for employers, contractors or other parties involved.  

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.

4. Does the Epidemic give rise to termination rights to either party?

Yes, if an Omani court considers the Epidemic amounts to a force majeure event, then parties may rely on Article 172 of the Oman Civil Code.  In addition,  the Parties might be able to rely on Clause 66 of the Standard Conditions (Frustration).  See the answer to question 3 above.

5. Do the measures currently being taken in relation to the Epidemic amount to change in law? What are the price and time consequences?

Not strictly. However, although the measures currently being taken in Oman are not passed as laws (Royal Decrees) nor do they amount to change in law, they are binding to the same extent as a law.

In Oman, no overall lock-down is in force as of yet. As mentioned above, the measures that currently apply do not (yet) directly address the construction industry. Regardless, it cannot be ruled out that further and stricter measures will be taken by the government that would amount to a change in law.

6. Are there any other issues relevant to COVID-19 the construction industry should be aware of?

Not for the time being. 

Randall Walker
Patrick McPherson
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Ben Ewing
Partner
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