Debt Collection in Oman

Debt collection in Oman begins with an assessment of the debtor’s solvency, business sector, commercial history, documentary evidence of the debt, ongoing court cases, existing enforcement proceedings, asset profile and possible grounds for disputing the claim. For a foreign creditor, this assessment should also identify the debtor’s exact legal name, place of business in Oman, contractual role, available bankable assets, receivables, movable or immovable property, company shares, securities and any signs of insolvency or asset transfers.

If the debtor is actively engaged in commercial activity and the creditor has documents confirming the debt, the recovery strategy may begin with the out-of-court stage. At this stage, the creditor should collect and organise the contract, invoices, delivery documents, account statements, correspondence, acknowledgements of debt, payment history, security documents and evidence of previous demands. In commercial matters, Omani law gives practical importance to documentary evidence and properly recorded business communication, especially where the claim may later be filed through court proceedings or an order for payment.

The out-of-court stage involves structured negotiations with the debtor in order to obtain payment of the creditor’s claim or another documented settlement option, such as return of goods, transfer of the debt to a third party, exchange of services or goods, set-off, provision of security or an instalment arrangement recorded in writing.

Interaction with the debtor usually begins after sending a written demand by an appropriate communication channel. In commercial matters, a notice sent by registered post with a record of delivery may be useful because it helps prove that the debtor was formally informed of the claim. If the creditor intends to request an order for payment, the debtor must first be required to pay the debt within a period of at least eight days before the application is submitted.

If the debtor ignores the demand, disputes the debt without sufficient grounds, avoids authorised communication, transfers assets, shows signs of insolvency or refuses a workable settlement, the creditor should move to the legally appropriate recovery route in Oman: ordinary court proceedings, an order for payment, enforcement of an existing enforceable title, recognition and enforcement of a foreign judgment or bankruptcy-related measures.

Before initiating judicial collection, it is important to assess the applicable limitation period. As a general civil-law reference point, claims may be subject to a 15-year limitation period unless a special shorter period applies. For commercial obligations between merchants that are connected with their commercial activities, the limitation period is generally 10 years from the date when the obligation becomes due.

The consequences of the expiration of the limitation period are applied in the court of first instance and the appellate court only at the request of the debtor. The limitation period may be interrupted by the explicit or implicit recognition of the creditor’s claim by the debtor, including conduct confirming the existence of the obligation. After interruption, a new limitation period begins to run.

Omani law provides for judicial debt collection through the ordinary court procedure and through the order for payment. For commercial and investment-related disputes, the creditor should also take into account the Court of Investment and Commerce, established by Royal Decree 35/2025 and operating from 1 October 2025. The court is headquartered in Muscat and is subordinate to the Supreme Judicial Council; cases that were already filed before the entry into force of the new law continue before the courts that were already considering them.

The ordinary court procedure begins with the filing of a statement of claim with the court. The court registry registers the claim on the day of filing in a special register in the order of receipt. A separate file is opened for each claim, which is then transferred to the chairman of the court or a judge appointed by him to determine the date of the hearing. The date of the hearing is recorded in the original statement of claim and its copies in the presence of the plaintiff or his representative.

The following day, the registry transfers the original and copies of the statement to the bailiff service to notify the debtor and return the original claim to the court. The bailiffs are obliged to notify the claim within twenty days of its receipt, unless the hearing is scheduled within this period. In such a case, the notification must be made before the date of the hearing, observing the deadlines for appearance.

The deadline for the defendant to appear in court is eight days from the date of notification of the defendant. The defendant must file his objections with the court registry, along with the documents, no later than three days before the scheduled hearing date. For this reason, the creditor should prepare the evidence file before filing the claim, including the contract, invoices, delivery records, correspondence, account statements, payment demands, acknowledgements of debt and documents supporting interest or costs if they are claimed.

The parties must appear at the scheduled hearing in person or through a representative appointed from among their lawyers. If the defendant is absent from the first hearing and the statement of claim was served on him in person, the court shall render a decision on the case. If the statement of claim was not served on him in person, the court, except in urgent cases, shall postpone the hearing to the next hearing, of which the defendant shall be notified.

In both cases, the decision shall be deemed to have been rendered in the presence of the defendant. If the defendant appears before the end of the hearing, any decision rendered in his absence shall be annulled.

The court shall begin the first hearing by inviting the parties to enter into a settlement agreement. If reconciliation is not reached, the case shall be considered at the same hearing. The case may not be postponed more than once for the same reason caused by one of the parties, and the period of postponement shall not exceed two weeks.

During the consideration of the case, the court hears the positions of the parties, interrogates witnesses if necessary, examines written evidence and, after the parties have debated, makes a decision at the same hearing or postpones its delivery to the next hearing.

The procedure for issuing an order for payment is applied in cases where the creditor’s right is confirmed in writing, is immediately enforceable, and the amount of the debt is precisely determined. It may also apply where the claim concerns a specified movable asset by description, type or quantity, or where the creditor’s right arises under a commercial instrument and the recourse is limited to the persons covered by the payment order rules.

To use this procedure, the creditor must first send the debtor a demand for payment. If the debtor does not comply with it within at least eight days, the creditor has the right to file an application with the competent court for the issuance of an order. A registered letter with acknowledgment of receipt is sufficient for the payment demand, and the amount claimed in the application may not exceed the amount stated in the demand.

Documents confirming the existence of the debt and the fact of the demand are attached to the application. After the application is filed, the court issues an order for payment within three days. If the court cannot satisfy the application, a hearing is scheduled, and the court registry is obliged to notify the defendant of the date of the hearing.

The application and the order must be served on the debtor within six months from the date of issuance of the order, otherwise they lose force. The debtor may file a complaint against the order within 15 days from the date of its receipt. The complaint must be substantiated, otherwise it will be recognized as invalid. The complaint is considered in the same manner as the consideration of a statement of claim.

If the defendant fails to lodge a complaint within the prescribed period, the order for payment becomes a final judgment.

The judgment of the court of first instance may be appealed to the Court of Appeal within 30 days from the date of notification of the contested judgment. The judgment of the Court of Appeal may be appealed to the Supreme Court of Oman within 40 days from the date of notification of the contested judgment. Filing an appeal to the Supreme Court does not stay the execution of the contested judgment.

However, the court may order that the execution of the judgment be temporarily stayed if so requested by the applicant in the appeal and if there is a threat of significant damage that cannot be remedied if the execution continues. If the court stays the execution of the judgment, it may order the posting of security or take other interim measures. The judgment of the Supreme Court is final and cannot be further appealed.

For international creditors, a separate recovery route is recognition and enforcement of foreign judgments in Oman. A foreign judgment or order may be enforced in the Sultanate of Oman under the same conditions prescribed by the law of the country of origin for the execution of Omani judgments. The application is filed before the Court of First Instance composed of three judges in the district where enforcement is sought, through the ordinary procedures for filing a lawsuit.

The Omani court verifies that the foreign judgment or order was issued by a competent judicial authority according to the international jurisdiction rules of the country where it was issued, that the judgment has become final under that law, and that it was not based on fraud. The court also verifies that the parties were summoned and correctly represented, that the foreign judgment does not violate a law in force in Oman, that it does not conflict with an Omani judgment or order, and that it does not contain anything contrary to public order or morals. The same framework also applies to foreign arbitral awards, authenticated instruments and settlement minutes approved by foreign courts where the legal conditions are met.

Once the judgment has entered into legal force, the creditor must initiate enforcement proceedings. The judgment may be brought for enforcement for 15 years. The period for filing a judgment in a commercial dispute is 10 years.

Commercial enforcement in Oman may be requested for a judgment, conciliation record, judicial order, order for payment, order on petition, foreign judgment or other enforceable judicial document or instrument. The request may be submitted by the creditor personally, through an attorney or through an authorised legal representative, and should be supported by the enforceable title, the execution request and the documents required for execution.

Within the framework of compulsory execution, the creditor’s claims may be satisfied by seizing and writing off funds from the debtor’s accounts; seizing movable and immovable property of the debtor with their subsequent sale; seizing and confiscating securities; seizing and confiscating company shares; and seizing the debtor’s property or debts held by third parties. If the debtor’s assets are not known, the enforcement strategy should focus on identifying bankable assets, receivables, registered property, shares, securities and other assets capable of attachment.

In appropriate cases, the creditor may also request a travel ban against the debtor if there are serious reasons that may lead to the debtor fleeing outside the Sultanate of Oman. Omani procedure also allows a request for a debtor’s imprisonment order where the debtor refuses to comply with the judgment despite proven ability to pay or where there is a risk of fleeing the country. These measures are connected with enforcement and depend on the enforceable title, supporting documents, the execution file and the court’s assessment of the circumstances.

An alternative option for collecting debt from a company or an entrepreneur is the bankruptcy procedure of the debtor. According to the Omani Bankruptcy Law, any creditor with an undisputed commercial debt that has become due and payable may demand that the merchant debtor be declared bankrupt if the debtor has stopped paying the debt. A creditor with a matured civil debt may also have this right if the creditor proves that the merchant debtor has stopped paying matured commercial debts in addition to the civil debt.

A creditor with a deferred commercial debt may seek bankruptcy if the debtor has no known place of residence in Oman, goes into hiding, closes his shop or starts liquidation, or commits acts detrimental to creditors, provided that the creditor provides evidence of the cessation of payments on commercial debts. The creditor’s application is filed with the court secretariat and should be supported by evidence that the debtor has ceased to repay debts. Omani bankruptcy law also provides related procedures, including restructuring and preventive composition, which may become relevant where the debtor’s financial condition requires a collective creditor strategy rather than separate enforcement against individual assets.

After the opening of bankruptcy proceedings, the court may fix a provisional date of cessation of payment, appoint a bankruptcy receiver and appoint the judge supervising the bankruptcy. The bankruptcy framework is relevant for a creditor because it may preserve the debtor’s estate, centralise creditor claims, review the debtor’s conduct and identify transactions that reduced the assets available for distribution.

At this stage, if the debtor’s assets are insufficient to fully satisfy the creditors’ claims, it is possible to set aside the debtor’s transactions that were made with the intention of causing detriment to creditors.

Such transactions or acts made after the cessation date but before the bankruptcy order is issued include, but are not limited to: donations of any kind, with the exception of small gifts that are considered customary; settlement of debts before their maturity, regardless of the method of payment; settlement of debts in a manner not provided for by agreement of the parties; any provision of collateral or other security to cover a debt that existed before the bankruptcy was declared; any transaction that causes detriment to creditors, provided that the debtor’s counterparty knew about the cessation of payments.

Claims for invalidation of the above transactions or actions may be filed within two years from the date of the bankruptcy decision. As a result of the cancellation of the above transactions, it is possible to return to the bankruptcy estate what the debtor lost from such transactions and thereby increase the assets available to satisfy the claims of creditors and cover the costs of implementing the bankruptcy procedure.

For company debtors, bankruptcy may also affect persons connected with management and ownership depending on the company form and the conduct that led to the loss of assets or creditor prejudice. In particular, the bankruptcy analysis may include whether the debtor’s managers, liquidators, general partners, shareholders or other controlling persons participated in asset transfers, preferential security, harmful liquidation steps or other conduct that reduced the estate available to creditors.

If you need professional support with debt collection in Oman, Grandliiga can assist at every key stage of the recovery process: debtor and asset assessment, document analysis, written demand strategy, settlement negotiations, limitation review, ordinary court proceedings, order for payment applications, recognition and enforcement of foreign judgments, enforcement proceedings, travel ban or debtor imprisonment requests where legally available, and bankruptcy-related recovery measures.

The appropriate strategy depends on the debtor’s status, the evidence available to the creditor, the type of obligation, limitation period, assets in Oman, possible objections, existing judgments, enforcement prospects and insolvency indicators. Contact Grandliga for a confidential assessment of the claim, documents and legally available recovery options in Oman.

# DEBT COLLECTION AGENCY OMAN

07.11.2024

1469