06 Nov 2019
New Bankruptcy and Insolvency Law
A new bankruptcy to be implemented on Oman. This will come into effect from 1 July 2020 onwards. This law is for people in Oman to declare bankruptcy, and that will help them to come out of it quickly.
The law was passed under Royal Decree and which includes a set of rules and regulations, and conditions for the bankrupt party to pay off his creditors according to a restructuring plan that has been previously agreed upon.
“The debtor who has stopped paying his debts can apply to the Audit and Control of Commercial Establishments Department of the MoCI to request restructuring through settling the disputes with creditors, provided the debtor continued his business during the two years preceding the filing of the application, and that no final judgment has been issued against him towards declaring bankruptcy. “The inheritors of the debtor have the right to apply the same request one year from the date of the debtor’s death, provided that the company is not in the process of liquidation, and the debtor continues to manage his funds during the implementation phase of the restructuring plan, and remains responsible for any obligations or contracts arising prior to or after the date of the adoption of the restructuring plan,”said Mohamad bin Rashid Al Badi, the acting director of the Legal Department at the Ministry of Commerce and Industry (MoCI).
A bankruptcy case shall not arise except by a court ruling without which the cessation of the payment of debts shall have no effect unless the law provides otherwise.The heirs of the debtor may, in accordance with the provisions of the bankruptcy law, file for bankruptcy after the death of the debtor. The court may impose a fine of not less than OMR200 and not more than OMR500 if the trader pretends bankruptcy. The summary of the judgment shall be published in the Official Gazette at the debtor’s own expense,” Badi added.