On 22 July 2014, Royal Decree No 34/2014 (the Decree) amending some of the provisions of the Omani Commercial Agencies Law (the Oman Agencies Law) came into force in Oman.
On its face, the Decree appears to mark a significant departure from the regime under the old Oman Agencies Law. In particular:
- The powers previously granted to the Minister of Commerce and Industry to ban the importation of a foreign principal's goods into Oman have been removed.
- The prohibition against the sale of a foreign principal's goods through another agent has been removed.
- Commercial agents no longer have a statutory right to claim damages for commission earned from the sale of a foreign principal's goods by another agent.
- The provisions in the Oman Agencies Law relating to the automatic renewal of commercial agency agreements have been removed.
- The Ministry now has the power to break up monopolies over specific types of commodities and services.
It remains to be seen how the provisions of the Decree will be interpreted and applied by the Omani Courts and the Ministry of Commerce. We expect commercial agents in Oman will seek to challenge the application of the Decree and time will tell as to whether those challenges will be successful. If the changes to the Oman Agencies Law are upheld, Oman may well become a more attractive place for foreign companies to do business in and allow companies with an established presence in the country to re-organise their existing distribution networks.