Amendment of the Commercial Law

Royal Decree No. 75/2010 — Amendment of the Commercial Law

We, Qaboos bin Said, Sultan of Oman,
Having considered the Basic Law of the State (Royal Decree 101/96), the Commercial Law (Royal Decree 55/90), and in the public interest, decree as follows:

Article One:
A new paragraph shall be added to Article (238) of the Commercial Law, reading as follows:
“In a commercial surety related to personal bank loans, the guarantor may request that a clause be inserted in the surety contract requiring the creditor to first pursue (attachment and seizure of assets of) the debtor before turning to the guarantor.”

Article Two:
Any provision contrary to this Decree is hereby repealed.

Article Three:
This Decree shall be published in the Official Gazette and shall come into force on the day following its publication.

Issued: 29 Jumada Al-Thani 1431 AH
Corresponding to: 12 June 2010 AD
Qaboos bin Said – Sultan of Oman

Key Points (Summary):

• Right of guarantor’s protection: In personal bank loans, the guarantor may require the contract to include a “benefit of discussion/exhaustion” clause (creditor must first pursue the debtor’s assets before recourse to guarantor).
• Repeal of conflicting provisions.
• Immediate enforcement: Effective from the day after publication in the Official Gazette.