Overview Of The Omani Contract Of Muqawala (Construction Contract)

• Law Firm: Sariya Al Hadi & Ali Al Rashdi & Co.
• Subject Matter: Corporate/Commercial Law, Real Estate and Construction, Contracts and Commercial Law, Construction & Planning
• Author: Mr Ali Al Rashdi
• Published date: 20 February 2023

Contract of Muqawala is one of the nominate Contracts regulated by the Civil Transactions Law no. 29/2013, that deals with construction matters, such as construction of buildings and infrastructure and other construction works. The Civil Code governed the construction contract into four main sections in Articles 626 to 650, which are:

• Definition and scope of Muqawala contract
• Contractor's obligations
• Obligations of the owner
• Subcontracting
• Termination/end of contracting

The Contract of Muqawala provisions is also associated with other laws like the legislation for Engineering Consultancy Office and planning laws No. 27/2016 and labour law No. 35/2003. Below we explain the definition of the contact of Muqawala, the legal developments of the Construction Law, and the types of common disputes related to the construction contract in Oman.

Definition of The Contract of Muqawala

Article 626 of the Civil Transactions Law defines a contracting contract as a contract by which the contractor shall commit to manufacture a thing or perform work for remuneration. So, the word "contractor" given in definition includes the architect who prepares the designs and the contractor who undertakes construction. Also, the article stipulates reciprocal obligations on both the contractor and the employer; therefore, according to Article 157 of the Civil Transactions Law, each of them may refrain from implementing his commitment if the other contractor does not implement what he was obligated to.

Developments to the Contract of Muqawala in Oman

During the period prior to the issuance of the Civil Code in 2013, there was no legislation governing the Construction Contract, except the decennial liability insurance stated by Article 16 of the Engineering Consultancy Offices Law no. 120/94 issued on 10 December 1994, which has been abolished and replaced with Royal Decree no. 27/2016 issue on 12 May 2016.

Despite that, since the 70s and up until 2013, the Omani courts continued to enforce the general principles related to Construction contract, most of which were principles stated by the comparative judicial rulings which follow the Civil Law System, mainly the Egyptian Court of Cassation.

Common Construction disputes

Below we outline the most significant Construction disputes arising before the Omani Courts:

1. Design and construction defects disputes

Disputes associated with design and construction defects may arise for multiple reasons, including a flaw in planning and...