Bloomberg/Christopher Pike

Economy

Oman to introduce bankruptcy and insolvency law in July 2020

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The bankruptcy law allows the debtor to request a protective settlement if their financial business is disturbed which would lead to suspension of payment of debts, heirs to the business may apply for protective reconciliation if they decide to continue trading.

Monday 21, October 2019 BY KUDAKWASHE MUZORIWA

Oman’s Ministry of Commerce and Industry (MoCI) said that the Sultanate’s bankruptcy and insolvency law will come into effect from July 2020 and it will help companies to get out of the financial turmoil after paying debts and reconciling with creditors as per a restructuring plan.

Mohamad bin Rashid al Badi, the acting Director of Legal Department in the Ministry of Commerce said that a debtor who would have stopped paying their debts can apply to the Audit and Control of Commercial Establishments Department to request restructuring provided that the debtor continues his business during the two years preceding the filing of the application and that no final judgement has been issued against him to declare bankruptcy.

According to local reports, inheritors of the debtor also have the right to apply the same request during one year from the date of the debtor death, provided that the company is not in the process of liquidation.

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.

Similarly, the bankruptcy law grants the right of every trader to file for bankruptcy, in case they stop paying their commercial debts following the disruption of business activities. 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, said al Badi.

TAGS : Ministry of Commerce and Industry, bankruptcy and insolvency law

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