01
Legal issue
A creditor may claim an agreed late-payment charge for the period of delay, subject to mandatory rules and current limits.
02
Published principle
The Arabic text published by the Supreme Court is the primary source. The English translation was published by the Technical Bureau; Russian and Chinese are unofficial Smart Global Capital editorial translations.
This is a published legal principle—an extract selected by the Supreme Court of Oman Technical Bureau—not the full text of the judgment.
The legislator affords a creditor the right to receive agreed-upon late payment charge (LPC) on a loan upon the debtor's default of payment at maturity, for the duration of the delay, regardless of whether the loan is commercial or personal. The aforementioned Article only provides for a general provision regarding loans; therefore, it cannot be restricted or limited except by an explicit exception or condition. It is legally established that a contract, validly formed, is a legally binding agreement between the contracting parties, and either party may not solely rescind or amend it. A judge, whose authority is confined to interpreting the contract provisions, may not refer to the parties' intention. Furthermore, misapplication of those provisions is misapplication of the law, which is a matter subject to supervision by the Supreme Court.
03
Applicability
The right to an agreed late-payment charge does not make every rate automatically enforceable. Mandatory caps, current CBO rules, product type, customer status and the specific contractual term must be checked.
04
Related instruments
- Applicable Central Bank of Oman lending rules
05