Kuwait commercial law no 68 of 1980

A Summary of the Legal and Judicial System in the State of Kuwait Author(s): Abdul Rasoul Abdul Reda Source: Arab Law Quarterly, Vol. 6, No. 3 (1991), pp. 267-279 Published by: Brill Stable URL: http://www.jstor.org/stable/3381378 Accessed: 03-09-2016 12:20 UTC

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A SUMMARY OF THE LEGAL AND JUDICIAL SYSTEM IN THE STATE OF KUWAIT

Dr. Abdul Rasoul Abdul Reda

P R E FA C E

Kuwait emerged early in the eighteenth century and its esseniial elements as a State were completed in the middle of the said century, (1752 AD), when Kuwaitis chose

Sabah The First as their Ruler.

They formed a small cohesive society with a concordant social and economic life,

under the umbrella of Islam, a tolerant creed and law.

As the saying goes: Every cloud has a silver lining. The Iraqi aggression on Kuwait

has unintentionally drawn world attention to this country and its people. The nation took a unified stand before the invasion.

Since its establishment and until 1899 AD, Kuwait remained part of the Ottoman

Empire, the representative of the Moslem State. It then fell under British mandate in

accordance with the 1899 Treaty until independence on 19 June 1961. We shall discuss here how Kuwait was managed on the political, legal and judicial

levels. To facilitate reading we shall divide the subject into three Sections: the first

Section dealing with the period since the establishment of Kuwait or since the esseniial elements of the State were completed in the middle of the 18th century, until the con-

stitution of the State of Kuwait was issued in 1962. The second Seciion will expound

the legal and judicial system in the State following the consiituiion to date of creaiion

of the naiional council. The third Seciion will deal with the development of lepslaiion.

1. SYSTEMS OF KUWAIT SINCE ITS ESTABLISHMENT UNTIL THE 1962

C O N S T I T UT I O N

AX The Pre-Council Period

As the population in Kuwait increased, the Kuwaitis thought the presence of an Emir

was necessary to resolve their problems, diffierences and disputes. Hence, they chose

Sabah the First as their ruler, completing the essential elements of state: the terntory,

population and governing authority.

Naturally, social life was primitive and simple with only the sea and desert offering a landscape (a primitive and easy life to lead). All problems, major or minor, were

Head of the State Deparanent for lwgal Advice & Legislation, Council of Ministers, State of Kuwait; Former Dean of the Law School, University of Kuwait.

267

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268 ARAB LAW QUARTERLY

solved by the Emir, though some differences that occurred in the market places were

referred to members of the Emir's family, appointed for these purposes.

Whenever, the Ruler found great difficulty in resolving a problem, particularly

those related to Islamic Shan'a, he would refer it to a judge from among the men of

religion, whose judgment was immediately effective.

If the case was relevant to a certain profession, men of expenence were then the ref-

erence; their decision in such event was an effective ruling.

lEe Ruler dg this period did not possess any legislative power, while the legal

basis were derived from two sources: First, Islamic Shan'a (law) applied, in pariicular,

in the field of personal statutes, and men of religion passed judgments on all cases

referred to them; Second, Customs-the major source of law at the iime, in the

absence of any written law or reglllation. Certainly, custom was for the most part

locally and professionally based and legally binding to all.

In addiiion to the above sources, the Ruler always consulted sages on all decisions

related to governing the country, and was never an autocrat.

B. The Advisory Council (1921)

In 1921, a 12-member council was formed and chaired by the Ruler who was present

in all meetings and consulted about important issues. Administrative Councils were

established along with the Advisory Council due to the development of social, economic

and cultural lives. Expansion in the city and the growth in population made it neces-

sary to enhance municipal, educational and health services. Special departments were

then introduced to facilitate necessary utilities.

Each department had its own council (Municipal Council-Education Council-

Health Council) of 12 elected members who met weekly under the chairmanship of a

member of the Royal family deputising for the Ruler and reporting to him. The role of

those bodies was only consultative, each in its specialisation and not legislative.

The judicial authority remained in the hands of the Ruler who passed judgrnent on

all cases and referred criminal and personal statute cases to an Islamic Shari'a Judge,

to be dealt with according to the prourisions of Islamic Shan'a law.

Cases, however, were referred at ames to senior merchants who passed judgrnents

according to established commercial norms and tradiiions. Yet, the Emir's judicial

power (linlinished during this stage to govern only the Kuwaiti subjects and Moslem

foreigners. Otherwise, the judicial authority was vested in the British High Commis-

sioner in Kuwait who rendered judgments in litigations between the British subjects

or between the non-Moslem foreigners; a duality that would culminate in a new judi-

cial organisation law in 1959, as we shall see later.

C. The Lepslative Council (1938)

Wii the role of the Advisory Council coming to an end, the Legislative Council was

elected in a special way; a committee was forrned comprising three notable Kuwaiiis.

A selected list of the electorate was made and-the elections were carried out in the

house of a Kuwaiti citizen without any control over e results, concluding with the

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LEGAL AND JUDICIAL SYSTEM IN KUWAIT 269

victory of 14 members. The newly fol-llled council, then, convened and presided over

the late Sheikh Abdallah Al Salem Al Sabah, issued the first written Constitution of the Country made up of five articles.

It read as follows:

In the Name of Allah the Compassionate, the Merciful,

We, the Ruler of Kuwait,

According to the decision of the Legislative Council, have ratified this Constitution relying on the terms of reference vested in the council and have ordered it to be put into force. Article 1-The Nation represented by elected representatives shall be the source of power. Article 2-The Legislative Council shall enact the following laws:

(1) Budget Law: regulating and equitably channelling expenditure except for the Al-Sabah private property with which the council shall have no right to interfere.

(2) Judiciary Law: providing a system for Shari'a and Customary provisions to ensure justice

among the people.

(3) Public Security Law: inside the country and to its boundaries.

(4) Education Law: following the example of advanced countries.

(5) Health Law: protecting the country and the population against all kinds of epidemics. (6) UrbaIiisation Law, covering such operations as paving roads outside the city, building prisons,

digging wells and other iSrastructure and cons£ruction facilities.

(7) Emergency Law, stipulating provisions for cases of emergency and authorizing the Ruler to enforce all necessary pronsions to maintain security in the country.

(8) All other laws required for the interest of the country.

Article 3-The Legislative Council shall be the reference for all internal and external treaties, concessions and agreements that shall only be legal and legiiimate through the approval and supervision of the Council.

Article 4-Since the country does not possess a Court of Appeal, the task ofthe said court shall be entrusted to the Legislative Council until an independent organ is formed for the purpose. Article 5-The Speaker of the Legislative Council shall represent the execuiive power in the country.

Drawn on Friday, 11 Gamadi Al-Awwal 1357 H, 2nd July 1938 AD.

Ruler of Kuwait

Ahmed Al-Jabir Al-Sabah

The said document included some general constitutional principles but did not take

up the principle of separation of powers. Hence, the esecutive, legislative and judicial powers were mixed. The Council lasted for only six months and was later dissolved for controversial reasons.

In 1938, the Ruler of Kuwait, Sheikh Ahmed A1 Jaber Al Sabah, issued a decree

applying laws stipulated in the Magazine of 3ildicial Provisions on dealings in the

country. The Magazine, considered as a law of civil and commercial dealings as well as

part of the procedural rules, had been issued by the Ottoman State at the turn of the l9th century (1869 AD). The Magazine considered the Abu Hanifa School ofJurispru-

denceX as the official faith of the Ottoman State. Following are the most important fea- tures of the magazine:

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270 ARAB LAW QUARTERLY

(a) It did not tackle cases of personal statutes malTiage, divorce and alimony; nor did it discuss heritage, wills and waqfs. Consequently, the Maleki school was

applied in such cases.

(b) The Magazine comprised 1851 articles, divided into an introduction and 16 books,

namely; sales, rentals, suretyship, assiment) mortgage, deposition trust, donation,

usutpation, damage, interdiciion, duress, pre emption, partnership, pmsuration,

conciliation, acquittal, acknowledgment, lawsuits, evidences and oath taking, and

administration of the law.

(c) The most important criiicism levelled at the Magazine is the excessive definitions

and examples; some of the definiiions were even naive (a seller is he who sells; a

buyer is he who buys).

Kuwait, nevertheless, developed steadily aSer World War II, when oil was discovered

and exported first to Britain in 1946. Thus, economic and human resources increased,

leading to more diverse dealings. Such development included a new planning for gov-

ernment machinery, enacting written laws and re-organising the judicial system.

As for government machinery, the executive power remained in the hands of the

ruler but other support bodies were established including departments, councils, a

Higher Council and an organising body. A Higher Commission for home reform was

formed in 1954, culminating in the establishment of 24 government departments

which were reduced to ten and served as ministries.

Some departments had elected councils that were later appointed by the Ruler.

Heads of departments formed together a Collegiate Higher Council that served as a

cabinet and handled important state issues, examined draft laws, systems, budgets and

coordinated the work of government departments. In 1958 a ten member "Organiz-

ation Authority" was formed of seven merchants and three heads of department. It

was entrusted with administrative reform and relevant consultancy to the Higher

Council.

Enssting Written Laws. As stated above, the first written law to be applied in Kuwait

was the Xudicial Provisions Magazine on Civil and Commercial dealings, as decreed by

the Ruler of the State. Furthermore, other regulations were issued, such as the Trade

Organization Rules in 1938, The Travel Law and The Diving Law in 1940. These

reflected the maritime commercial nature of the Kuwaiti environment. Citizens used

to travel to India and Afiica for trade as well as for fishing and in search for pearls in

the depths of the Gulf, using their self-made boats.

More laws were later issued after being scrutinised and discussed by the Higher

Council in accordance with the proposals of the various government departments.

The Higher Council then submitted a draft law in its final form to the Emir for

endorsement or rejeciion. Following endorsement, the laws were published in the Official

Gazetle (Kuwait Today), first issued in February 1952. Most important among the

laws draEced during ochat period were: The Civil and Commercial Procedures Code,

The Commercial Law, The Maritime Law, The Corporate Law, The Law of Torts,

Insurance Law, The Joint-Venture Law, The Nationality Law, Passport Law, For-

eigners Residence Law, The Labour Law in Public and Private Sectors, Rental Law

and the Kuwaiti Currency Law.

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271 LEGAL AND JUDICIAL SYSTEM IN KUWAIT

There is no doubt that the laws climinished the role ofthe3idiSzl ns Maga2ine. This period also witnessed the establishment of the Department of Legal Advice

and Legislation by Decree No. 12 of 1960, as an affiliate to the Higher Council entxusted with drafting laws proposed by government bodies.

The Department was intended to draft properly and consistently laws along the lines of other applicable laws in the country. It was also assigned the task of reviewing state contracts, expressing opinions to the Government, and defending the Treasury's interests in cases where the Government is a litigant party.

As for the development of the judicial system, the jlldicial power was shared by two authorities: The British and foreigners were subject only to the British High Commis- sioner, with no interSerence on the part of the Kuwaiti judicial system. The latter was concerned with civil and commercial cases, which were shared by several bodies before 1959; courts, police departments, public security, municipalitieso and arbitration panels were responsible for settlement of commercial and marine disputes. Courts were formed as follows:

* The Executive Supreme Court, whose President is the President of all courts. * Shan'a Courts, comprising:

* the major Shan'a Court to examine heritage, criminal and civil cases; * Personal Statute Court (one for Sunni Moslems and another for Shiites); * a third court for minor crimes.

Courts applied provisions of the Magazine alongside those of the Shan'a in case the Magazine fell short of providing a legal opinion. A judgment could be re-egamined either through a person known for efficiency and knowledge or a council of Shan'a judges under the chief Shan'a judge.

Arbitration panels applied customs and traditions in commercial cases or the code of conduct adopted by members of professions and craEcs.

Following the issuance of Law No. 19 of 1959 regulating the judicial system, two courts were created:

* The Court of Full Jurisdiction: Forrned of four departments; Personal Statutes, Civil, Commercial and Penal.

* The High Court of Appeal: Formed of two departments; the first examined the rulings of the first and second departments in the Court of Full Jurisdiction, while the other examined the third and fourth.

A new department was formed in 1972 called the Department for Re-Examination (Cassation) of the awards of the Court of Appeal.

The judicial system reached filll development when Decree No. 23 of 1990 was issued regulating the system with the establishment of the Court of Cassaiion besides the High Court of Appeal and the Court of Full Jurisdiciion. * The Consiitutional Court: Fornled under Law No. 14 of 1973 to solely interpret consiituiional texts, examine disputes related to the consiitutionality of laws, law- decrees and regulations, as well as contests to the election or validity of membership of the parliament members. Rulings of this court are binding on all, including all courts.

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272 ARAB LAW QUARTERLY

D. Declaration of Independence

Kuwat arrned itself during the years preceding the independence with many achieve- ments and remarkable progress in the fields of poliiici al and economic integaiion, in addiiion to development ofthe judicial and legal systems. Kuwait has become a modein and advanced country which necessitated the annulment of the 1899 agreement and a declaraiion of independence in 1961. Capitulaions given to Britain were consequently withdrawn and the Government of Kuwait restored fiull powers, most important the judicial powers which extended to all residents of the country including British and Commonwealth subjects. With the declaraion of independence Kuwait has become an independent sovereiF state and a member of the Arab League and later the United Nations. Two months following the declaration) a Royal Decree No. 12 of 26 August 1961

was issued calling for general elections for a Constituent Council to draft the Consti- tution. The following is the text of the Decree:

Out of our desire to establish a rulirlg repme on sound and strong basis and in preparaiion for issuance of a constitution for the country, deriving its provisions from the country's policy based on democracy and targeiing the prosperity arld welfare of the people; 'YUe decreed the following: Article 1-Organisation shall be formed comprising the following members . . . Article II-A joint council shall be foruled of the members of the Higher Council and the afore- mentioned members of the orgsaiion auiority. The Joint Council shall undertake in addition to present tasks, drafling a law for the election of the members of the Consutuent Council which shall, upon formaiion, be entrusted with drafting the consetution. Article III-General eleciions for the Consiituent Council shall be held on November 1st, 1961 (a date later changed to December 2nd, 1961).

On 6 September 1961, Law No. 25 of 1961 was issued, later amended by Laws No. 28 and No. 32 of 1961, for the eleciion system of the Consiituent Council members. Law No. 1 of 1962 was also issued including the basic system of government in the transi- tional period. This law was considered an interim summary constitution with only 38 Anicles. The interim constituiion elaborated on public rights and fieedom, whether the

absolute (or natural, so to speak) which are filly unconditional, or the rights and Eee- dom regulated and restricted according to the law, such as personal fireedom, Eeedom of expression and freedom of possession. The interim constituiion also tackSed public powers in the state: execuiive, lepslaiive and judicial.

2. ENFORCEMENT OF THE 1962 CONSTITUTION UNTIL THE ESTABLISHMENT OF THE NATIONAL COUNCIL

AZ Issuance of the 1962 Constitution

The pexlllanent consiitution of the State of Kuwait was issued on 11 November 1962 after being drafted by the 2Smember Constituent Council. Where ministers, mem-

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273 LEGAL AND JUDICIAL SYSTEM IN KUWAIT

bers of the council by their post, did not vote on the final formula of the Consiituiion

the Emir (the late SheikE Abdullah Al Salem Al Sabah) endorsed it without amending

any of its 183 Ariicles.

The Constitution was divided into five chapters:

(1) the State and the system of government;

(2) the basic consiituents of the Kuwaiii society;

(3) public rights and duties;

(4) powers; and ts . .

t) genera . provlslons.

It underscored democracy and stressed that justice freedom and equality are the

mainstays of society and cooperation and mutual compassion are inextricable iies

binding the citizens. Also emphasised was the fact that the system of government

should be based on separation of powers, though maintaining cooperation between

them according to the provisions of the Constitution.

Bodies of the executive power expanded greatly in proportion to the tasks. It

included the cabinet, ministries, hi«er councils, public entities and insiitutions,

together with decentralised administrative bodies which included municipalities and

provincial councils.

Pronnces, which increased to five are the most important administraiive divisions

in Kuwait as they handle all matters relating to the units they represent) cater for

group and individual interestsu while aisSing local bodies m caxTying out their fimciions.

Provincial Councils are formed of senior officials and men of experience in the fields of

health, educaton culture, economy and industry.

The ProvinciaI Council represents the governorate) expresses its will and works for

its interests. No member of the Provincial Council is to be member of the Parliament

simultaneously; acceptance of membership in provincial or municipal councils means

automatic resignation from the parliarnent.

Higher Councils, on the other hand, are formed on the highest levels of experience

and efficiency to conduct the necessary studies to draw the State's plan in the respective

sectors. Higher councils also submit proposals to the cabinet to take the appropriate

decision, being also support bodies to the cabinet through their recommendations and

on formulation of state policy and follow up of its implementaiion.

Regarding the legislaiiere posver, the Kuwaiti constituiion stipulated that the parliament

is made up of 50 members elected through general direct secret ballot according to the

organisation set forth in the Election Law. The constitution also considered the

appointed ministers as essffice members of the parliament and stressed that no law is

to be issued without being approved by the parliament and endorsed by the Emir; the

legislaiive power, according to the consiitutjion, being represented by the Emir and the

parliament collectively. The Consiituiion of Kuwait defined the subjects that can only

be regulated by a law and left others for the discretion of the parliament, which has the

right to issue relevant laws or leave the matter to the executive power.

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274 ARAB LAW QU ARTERLY

B. Dissolution of Parliament in 1976

ASer 14 years of parliamentary praciices, some elements started to abuse democracy

for personal interests without any effort towards the aspired construciion. Hence, the

Emir addressed the nation on 29 August 1976, accouncing the dissoluiion of the Par-

liament with a decree to this effect whereby the terms of reference of tthe parliament

were transferred to the cabinet.

The legislauve power, consequently, was now in the hands ofthe Emir and the cabinet.

The decree stipulated that an ad hoc cottee should be fonned to review the consti-

tuiion. Members of the committee were named by a general decree in 1980 and the

committee finalised its mission on 22 June 1980.

A decree was issued on 23 February 1981, calling the electorate tO vote on a new

parliament. The parliament was, therefore, re-formed and reariewed all laws by the

goverent issued during the period when it had been dissolved. The new parliament

approved all? save some minor amendments to de Kuwait Municipality Law.

The Government presented the amendments approved by the ad hoc committee to

the parliament which in turn, voiced unwillinpess to give approval to these amend-

ments. The Government, out of wisdom and consideration for the will of the people's

representative, withdrew its motion.

C. Dissolution of the Parliament in L986

Parliamentary life coniinued for 10 years in the hope of avoiding any other crisis. Yet,

the country was exposed to harsh conditions in that period when vicious external

conspiracies wove their web over the security of the country, threatening lives and

even making a sinfill assassination attempt on the life ofthe Emir. The naiion's wealth

and source of income was threatened. The war ragxng between neighbouring Iran and

Iraq almost reached Kuwati borders, while the country was also facing a severe economic

cnsis. The Enlir noiiced that instead of conceriing efforts to contain the crisis, the country

was divided and blocs emerged causing national disunion, hampering business and

cnppling utilities, and that the cabinet was incapable of carrying out its duiies. The

Emir, therefore, issued a decree on 3 July 1986 dissolving the parliarnent and transfeNg

its consiituiional terms of reference to the E and cabinet.

D. Establishment of the National Council

People's pariicipaiion and consultaiion are values implanted in the minds of the

Kuwaiii people. Accordingly, the Government held early in 1990 a free dialope where

all brackets of people took part. Following the dialogue, a decree was issued in April

1990 stipulaiing the formaiion of a 75-member National Council, out of which 50

members were elected thugh general direct secret ballot in accordance with a relevant

law. The 25 other members were to be chosen by the E fiom among experienced

and efficient men, which included a number of ministers. The National Council was

accorded legislaiive and supervisory capacities. Yet, it could not carry out these

responsibilities as a result of the Iraqi invasion of Kuwait on 2 August 1990.

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275 LEGAL AND JUDICIAL SYSTEM IN KUWAIT

Following liberaion, however, a decree was issued by the Emir calling the Council

to convene on 9 July 1991. Another decree called for elections of the Parliament, which had been dissolved in 1976, stariing October 1992. The decree also supulated

dissolution of the present Council as soon as the parliament convenes.

3. DEVELOPMENT OF LEGISLATION

The need to revise Legislation

Since legislation is man-made, it is in constant need of completion, adjustment and

amendment due to the loopholes that need to be covered when discovered. Upon the

application of a legislation, it may appear to be incompatible with some cases for which it was originally created; hence it requires adjustment or amendment. In addiiion to

covering the gaps and fillfilling the purposes of adjustment, the need for development

behaves amending legislations. Kuwait is characterised by an active lepslative policy

permanently seeking to cover gaps and develop legislaiions to meet the needs and requirements of society, as evidenced by Ruwaiti lepslatons since the times of

codificaiion. The development of legislaiions was most prominent when the parliament was dissolved in 1976.

A Revising Legislation in 1977

The legal status in terms of legislaiioIls applied on the various aspects of life in Kuwait

was based on:

(a) The aforementioned Magazine of hdicial Prostsions, in the fields that remained without lepslaiion even aRer issuing many laws that covered various cases pre-

viously handled by the Magazine.

(b) Other laws such as the Commercial Law, law of torts, Government and Private

Labour Law and others previously mentoned. (c) The school of Imam Malik in cases of personal statutes.

(d) We must note that the Constitution was issued in 1962, consequently calling for

the revision and reconsideration of legislations in 'sa" and "b" so as to eliminate the irregularity among some legislation.

The cabinet as a result decided on 19 February 1977 to form committees entrusted

with:

(1) Drafting new legislations to govern cases not regulated by the Kuwaiti legislator.

(2) Developing and siEcing standing legislaiions in the light of needs revealed on appli- .

catlon.

The decision conditioned the comttees to base legislation on provisions of the Islamic ShariX (law) and in conforrnity with the status and traditions of Kuwait.

Revision of legislations led to several new Iaws, foremost of which was:

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276 ARAB LAW QUARTERLY

(1) The Civil Code issued by Decree-Law No. 67 of 1980 in almost 1,100 ariicles.

Kuwait for the first time had a filll record of civil code on the highest level of prF

visions conforming to the provisions of Islamic jurisprudence, while drawing on

the magnificent progress of modern legal thought as far as the art and methods of

legislahon are concerned.

(2) The Law of Personal Statutes issued by Law No. 51 of 1984 inclusive of all per-

sonal statute questions that are derived from the Islamic Shan'a. Hence, the two

corners of the private law were completed in financial regulation and personal

statutes.

(3) Commercial Law, issued by Decree-Law No. 68 of 1980 dealing with an aspect of

civil life, i.e. trade.

(4) Maritime Trade Law, issued by Decree-Law No. 28 of 1980 as a new link in the

chain of maritime legislation developments in Kuwait, which had started with the

Diving and Travel Law in 1940.

(5) Civil Procedure Code No. 38 of 1980 complementing legislative organisation of

civil and commercial affairs.

(6) Proof Law, issued by Decree-Law No. 39 of 1980.

(7) Experiise Law issued by Decree-Law No. 40 of 1980.

In all laws, comprehensive sifting of provisions are carelillly observed, with a special

emphasis on choosing solutions that are most suitable to the conditions and customs of

the country to keep legislative developments in the service of society.

B. Legislation and the Securities Market Crisis in 1982

Kuwait was exposed to a shaxp crisis in 1982 as a result of dealings in deferred coxporate

shares. Many engaged in these dealinp with a spirit of adventure for fast profits, heedless

of the consequences and without sound assessment of the outcome of those dealings

for themselves, or the national economy. It was later revealed that a large number had

fallen in the trap and halted payments of the debts they were involved in; claims were

so widely intermingled that they included many dealers.

Such an unnatural crisis could only be solved by emergency solutions imposed by

the State through legislation to safeguard the securities market and citizen's funds.

Consequently, Decre>Law No. 57 of 1982 was issued on dealings in deferred coxporate

shares, necessitating the registration of such dealings for precise reference and defini-

tion of the volume and dimensions of the problem. The Decree-Law also stipulated

that an arbitration panel be formed to be exclusively competent to settle disputes

resulting from such dealings.

The Decree-Law was issued on 20 September 1982 during Parliament recess in

accordance with Article 71 of the consetution which permits the Emir to issue decrees

with the power of laws in urgent cases where immediate action is required between

parliamentary sessions. And since the constitution stipulated that such decrees be pre-

sented to the parliament within the 15 days following issuance another decree law was

issued on the same day inviting the council to convene on 5 October 1982.

The parliament issued Law No. 59 of 1982 reiterating the major provisions included

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277 LEGAL AND JUDICIAL SYSTEM IN KUWAIT

in the Decree-Law in addiiion to the establishment of a fimd to guarantee the rights of

debtors incurred by such dealings.

The State continued to follow up the steps to solve the crises and issued Law No. 75

of 1983 on 20 April regulaiing dealings in deferred corporate shares. The innovaiive

legislations included in the law express the progress in Kuwaiti legislation and the way

it creates solutions to face emergency cases for the public interest. Provisions of the

law set forth appropriate means to repay creditors of the bankrupt dealers involved in

the crisis, without waiting for the liquidation of debt to get back some of their funds.

The measure saved debtors by providing them with part of the liquidity to avert their

subsequent bankruptcy.

The legislaton also laid down a system to evaluate each bankrupt on a temporary

basis before the conclusion of the lengthy liquidaiion procedure to disengage creditors

and the debtors. It also simplified, hence speeded up, procedures of bankruptcy to

minimise cases of bankIllptcy as much as possible. An independent neutral body was

entrusted with the process to avoid disruption of naiional economy as a result of a sudden

dumping of the market with the property of the bankrupt.

Provisions of the legislation tightened control over the crisis, contained its repercus-

sions, and highlighted the authority of legalisation in codifying practical solutions for

emergencies.