Article 1 of Bankruptcy Law

In applying the provisions of this Law, the following words and expressions shall have the meaning indicated opposite each: Ministry: Ministry of Commerce and Industry. Minister: Ministry of Commerce and Industry. Authority: Capital Markets Authority. Central Bank: Central Bank of Kuwait. Unit: Insurance Unit Regulatory body: The Central Bank, the Authority, the Ministry or the Unit, each within the limits of the entities subject to its supervision. Preventive settlement: Proceedings aimed at an agreement between the debtor and its creditors on a preventive settlement proposal in accordance with the provisions of this Law. Restructuring: Proceedings aimed at an agreement between the debtor and its creditors on a restructuring plan, with the assistance of the restructuring trustee and under the supervision of the Bankruptcy Judge in accordance with the provisions of the Law. Bankruptcy: Proceedings aimed at a collective settlement of the debtor’s debts towards its creditors through liquidation of its assets and business and distribution of the liquidation proceeds to its creditors, all in accordance with the provisions of this Law. (1) Amended by Decree-Law No. 58 of 2025 Law Index 1382 Home Page Bankruptcy Law Law No. 71 of 2020 Promulgating the Bankruptcy Law Composition: A composition concerning indebtedness after the issuance of a final judgment declaring the debtor bankrupt. Application: An application submitted by interested parties to commence preventive settlement or restructuring proceedings or to declare bankruptcy—as the case may be—in accordance with the Law. Trustee: A person licensed by the Authority or registered with it in the register of auditors who performs the duties specified in this Law. Monitor: A person licensed to perform the work of a trustee who monitors the implementation of preventive settlement, restructuring and bankruptcy declaration proceedings through the information received from the debtor or the trustee and the creditors. Inspector: A person licensed to perform the work of a trustee who inspects all the debtor’s business and records or inspects specific transactions or events and submits a report on them. Debtor’s assets: Movable and immovable assets owned by the debtor, all financial rights due from third parties, whether immediately payable or deferred, rights attaching to any of them, and anything else that may have present or future financial value. The debtor’s assets do not include assets that may not be attached under the Law. Debtor’s business: The commercial activities carried on by the debtor. Viability of the debtor’s business: The debtor’s business shall be viable if the debtor submits a technical report issued by one of the persons who may perform the duties of trustees under this Law, containing an indication that the following is likely: (1) That the debtor will be able to continue paying its debts that will be subject to preventive settlement or restructuring in the ordinary course of carrying on its business. 2) That approval of the preventive settlement or restructuring proposal will result in the debtor’s business returning to profitability. Debtor’s debts: Debts owed by the debtor on the date of issuance of the decision to commence proceedings under the provisions of this Law, or those arising from an obligation incurred by it before the issuance of the aforementioned decision. Cessation of payment: Failure to pay any debt due for payment after one week has elapsed following notice to the debtor, even if the debtor’s assets are sufficient to pay its debts, and even if the unpaid debt is secured by security sufficient to pay it. Financial deficit: The debtor’s assets being insufficient to pay its debts. Conservatory measures: Measures taken by the Bankruptcy Court or Judge under the provisions of this Law for the purpose of preserving and managing the debtor’s assets or the assets of the bankruptcy estate and preventing their concealment, including placing seals on the debtor’s business premises, appointing an interim trustee to manage its assets, imposing restrictions on the debtor or any party related to the debtor in disposing of its assets, or prohibiting the debtor and any members of its board of directors or its managers, or members of the board of directors or managers of any company related to the debtor, from travelling for a specified period or until a specified event occurs. Stay of claims: A stay of any action or enforcement proceeding brought against the debtor whenever it relates to its assets or debts, including the exercise by secured creditors of any right accorded to them Law Index 1383 Home Page Bankruptcy Law Law No. 71 of 2020 Promulgating the Bankruptcy Law to acquire ownership of the pledged property or sell it without following compulsory enforcement procedures. It also includes any other applications submitted to commence proceedings under this Law, with the exception of labour actions and personal status actions other than estate actions. Approval of the preventive settlement or restructuring proposal will result in the debtor’s business returning to profitability. Insider: A person privy to undisclosed information connected with the debtor’s business, assets, person, financial position or management, which has an effect on its assets, liabilities or financial situation, the general course of its business or its ability to fulfil its obligations, and members of the board of directors and the administrative apparatus at the