Kuwait Court of Cassation principle number 2467

Expiry of the lease contract. Its effect. Buildings or plantings made by the lessee on the leased property are inevitably destined for severance. The condition for this. Article 598 of the Civil Code. - Amendment of the company contract and conversion of its legal entity into a limited liability company. Inclusion in the contract of a grant to its manager of broad powers and authority to conclude contracts, agreements and transactions relating to the company’s dealings. Establishment that the prohibition imposed on him is confined to not selling or mortgaging the company’s immovable property, giving guarantees or contracting loans without a collective resolution of the partners. His assignment of a contract for exploitation of an industrial plot, together with the buildings thereon and the movables it contains, in exchange for another company’s waiver of a debt owed to it by his company, and the State’s approval of the assignment. Its implication. Expiry of this contract and the structures erected on the plot becoming inevitably destined for severance and being deemed movables by anticipation, disposition of which falls within the manager’s powers. The challenged judgment’s conclusion that his disposition entails a sale of immovable property without a collective resolution - 455 - Obligation of the partners, contrary to the prohibition contained in the contract, and its consequent holding that the disposition is void. Error in applying the law and defective inference.