Kuwait Court of Cassation principle number 2673

A joint-stock company. Its board of directors is competent to manage it. The consequence thereof. The chairman of the board of directors and the other members are agents of the board of directors and of the general meeting of shareholders. The effect thereof. This company is not bound towards third parties by acts and dispositions undertaken by the chairman of the board of directors unless they fall within his competence under the company's memorandum and articles of association. The exception. Fulfilment of the conditions of apparent agency or ratification of these acts by the general meeting in accordance with the law. Example of a chairman of a board of directors concluding an arbitration agreement while his powers, under the provisions of the law and the company's articles of association, authorize him only to undertake acts of management, and the absence of apparent agency in his case, which led to the arbitration clause being unenforceable against the company because it fell outside the actual and apparent representative authority of its signatory and because the company did not ratify this disposition.