Kuwait Court of Cassation principle number 1318

The challenged judgment's reversal of the appealed judgment declaring the bankruptcy of the company and its joint and several guarantor, and approval of a composition preventing bankruptcy in respect of the guarantor, on the grounds that the company paid the equivalent of the immediate cash settlement amount, that the Kuwait Investment Authority did not object to entering into a composition preventing bankruptcy with the guarantor, and that the Authority's interest in declaring the company's bankruptcy was not commensurate with the latter's interest. An error in applying the law. The reason therefor. It adopted a meaning of cessation of payment different from that established by Law 41 of 1993 and contrary to its provisions prescribing that the Kuwait Investment Authority may not conduct cash settlement operations for debts or reschedule them outside the framework of that Law. To hold otherwise would place a debtor who ceases payment until after the prescribed deadlines in a better position than one who delays for a limited period permitted by law.