Kuwait Court of Cassation principle number 2387

Issuance of a judgment declaring bankruptcy. Its effect. Article 597 of the Commercial Code. - Secured creditors holding pledges or mortgages and holders of special preferential rights may bring or continue actions against the bankruptcy administrator, and may execute or continue execution against the assets securing their rights. A government authority that is a creditor for amounts due to the public treasury has the same right to bring and continue actions for them against the bankruptcy administrator. The reason therefor. Its priority in rank over holders of special preferential rights and secured creditors holding pledges or mortgages. Articles 1063, 1072, Civil Code. The challenged judgment’s departure from this view and its affirmance of the first-instance judgment staying the incidental action brought by the government creditor authority to claim its dues despite the joinder of the bankruptcy administrator. This vitiates it and requires its cassation in respect of the incidental action.