Kuwait Court of Cassation principle number 2453

Issuance of a judgment declaring bankruptcy. Its effect. Article 597 of the Commercial Code. - Secured creditors holding mortgages or pledges and holders of special preferential rights may bring or continue actions against the bankruptcy trustee, and may enforce or continue enforcement against the assets securing their rights. A governmental entity that is a creditor for sums due to the public treasury has the same right to bring and continue actions for those sums against the bankruptcy trustee. The reason therefor. Its priority in rank over holders of special preferential rights and secured creditors holding mortgages or pledges. Articles 1063 and 1072 of the Civil Code. The challenged judgment's departure from this view and its affirmation of the first-instance judgment staying the ancillary action brought by the governmental creditor entity to claim its dues, despite joinder of the bankruptcy trustee. Renders it defective and requires its cassation in respect of the ancillary action.