Kuwait Court of Cassation principle number 336

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 enforce or continue enforcement against the assets securing their rights. A government 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 administrator. The reason therefor: its priority in rank over holders of special preferential rights and secured creditors holding pledges or mortgages. 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 incidental action brought by the creditor government entity to claim its dues despite the joinder of the bankruptcy administrator. This renders it defective and requires its cassation in respect of the incidental action.