Kuwait Court of Cassation principle number 146

Summary: - The Fund for Addressing the Circumstances of Citizens in Default on Repayment of Consumer and Instalment Loans. Its affiliation with the Ministry of Finance and its financing from the State’s general reserve. Repayment of those loans through the managing bank—which is the bank owed the largest amount of indebtedness—scheduling the customer’s total indebtedness in light of his distressed financial position. Its repayment, or that of part thereof, through an interest-free loan granted by the Fund, provided that this loan is repaid after his indebtedness outstanding on 31/12/2009 to the creditor entities. The purpose thereof: broadening the base of beneficiaries who are in default on repayment of a consumer or instalment loan from banks or companies affiliated with the Central Bank. Those who work for the entity that lent to them and those who do not work for it are equal in this regard. The reason: Law 51 of 2010 is a general law addressing the circumstances of defaulters. Rule: It is apparent from examining the provisions of Law No. 51 of 2010—establishing a fund to address the circumstances of citizens in default on repayment of consumer and instalment loans owed to banks and investment companies—that the legislature established this Fund, placed its affiliation and administration under the Ministry of Finance, provided for its financing from the State’s general reserve, and regulated a mechanism through which it enabled “all” defaulting citizens to repay their consumer and instalment loans granted to them by banks and investment companies subject to the Central Bank. This is done by the managing bank, “the creditor owed the largest amount of indebtedness,” scheduling the customer’s total indebtedness in light of his distressed financial position, and its repayment, or that of part thereof, through an interest-free loan granted to him by this Fund, provided that this loan is repaid after his indebtedness outstanding on 31/12/2009 to the creditor entities. The objective sought by the legislature through this Law—as stated in its Explanatory Memorandum—is to extend the benefit generally and broaden the base of beneficiaries of its provisions, namely everyone who has defaulted on repayment of a consumer or instalment loan from banks or investment companies, those who work for the entity that lent to them and those who have not worked for it. It is therefore a general law by which the legislature addressed the circumstances of citizens in default on repayment of their debts to entities subject to the Central Bank.