Kuwait Court of Cassation principle number 28

Summary: - A settlement agreement under the Ja‘fari school—applicable to the facts—is inherently binding and is not rescinded except by the settling parties’ mutual consent to rescission or by rescission by the party granted that right under the settlement. Its necessary consequence: the binding agreement and the conditions stipulated therein must be fulfilled. Its condition: the agreement must remain in force. Its effect: performance in accordance with its provisions and in a manner consistent with good faith and honourable dealing. The agreement is equivalent to law for its parties. The condition for this. - A party’s reliance on a material defence—application of the settlement agreement—and the court’s disregard thereof. Inadequacy of reasons. Rule: It is established in this Court’s jurisprudence that, under Ja‘fari jurisprudence, which applies to the facts of the dispute, a settlement agreement is inherently binding and is not rescinded except by the settling parties’ mutual consent to rescission or by rescission by the party granted that right under the settlement. It necessarily follows that the binding agreement and the condition stipulated therein must be fulfilled so long as the agreement remains in force. It must therefore be performed in accordance with its provisions and in a manner consistent with good faith and honourable dealing, since an agreement, according to settled judicial rulings, is equivalent to law for its parties so long as it does not make lawful what is forbidden, forbid what is lawful, or contravene public policy and morals in society. Whenever a party relies on a material defence, namely a defence which, if valid, would change the outcome of the case, the court must address and examine it by every means capable of leading it to the truth and respond to it with reasons sufficient to support its ruling; otherwise, its judgment is inadequately reasoned.