Kuwait Court of Cassation principle number 320

Summary: - Establishment of a judicial body specialising in capital markets activity. Its purpose. Facilitating and simplifying the resolution of disputes arising in connection with the application of the provisions of Law 7/2010 establishing the Capital Market Authority and regulating securities activity. The provisions contained therein are provisions of a special law. It must be applied to the exclusion of any other special or general law. - Establishment of the Capital Markets Court within the Court of First Instance. Its inclusion of non-criminal circuits. Their exclusive jurisdiction to decide commercial, civil and administrative disputes and substantive enforcement disputes relating to judgments issued by them, irrespective of the value of the dispute. Non-criminal circuits must, of their own motion, refer pending actions that have become within that Court’s jurisdiction. The exception. Its cases. - Establishment that the action seeks compensation for the respondent company’s fault consisting in its failure to disclose share-trading information and financial information, causing the delisting of the appellant’s shares from the Kuwait Stock Exchange, as well as a reduction in the number and value of the shares. Its implication. The dispute relates to shares. The Capital Markets Court has jurisdiction to hear it. The challenged judgment’s departure from this and its proceeding to consider the merits. A defect requiring its cassation. Rule: The provision in Article (2) of Law No. 7 of 2010 concerning the establishment of the Capital Markets Authority and the regulation of securities activity, published in the Official Gazette, issue No. 964 on 28/2/2010, that: “... An independent public authority having legal personality shall be established, supervised by the Minister of Commerce and Industry, and called the (Capital Market Authority)”; and in Article (3) of the same Law: “The Authority shall aim to achieve the following: (1)- Regulating securities activity in a manner characterised by fairness, competitiveness and transparency (2) ...... (3) ........... (4) ......... (5) ........ (6) Working to ensure compliance with laws and regulations relating to securities activity”; and in Article (108): “A court called the Capital Markets Court shall be established within the Court of First Instance. Its seat shall be determined by a decision of the Minister of Justice with the approval of the Supreme Judicial Council. This Court shall consist of the following: (1) 0000 (2) Non-criminal circuits having exclusive jurisdiction to decide non-criminal actions relating to commercial, civil and administrative disputes arising from the application of the provisions of this Law and the systems and regulations specific to the securities market, and substantive enforcement disputes relating to judgments issued by them, irrespective of the value of these disputes, ...”; and in Article 116 that: “The non-criminal circuits of the Court of First Instance shall, of their own motion, refer actions pending before them which have become within the jurisdiction of the Capital Market Court pursuant to the provisions of this Law to the latter Court, in their existing state .... The provisions of the preceding paragraph shall not apply to actions in which a part of the merits has been adjudicated, actions in which an incidental judgment has been issued concerning a part of the litigation, and actions in which a decision has been issued adjourning them for pronouncement of judgment, even with permission to submit memoranda ...”, indicate—as stated in the Law’s explanatory memorandum—that a judicial body specialising in capital markets activity was established to facilitate and simplify the resolution of disputes arising in connection with the application of the provisions of this Law. This Law was careful to repeal any provision conflicting with its provisions, whatever the subject matter of that provision, in recognition that its provisions are those of a special law concerning capital markets which, in its application, supersedes any other special or general law. That being so, and whereas the aforementioned Law established within the Court of First Instance a court called the “Capital Markets Court,” containing non-criminal circuits whose exclusive jurisdiction it prescribed to decide commercial, civil and administrative disputes arising from the application of its provisions and the systems and regulations specific to the securities market, and substantive enforcement disputes relating to judgments issued by them, irrespective of the value of these disputes; and the Law required the non-criminal circuits of the Court of First Instance, of their own motion, to refer pending actions which have become within the jurisdiction of the Capital Market Court pursuant to the provisions of this Law, except those actions excluded by the legislature in which part of the merits has been adjudicated, or an incidental judgment has been issued concerning part of the litigation, or a decision has been issued adjourning them for pronouncement of judgment, even with permission to submit memoranda. In view of the foregoing, and whereas it is established from the papers that the appellant brought his action—whose scope was defined in terms of subject matter and cause—seeking a judgment against the respondent company requiring it to pay compensation for material and moral damage suffered by him as a result of what he stated to be its fault in failing to disclose share-trading information and financial information, which caused the delisting of its shares from the Kuwait Stock Exchange as a result of its failure to submit those data, which it repeatedly failed to do, in addition to the reduction in the number and value of his shares, thereby causing him material and moral damage for which he seeks compensation in the amounts he estimated, the dispute, as such, relates to shares and consequently falls within the jurisdiction of the aforementioned Court. Since the challenged judgment departed from this view and addressed the merits of the action, it is defective, requiring its cassation without any need to examine the remaining grounds of appeal.