Kuwait Court of Cassation principle number 324

Summary: - The provisions of the Companies Law. Intended to achieve a public economic interest. Their relation to public policy. Consequence thereof. Although the effects of a transaction concluded under the old Companies Law are, in principle, subject to the law under which it was concluded, since Decree-Law 25 of 2012 concerning Companies(*) overtook them before they were determined by a final judgment, it applies to them. - Enactment of Companies Law No. 25 of 2012, including its provision for the lapse of all terms of debts owed by the company if it is dissolved. Consequence thereof. The lapse of all debts owed by the respondent company, whose dissolution and liquidation were ordered, including the loan in dispute, which was agreed to be repaid from its profits after their realization, so that it becomes due for repayment. Departure from this and a ruling that the action is inadmissible for having been brought prematurely. An error rendering the judgment defective and necessitating its cassation. Rule: It is established that although the provisions of the Companies Law concern individuals, they were intended to achieve a public economic interest relating to the higher order of society and prevailing over the interests of individuals, consisting in their representing the economic entity of the State and their collapse leading to impairment of and impact upon it. Although the transaction in dispute was concluded under the old Companies Law and its effects are, in principle, subject to the law under which it was concluded, since the rules of the Companies Law pertain to public policy as stated above, Decree-Law No. 25 of 2012 concerning Companies, published on 29/11/2012, applies to the present action, having overtaken it before its determination by a final judgment. The effect of Article 310 of the aforementioned Decree is that all terms of debts owed by the respondent company lapse, its dissolution and liquidation having been ordered by the judgment rendered in Commercial Appeal No. 1526 of 2011, including the loan in dispute, which was agreed to be repaid from its profits after their realization. Accordingly, this debt—amounting to 185000 dinars pursuant to the assignment of right issued by the person named ........ - the appellant – has become due and must be repaid. Since the challenged judgment departed from this view and ruled the action inadmissible for having been brought prematurely, it is defective, necessitating its cassation.