Kuwait Court of Cassation principle number 331

Summary: - Sports bodies. Their meaning. Article 1 of Decree-Law 42/1987 concerning Sports Bodies. - Formation of a company. Its purpose is to contribute a share of money or work in order to divide the resulting profit or loss. Article 1/2 of Decree-Law 25/2012 promulgating the Companies Law. - Sports bodies aim to provide sports services and related cultural, social, spiritual, and health services without material gain for their members. This differs from the purpose of forming a company, which is to share profit and loss. - Deceptive similarity between trade names. Assessment of its existence or absence is for the trial court, provided it bases its judgment on reasonable grounds having an established basis in the papers and sufficient to support it. - Establishment that the appellant is a limited liability commercial company whose objective is to make a profit. Its consequence: it is not considered a sports body. Its effect: Law 42 of 1978 concerning Sports Bodies does not apply to it. The challenged judgment’s departure from this view, considering it dissolved unless it ceases its activity and prohibited from conducting sports activities within Kuwait, and considering the respondent club alone entrusted with representing Kuwait in the International Automobile Federation, although the appellant company holds membership in the Federation and is entitled to represent the State in all international forums, and the judgment requiring it to add the expression “company” to its printed materials despite the absence of confusion between the name of the appellant and the respondent club. This vitiates the judgment and requires its cassation. Rule: Article 1 of Decree-Law No. 42/1978 concerning Sports Bodies provides: “For the purposes of applying the provisions of this Law, sports bodies means sports bodies established pursuant to its provisions by natural or legal persons for a non-concerned period, with the aim of providing sports services and related cultural, social, spiritual, health, and exercise services, without obtaining material gain for members. This designation encompasses sports clubs, the federation of sports games, and the Olympic Committee.” The first paragraph of Article 2 of Decree-Law No. 25 of 2012 promulgating the Companies Law provides: “A company shall be formed by a contract under which 2 or more persons undertake, each contributing to a project intended to make a profit by providing his share of money or work, to divide the profit or loss arising from that project.” This means that the legislature, in the second Law, aimed at making a profit by contributing a share of money or work in order to divide the profit or loss arising from that project, and that the legislature in the first Law, when defining sports bodies, aimed at providing the services it enumerated without material gain for their members, whereas the purpose in the second is to make a profit or loss. Although the trial court has authority to assess the existence or absence of deceptive similarity between trade names, this is conditional on its basing its judgment on reasonable grounds having an established basis in the papers and sufficient to support it. It is established in the papers, and undisputed by both parties to the litigation, that the appellant is a limited liability commercial company pursuant to the licence issued to it by the Ministry of Commerce and Industry, No. 4191/1973, dated 2/2/2011, under the name of ...... Club Company, whose objective is to make a profit. It is therefore not a sports body, and Law No. 42/1978 concerning Sports Bodies does not apply to it. Since the challenged judgment departed from this view, applied that Law to it, and considered it dissolved because it had not ceased its activity, and concluded in its grounds that it may not conduct sports activities within Kuwait, although that Law did not so provide, and considered that the registration of the first respondent club pursuant to the aforementioned Law and the letter of the Public Authority for Youth and Sports dated 30/11/2005 meant that it alone, to the exclusion of all others, was entrusted with organizing it, although the appellant, as previously stated, holds membership in the International Automobile Federation and is the representative of the State of Kuwait in organizing motor rally competitions and representing the State in all international forums; and ruled that it alone was entitled to organize motor sport in its capacity as the sole entity entrusted with doing so, and ordered the sixth respondent to stop the appellant’s motor sport activity, and required it to add the word “company” to its printed materials, correspondence, and all its papers in accordance with the licence issued to it, without the aforementioned respondents submitting any evidence of confusion between the names of the appellant and the club represented by the first respondent, it is vitiated in a manner requiring its partial cassation in this respect.