Kuwait Court of Cassation principle number 353

Summary: - The doctrine of unforeseen circumstances. Its application by the court. A discretionary power intended to reduce the obligation to a reasonable level by narrowing its scope or increasing its counter-performance. Judicial intervention to reduce the obligation to a reasonable level. Its condition. Hardship threatening exorbitant loss. The criterion thereof. Objective considerations only, not circumstances connected with the debtor personally. Rule: The provision of Article – 198 of the Civil Code on the basis that the court should have applied the doctrine of unforeseen circumstances and reduced the obligation to a reasonable level by narrowing its scope or increasing its counter-performance on the occasion of the emergence of the financial crisis that struck the countries of the world, including the State of Kuwait and the appellant company, during the period between commencement of performance of the contract and before completion of its performance, as it led to a reduction in its financial liquidity and its inability to fulfil its financial obligations; for judicial intervention to reduce the obligation to a reasonable level is a discretionary power whose exercise requires the fulfilment of certain conditions, the most important being hardship threatening exorbitant loss. The criterion for this hardship is objective considerations, not circumstances relating to the debtor personally – and whereas the appellant attributed the damage it sustained to its own personal circumstances and not to objective considerations concerning the relationship in dispute, the appeal has been brought lacking its legal and factual foundation, requiring a judgment dismissing it and upholding the judgment appealed against in the manner to be set out in the operative part.