Kuwait Court of Cassation principle number 408

Summary: - Deceptive similarity between trade names. Assessment of its existence or absence is for the court of merits, provided that it bases its judgment on sound reasons having an established basis in the papers and sufficient to support it. - Establishment that the appellant is a commercial limited liability company whose objective is to make a profit. Its implication: it is not considered a sports organization. Its effect: Law 42 of 1978 concerning Sports Organizations does not apply to it. The challenged judgment's departure from this, its treatment of it as dissolved unless it ceases its activity and as not permitted to conduct sporting activities within Kuwait, and its treatment of the respondent club as the sole entity 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's requirement that it add the expression “company” to its printed materials despite the absence of confusion between the appellant's name and the respondent club. This renders the judgment defective and requires its cassation. Rule: Article 1 of Decree-Law No. 42/1978 concerning Sports Organizations provides that: “For the purposes of applying the provisions of this Law, sports organizations mean sports organizations established pursuant to its provisions by natural or legal persons for an unspecified period with the objective of providing sporting services and related cultural, social, spiritual, health and exercise services, without obtaining material gain for members. This designation includes sports clubs, the federation of sporting games and the Olympic Committee.” The first paragraph of Article 2 of Decree-Law No. 25 of 2012 promulgating the Companies Law provides that: “A company shall be established by a contract whereby 2 or more persons undertake, each contributing to a venture intended to make a profit by providing his share of money or work, to share the profit or loss arising from that venture.” This means that, in the second law, the legislature sought the making of a profit through the provision of a share of money or work to share the profit or loss arising from that venture, and that, in the first law, the legislature, in defining sports organizations, sought the provision of the services it enumerated without material gain for their members, whereas the purpose in the second is to achieve profit or loss. Although the court of merits has authority to assess whether deceptive similarity between trade names exists or does not exist, this is subject to the condition that it base its judgment on sound reasons having an established basis in the papers and sufficient to support it. It is established from the papers—and is not disputed by either party to the proceedings—that the appellant is a commercial company under the license issued to it by the Ministry of Commerce and Industry, No. 4191/1973, dated 2/2/2011, with limited liability, under the name Club ...... Company, whose objective is to make a profit. It is therefore not a sports organization, and Law No. 42/1978 concerning Sports Organizations does not apply to it. Since the challenged judgment departed from this view, applied that Law to it, treated it as dissolved because it had not ceased its activity, and concluded in its reasons that it was not permitted to conduct sporting activities within Kuwait, although that Law did not so provide; and treated 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 as meaning that it alone—to the exclusion of any other—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 car rally competitions and representing the State in all international forums; and ruled that it alone was entitled to organize motor sport as the sole entity entrusted with doing so, and ordered the sixth respondent to suspend the appellant's activity in motor sport, and required it to add the word—company—to its printed materials, correspondence and all its papers in accordance with the license issued to it, without the aforementioned respondents providing any evidence of confusion between the name of the appellant and that of the club represented by the first respondent, it is defective in a manner requiring its partial cassation in this respect.