Kuwait Court of Cassation principle number 552

Summary: - Sports bodies. Their meaning. Article 1 of Decree-Law 42/1987 concerning sports bodies. - Establishment of a company. Its purpose is to contribute a share of property or work to share 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 establishing 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 ruling on sound reasons with an established basis in the case papers and sufficient to support it. - Establishment that the appellant is a commercial limited liability company whose purpose is to make a profit. Its import: 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, considering it dissolved unless it ceased its activity and that it may not conduct sports activities within Kuwait, and considering the respondent club alone to be 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 appellant’s name 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 that: “For the application of the provisions of this Law, sports bodies mean sports bodies established pursuant to its provisions by natural or legal persons for an indefinite 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 includes sports clubs, sports federations 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 under which two or more persons undertake, each contributing to a venture aimed at making a profit by contributing his share of property or work, to share the profit or loss resulting from that venture.” This means that the legislature, in the second law, aimed at making a profit by contributing a share of property or work to share the profit or loss resulting from that venture, and that the legislature, in the first law, in defining sports bodies, aimed at providing the services it enumerated without material gain for their members, whereas the purpose in the second is to achieve a profit or loss. Although the trial court has the power to assess the existence or absence of deceptive similarity between trade names, this is conditional upon its basing its ruling on sound reasons with an established basis in the case 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 limited liability company under the licence issued to it by the Ministry of Commerce and Industry, No. 4191/1973, dated 2/2/2011, under the name Club ...... Company, whose purpose 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. The challenged judgment departed from this view, applied that law to it, considered it dissolved since it had not ceased its activity, and concluded in its reasons that it may not conduct sports activities within Kuwait, although that law did not so provide. It considered that, by virtue of the registration of the first respondent club under the aforementioned law and the letter of the Public Authority for Youth and Sports dated 30/11/2005, 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 car rally competitions and representing the State in all international forums. It ruled that the club alone was entitled to organize motor sport as the sole entity entrusted with doing so, ordered the sixth respondent to cease 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 having submitted any evidence of confusion between the name of the appellant and that of the club represented by the first respondent. It is therefore defective in a manner requiring its partial cassation in this respect.