Kuwait Court of Cassation principle number 64

Summary: - Establishment of a judicial body specializing in capital markets activity. Its purpose: to facilitate and simplify the resolution of disputes arising in connection with the application of Law 7/2010 establishing the Capital Market Authority and regulating securities activity. The provisions stipulated therein are provisions of a special law. It must be applied to the exclusion of any other special or general law. - Establishment of the Capital Markets Court within the Court of First Instance. Its inclusion of non-criminal circuits. Their exclusive jurisdiction to adjudicate commercial, civil, and administrative disputes and substantive enforcement disputes relating to judgments issued by them, irrespective of the value of the dispute. Non-criminal circuits must, of their own motion, refer pending actions that have come within that court’s jurisdiction. The exception. Its cases. - Establishment that the action seeks compensation for the respondent company’s fault consisting in its failure to disclose share-trading information and financial information, which caused the delisting of the appellant’s shares from the Kuwait Stock Exchange, as well as a reduction in the number and value of the shares. Its implication: the dispute concerns shares. The Capital Markets Court has jurisdiction to hear it. The challenged judgment’s departure from this and its consideration of the merits constitute a defect requiring its cassation. Rule: The provision in Article No. (2) of Law No. 7 of 2010 concerning the Establishment of the Capital Markets Authority and the Regulation of Securities Activity, published in Official Gazette issue No. 964 on 28/2/2010, that “... An independent public authority possessing legal personality shall be established, supervised by the Minister of Commerce and Industry, called the (Capital Market Authority),” and in Article No. (3) of the same law that the Authority aims at the following: “(1)- Regulating securities activity in a manner characterized by fairness, competitiveness, and transparency (2) ...... (3) ........... (4) ......... (5) ........ (6) ....... Working to ensure compliance with laws and regulations related to securities activity,” and in Article No. (108), “A court called the Capital Markets Court shall be established within the Court of First Instance. Its location shall be determined by a decision of the Minister of Justice with the approval of the Supreme Judicial Council. This court shall consist of the following: (1) 0000 (2) Non-criminal circuits having exclusive jurisdiction to adjudicate non-criminal actions concerning commercial, civil, and administrative disputes arising from the application of the provisions of this Law and the rules and regulations specific to the securities market, and substantive enforcement disputes relating to judgments issued by them, irrespective of the value of these disputes, ...,” and in Article 116 that “The non-criminal circuits of the Court of First Instance shall, of their own motion, refer actions pending before them that have come within the jurisdiction of the Capital Market Court under the provisions of this Law to the latter court, in their existing state .... The provisions of the preceding paragraph shall not apply to actions in which a judgment has been rendered on a part of their merits, actions in which an interlocutory judgment has been issued by it for a part of the litigation, and actions in which a decision has been issued adjourning them for pronouncement of judgment, even with permission to submit memoranda ...,” indicate, as stated in the explanatory memorandum to the Law, that a judicial body specializing in capital markets activity was established to facilitate and simplify the resolution of disputes arising in connection with the application of this Law. This Law was careful to repeal any provision conflicting with its provisions, whatever the subject of that provision, in recognition of the fact that its provisions are those of a special law concerning capital markets that supersedes, in its application, any other special or general law. That being so, the aforementioned Law established within the Court of First Instance a court called the “Capital Markets Court,” with non-criminal circuits whose exclusive jurisdiction it stipulated to adjudicate commercial, civil, and administrative disputes arising from the application of its provisions and the rules and regulations specific to the securities market, and substantive enforcement disputes relating to judgments issued by them, irrespective of the value of these disputes. The Law required the non-criminal circuits of the Court of First Instance, of their own motion, to refer pending actions that had come within the jurisdiction of the Capital Market Court under the provisions of this Law, except for those actions exempted by the legislature in which a judgment had been rendered on part of their merits, or in which an interlocutory judgment had been issued by it for part of the litigation, or in which a decision had been issued adjourning them for pronouncement of judgment, even with permission to submit memoranda. In view of the foregoing, and since the documents establish that the appellant brought his action—whose scope was defined in subject matter and cause—seeking a judgment against the respondent company ordering it to pay material and moral compensation for the harm he suffered as a result of what he stated was its fault in failing to disclose share-trading information and financial information, causing the delisting of its shares from the Kuwait Stock Exchange as a result of its failure to submit that information, which it repeatedly did, as well as a reduction in the number and value of his shares, causing him material and moral harm for which he seeks compensation in the amounts he assessed, the dispute thus concerns shares and consequently falls within the jurisdiction of the aforementioned court. Since the challenged judgment departed from this view and addressed the merits of the action, it is defective in a manner requiring its cassation, without any need to examine the remaining grounds of appeal.