Kuwait Court of Cassation principle number 67

Summary: - The issue of subject-matter jurisdiction is a matter of public policy. Its implication. The court may rule on it of its own motion, and any interested person may raise it at any stage of the proceedings. - The determining factor in establishing the subject-matter jurisdiction of each judicial body is the relief sought by the plaintiff. - The Capital Markets Court. Its jurisdiction. Adjudication of actions relating to civil, commercial and administrative disputes, rules and regulations, and substantive enforcement disputes concerning judgments issued, whatever the value of the dispute arising from application of Law 7 of 2010 concerning the establishment of the Capital Markets Authority and the regulation of securities activity. - Financial brokerage. Its inclusion among the securities activities regulated by Law 7 of 2010 concerning the Capital Markets Authority and the regulation of securities activity. - Inclusion of activities carried out by a licensed person inside Kuwait or outside it with a customer in the State of Kuwait or for his account. Their subjection to the aforementioned Law and its Executive Regulations and to the subject-matter jurisdiction of the non-criminal circuit of the Capital Markets Court, because of their connection with that brokerage activity and their character as commercial disputes arising from the application of this Law. Its implication: exclusion from the jurisdiction of the ordinary courts. The challenged judgment's departure therefrom and its affirmation of the court of first instance regarding jurisdiction. A violation of the law and an error in its application requiring its cassation. Rule: It is established—in the jurisprudence of this Court—that the issue of jurisdiction by reason of the type of action is a matter of public policy under Article 78 of the Code of Civil Procedure. It is therefore deemed to be present in the proceedings and always before the court, which rules on it of its own motion, and any interested person may raise it at any stage of the proceedings. The determining factor in establishing the subject-matter jurisdiction of each judicial body is the relief sought by the plaintiff in his action. Under Article 108 of Law No. 7 of 2010 concerning the establishment of the Capital Markets Authority and the regulation of securities activity, the legislature established at the Court of First Instance a court called the "Capital Markets Court", composed of criminal and non-criminal circuits. The latter have exclusive jurisdiction to adjudicate non-criminal actions relating to commercial, civil and administrative disputes arising from the application of this Law and the rules and regulations governing the securities market, and substantive enforcement disputes concerning judgments issued by them, regardless of the value of such disputes. These circuits are composed of 3 judges, at least 1 of whom holds the rank of counsellor. This indicates, as disclosed in the explanatory memorandum to the Law, that establishing a judicial body specializing in capital markets activity facilitates and eases the resolution of disputes arising in connection with the application of this Law, which was careful to repeal any provision conflicting with its provisions, wherever such provision appears, in recognition that its provisions are those of a special law concerning capital markets which, in its application, supersedes any other special or general law. That being so, and since the documents establish that the respondent brought his action seeking judgment against the appellant for the amount claimed on the basis that he contracted with the appellant—........... Group—to manage his account and trade on it with ........... Company, and that it breached the agreements concluded between them by failing to stop trading on his account and notify him thereof in writing if it fell to 60000 US dollars, and that it guarantees payment of this amount to him; and since financial brokerage is among the securities activities regulated by Law No. 7 of 2010 concerning the Capital Markets Authority and the regulation of securities activity in Chapter Five, Articles 63 to 67, and in the Law's Executive Regulations in Chapter Five, Articles 123 to 240; and since activities carried out by a licensed person inside Kuwait or outside it with a customer in the State of Kuwait or for his account are subject to this Law and its Executive Regulations under Article 123 of the Regulations, jurisdiction to hear the dispute lies with the non-criminal circuit of the Capital Markets Court, because it concerns securities brokerage activity falling within the remit of the Capital Markets Authority. It is a commercial dispute arising from the application of the aforementioned Law No. 7 of 2010 and falls outside the jurisdiction of the ordinary courts. This is subject-matter jurisdiction relating to public policy. Accordingly, the first-instance judgment was issued by a court lacking subject-matter jurisdiction to hear it. Since the challenged judgment departed from this view and ruled on the merits of the dispute, affirming the jurisdiction of the court of first instance, it violated the law and erred in its application, requiring its cassation on this ground without any need to examine the remaining grounds of appeal.