Kuwait Court of Cassation principle number 84

Summary: - Establishment of a judicial body specializing in capital markets activity. Its purpose. Facilitating and easing the resolution of disputes arising in connection with the application of the provisions 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 at the Court of First Instance. Its inclusion of non-criminal circuits. Its exclusive jurisdiction to determine commercial, civil and administrative disputes and substantive enforcement disputes relating to judgments issued by it, regardless of the value of the dispute. The non-criminal circuits must, of their own motion, refer pending cases that have come within that court's jurisdiction. The exception. Its cases. - It being established that the action seeks compensation for the respondent company's fault consisting of its failure to disclose share-trading information and financial information, which caused the cancellation of the listing of the appellant's shares on the Kuwait Stock Exchange, in addition to the reduction of the number and value of the shares. Its implication. The dispute relates to shares. The Capital Markets Court has jurisdiction to hear it. The challenged judgment's departure from this and its determination of the merits. This renders it defective and necessitates its cassation. Rule: The provision in Article (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 (3) of the same Law, "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 relating to securities activity"; and in Article (108), "A court called the Capital Markets Court shall be established at the Court of First Instance. Its seat shall be designated 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 determine non-criminal actions relating to 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, regardless 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 cases pending before them which have come within the jurisdiction of the Capital Market Court pursuant to the provisions of this Law to the latter, in their current state .... The provisions of the preceding paragraph shall not apply to actions in which judgment has been rendered on part of the merits, actions in which an incidental judgment has been issued therefrom for 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 so as to facilitate and ease the resolution of disputes arising in connection with the application of the provisions of this Law. This Law was careful to repeal any provision conflicting with its provisions, whatever the subject matter of that provision, 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, the aforementioned Law established at the Court of First Instance a court called the "Capital Markets Court," with non-criminal circuits whose exclusive jurisdiction it stipulated to determine 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, regardless of the value of those disputes. The Law required the non-criminal circuits of the Court of First Instance, of their own motion, to refer pending cases which had come within the jurisdiction of the Capital Market Court pursuant to the provisions of this Law, except for the actions excluded by the legislature in which judgment has been rendered on part of the merits, or in which an incidental judgment has been issued therefrom for part of the litigation, or those in which a decision has been issued adjourning them for pronouncement of judgment, even with permission to submit memoranda. In view of the foregoing, and as it is established from the papers that the appellant brought his action—whose scope was defined as to subject matter and cause—seeking a judgment against the respondent company requiring it to pay material and moral compensation for the damage he sustained as a result of what he stated was its fault in failing to disclose share-trading information and financial information, which caused the cancellation of the listing of its shares on the Kuwait Stock Exchange as a result of its failure to comply with the submission of those data, which it did repeatedly, in addition to the reduction in the number and value of his shares, thereby causing him material and moral damage for which he seeks compensation in the amounts he assessed, the dispute in this form relates to shares and accordingly falls within the jurisdiction of the aforementioned court. As the challenged judgment departed from this view and addressed the merits of the action, it is defective in a manner necessitating its cassation, without any need to examine the remaining grounds of appeal.