Kuwait Court of Cassation principle number 85

Summary: - Establishment of a judicial body specializing in capital market activities. Its purpose. To facilitate and simplify 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 activities. The provisions laid down 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 cases pending before them that have come within the jurisdiction of that court. The exception. Its instances. - 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, in addition to a reduction in 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 proceeding to examine the merits. This renders it defective and requires 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 activities, published in the 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, and called the (Capital Market Authority)"; in Article No. (3) of the same Law, "The Authority aims to achieve the following: (1)- Regulating securities activities in a manner characterized by fairness, competitiveness and transparency; (2) ...... (3) ........... (4) ......... (5) ........ (6) ....... Working to ensure compliance with the laws and regulations relating to securities activities"; in Article No. (108), "A court called the Capital Markets Court shall be established within the Court of First Instance. Its seat 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 cases 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, irrespective of the value of these disputes, ..."; and in Article 116, "The non-criminal circuits of the Court of First Instance shall, of their own motion, refer cases pending before them that have come within the jurisdiction of the Capital Market Court pursuant to the provisions of this Law to the latter court, in their existing state .... The provisions of the preceding paragraph shall not apply to cases in which judgment has been rendered on part of the merits, cases in which an ancillary judgment has been rendered therefrom for part of the litigation, and cases 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 market activities was established so as to facilitate and simplify 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 of the fact 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 within the Court of First Instance a court called the "Capital Markets Court", containing non-criminal circuits for which it prescribed exclusive jurisdiction 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 cases pending before them that had come within the jurisdiction of the Capital Market Court pursuant to the provisions of this Law, except those cases exempted by the legislature in which judgment had been rendered on part of the merits, or in which an ancillary judgment had been rendered therefrom for part of the litigation, or those 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 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 pecuniary and non-pecuniary compensation for the damage he sustained as a result of what he asserted to be its fault in failing to disclose share-trading information and financial information, which caused the delisting of its shares from 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 reducing the number and value of his shares, thereby causing him pecuniary and non-pecuniary damage for which he seeks compensation in the amounts he assessed, the dispute thus relates to shares and accordingly falls within the jurisdiction of the aforementioned court. As the challenged judgment departed from this view and proceeded to examine the merits of the action, it is defective in a manner requiring its cassation, without any need to examine the remaining grounds of the appeal.