Kuwait Court of Cassation principle number 1397

Enactment of Law 41 of 1993 concerning the State's purchase of certain debts and the manner of their collection. Its objective: to establish rules ensuring the State's collection of purchased debts to safeguard public funds and to grant clients serious about repaying their debts appropriate facilities for prompt payment of their debts according to the methods and deadlines specified in this Law. The condition thereof. The client must notarize an acknowledgment of his indebtedness and express his wish to choose the method of repaying his debt within the prescribed periods. Failure to express that wish or breach of the repayment deadlines. Its effect. The debt becomes immediately due, and he is obliged to pay it, its accessories, and whatever portion thereof may have been waived, up to the date of payment. The Public Investment Authority may not conclude a composition to avert bankruptcy and may only submit its proposal concerning it to the court. - The challenged judgment's reversal of the appealed judgment declaring the bankruptcy of the company and its jointly liable guarantor and approving a composition to avert bankruptcy for the guarantor, on the basis that the company paid the equivalent of the immediate cash settlement amount, that the Public Investment Authority did not object to concluding a composition to avert bankruptcy with the guarantor, and that the Authority's interest in declaring the company's bankruptcy was not commensurate with the latter's interest. An error in applying the law. The reason therefor. It adopted a meaning of cessation of payments different from that prescribed by Law 41 of 1993 and contrary to its provisions that the Public Investment Authority may not conduct cash settlement operations for debts or reschedule them outside the scope of that Law. To hold otherwise would place a debtor who ceases payment until after the prescribed deadlines in a better position than one who delays for a limited period permitted by law.