Kuwait Court of Cassation principle number 1501

Offering company shares for subscription. The legislature regulated it, required subscription to be genuine, and prohibited sham subscriptions or subscriptions in fictitious names. Violation of this. Its effect. Absolute nullity, which any interested party may invoke and which the court may declare of its own motion. - The appellant’s purchase, from Kuwaiti citizens holding civil identification cards, of their right to subscribe publicly for shares in a company, for his own account, with the intention of reselling that right to the respondent pursuant to a contract drawn up between them, seeking profit and gain for both parties. A purchase that does not reflect a genuine reality but is a sham prohibited by the legislature, which expressly provided for its nullity as a matter of public policy, extending to the contract generated by and consequent upon it. The appellant’s argument that nullity is confined to the subscription and not the agreement to purchase the right thereto. Has no effect. The reason for this. An object of an obligation that contravenes the law, public policy, or good morals renders the contract void.