Kuwait Court of Cassation principle number 1515

The general assembly of joint-stock companies; the board of directors has the right to convene its meeting on its own initiative or at the request of a specified number of shareholders in accordance with the procedures set out in the Companies Law, to consider the assembly’s agenda on matters within its competence, foremost among them the election of members of the board of directors. - The legislature’s authorization of the competent government department to convene the company’s general assembly. Its nature. The occurrence of legal violations or acts by some of those responsible for its management or its founders that harm its interests or affect the national economy. This situation must be assessed within its limits, without expansion; the government department may not replace the board of directors, which holds the right to convene the general assembly - 264 - Commercial of the company, in other cases. The reason therefor. This would introduce a new rule not provided by the text and involve interpretative reasoning in respect of its express terms. - The company’s board of directors. Its competence to manage the company. Its members are agents of the shareholders’ general assembly for performing management functions. Termination of the agency upon expiry of the board’s term, resignation, or removal. Its necessary consequence. The former board of directors must continue performing its duties to preserve the company’s funds and safeguard its interests and the shareholders’ interests so that they are not endangered by their agents’ cessation of their duties and leaving management vacant. - The outgoing board of directors may convene the company’s general assembly to elect a new board of directors. The basis thereof. Article 719 of the Civil Code.