Kuwait Court of Cassation principle number 1779

Offering company shares for subscription. The legislature regulated it, required that the subscription be genuine, and prohibited sham subscriptions or subscriptions in fictitious names. Violation thereof. Its effect. The nullity sought, 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 identity cards, of their right to subscribe to a public offering of 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 to achieve profit and gain for both parties. A purchase that does not represent a genuine reality but is instead a sham, which the legislature prohibited and expressly declared void, with such nullity relating to public policy and extending to the contract arising and resulting therefrom. The appellant’s contention that nullity is confined to the subscription and does not extend to the agreement to purchase the right thereto. Of no effect. The reason therefor. An obligation whose subject matter contravenes the law, public policy, or good morals renders the contract void.