Kuwait Court of Cassation principle number 675

Offering company shares for subscription. The legislature regulated it, required that subscription be genuine, and prohibited sham subscription or subscription in fictitious names. Contravention of this. Its effect. Absolute nullity, which any interested person 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 publicly for shares in a company for his account, with the intention of reselling that right to the respondent pursuant to a written contract between them, seeking profit and gain for both parties. A purchase that does not represent 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 arising from and consequent upon it. The appellant's contention that nullity is restricted to the subscription and not the agreement to purchase the right thereto. It has no effect. The rationale for this. That the subject matter of - 129 - Commercial an obligation contrary to law, public policy, or good morals renders the contract void.