ARTICLES & UPDATES

Introduction:

Recent reports from Al-Qabas have highlighted notable progress in Kuwait’s legal domain, particularly regarding the formulation of a new law governing judicial arbitration.

This article aims to offer a comprehensive summary of the main aspects outlined in the draft law, shedding light on its potential implications for Kuwait’s arbitration landscape.

Objective and Scope:

The proposed law aims to strengthen Kuwait’s arbitration sector, which serves as a crucial support for judicial processes.
The draft law intends to replace Law No. 102 of 2013, which placed monetary restrictions on arbitral tribunal jurisdiction to adjudicate matters exceeding 500,000 Kuwaiti Dinars.
The draft law contains 35 articles and is drafted to align with the most important developments in the field of judicial arbitration.
The new draft law is anticipated to be submitted by the government in the next national assembly, following the conclusion of the electoral process.
It aims to harmonize with regional trends in judicial arbitration, specifically in addressing commercial and financial disputes before resorting to traditional court proceedings.

Important clauses of the law

It is permissible to arbitrate on matters in which reconciliation is permissible but not on matters that violate public order.
The arbitration agreement may only be concluded by an individual who holds the authority to dispose of the right subject to arbitration.
The arbitration shall not be considered unless it is in writing, acknowledged and signed by the parties, and includes the arbitration clause.
Neither party may seek interim or urgent relief from the courts before initiating arbitration proceedings, thereby waiving their right to immediate judicial intervention. Moreover, the arbitration administration shall refrain from accepting a request for arbitration until any related court adjudication has been completed.

Provisions Regarding Arbitration Agreements:

Arbitration agreements must be in writing and they shall be deemed to be in writing in the following circumstances A) If it is evident that the documents exchanged between the parties such as letters, telegrams, cables, or other forms of wired or wireless communication, provided it is in written form or in electronic data format that can be referred to, or by any other means specified by the law. B) If it is indicated in the mutual claims and defence documents, where one party asserts the existence of an arbitration agreement and the other party does not contest it.C) If there is a reference in a contract to a document containing an arbitration clause, provided that this reference explicitly considers the document as part of the contract.

Formation and Functions of Arbitral Tribunals:

Arbitral tribunals shall consist of one or more judges along with arbitrators selected by the disputing parties or appointed by the Arbitration Department.
These tribunals shall have the authority to address preliminary issues falling within civil or commercial jurisdiction, including challenges to the validity of arbitration agreements.
The Arbitral Tribunal shall have the competence to rule on the following matters: A) Disputes that the concerned parties have agreed to arbitrationB) Exclusive adjudication on disputes that arise between ministries, government agencies or public legal persons, and between companies whose capital is wholly owned by the State, or between these companies, provided that 60 days have elapsed since the dispute was submitted to the Fatwa and Legislation department without reaching an amicable solution.

Role of the Court of Cassation:

The Court of Cassation shall be responsible for reviewing appeals related to arbitration proceedings, ensuring compliance with procedural requirements and legality.
The Court shall express its opinion on the appeal within 15 days of the expiration of the timeframe specified in Article 154 of the Civil and Commercial Procedures Law.
The court shall decide not to accept an appeal if it is found inadmissible due to formal defects, or invalid procedures or if it is based on grounds other than those stated in Article 28 of this law.
The Court of Cassation shall decide on the appeal, even in the absence of the parties, and without pleadings, unless deemed necessary by the court.
The Court shall issue its judgment within 60 days from the date of expressing the prosecution’s opinion of the appeal, in accordance with the preceding paragraph.

Criteria for Arbitrators:

Arbitrators must meet specific eligibility criteria, such as being a competent natural person, legal capacity, independence, and neutrality. They must not be previously convicted of a crime involving dishonour or trust.
The acceptance of the arbitrator to act as an arbitrator shall be in writing, with his signature on the relevant documents to the effect thereof, or by performing an action indicating his acceptance of the task.
The arbitrator’s acceptance of his role is valid regardless of their nationality when selected by either party to the dispute.
A special register shall be established by the Arbitration council for the enrollment of Kuwaiti arbitrators who are experienced in legal, engineering, or accounting disciplines, or specialities required by the council.

Establishment of the Arbitration Council:

A dedicated Arbitration Council shall be formed within the Judicial Arbitration Department, the council shall consist of 5 members, the Council shall be chaired by an advisor with the rank of deputy, two heads of judicial arbitration tribunals, appointed by a decision of the Judicial Council, and two arbitrators registered in the schedule prepared for this purpose in the arbitration department, the term of the council shall be two years.

Conclusion:

The draft law on judicial arbitration signifies a significant step towards strengthening Kuwait’s legal framework and creating an environment conducive to alternate dispute resolution mechanisms.

By tackling contemporary challenges and adhering to international standards, this legislation aims to improve the efficiency and efficacy of arbitration proceedings in Kuwait.