Kuwait’s Council of Ministers approved significant amendments to its Civil and Commercial Procedures Law and Bankruptcy Law to combat non-payment among solvent debtors. The changes reinstate imprisonment for evaders, empower enforcement agencies, and enhance legal transparency, aimed at bolstering the investment environment and restoring economic confidence.
The Kuwaiti Council of Ministers has approved amendments to the Civil and Commercial Procedures Law and the Bankruptcy Law to address the issue of non-payment by solvent debtors, which has led to increased bad debts and a negative economic impact. Justice Minister Nasser Al-Sumait announced these changes aimed at restoring financial accountability among debtors, reflecting a concerted effort to fortify the economic framework of the country.
The amendments to the Civil and Commercial Procedure Law (Law No. 38/1980) include provisions to target financially capable debtors who are evading payments. It empowers the Enforcement Administration to demand financial disclosures and report defaults to credit bureaus. Additionally, the amendments reinstate the arrest and imprisonment of such debtors, although with exemptions for vulnerable groups like pregnant women and those unfit for duty. Debt repayments may be arranged in installments based on the debtor’s financial capability, with a stipulation for separate imprisonment from criminal offenders.
Furthermore, the Bankruptcy Law (Law No. 71/2020) has been amended to reintroduce arrest and imprisonment for uncooperative debtors. These reforms are aimed at enhancing the efficiency of enforcement procedures, minimizing asset concealment, and strengthening penalties for misuse of suspension mechanisms. The overall objectives include bolstering the investment climate and restoring confidence within the financial system of Kuwait.
Minister Al-Sumait stressed the necessity of these amendments for protecting the national economy by mitigating bad debts and promoting a transparent legal framework. The changes align with international best practices and aim to modernize Kuwaiti laws, fostering a fair balance between creditor protections and debtor rights, ultimately contributing to an equitable economic environment.
The introduction of these legal amendments represents Kuwait’s proactive approach to addressing debt-related challenges. By reinstating imprisonment for evasive debtors and enhancing transparency between creditors and debtors, the government seeks to improve the economic landscape and ensure financial accountability. This legislative change is expected to positively impact the investment climate and restore trust in Kuwait’s financial system.
Original Source: www.zawya.com
