Foreign Arbitration Enforcement in Kuwait Law

Introduction

Kuwait is an Arab country that preaches Islam and obeys Sharia law. Even though tourism and the oil industry are developed in Kuwait, society remains largely traditional. Within the framework of Sharia, international law with a developed system of arbitration came to the territory of Kuwait. It gave rise to some contradictions in the execution of the decisions of international judges. At the moment, some issues with international arbitration remain unresolved, and sometimes Sharia is directly an obstacle to the rapid enforcement of an arbitrator’s award from another country.

Enforcement of Foreign Arbitral Award in Kuwait

Arbitral judging does not contradict Islam; the Qur’an describes cases of resolving trade and commercial conflicts with the help of arbitration judges. Badah postulates, “Arbitration in Sharia-based Countries The concept of arbitration is discussed in the Koran and therefore deep-rooted within the Arab countries long before integration with Western countries”. An arbitrator is a person of high competence, necessarily involved from outside, a third party. The referee is highly educated; people respect him and listen to his advice. As before, arbitral awards prevail in Kuwait in commerce and trade. With the development of Kuwait’s economic potential and the market, the laws have been repeatedly changed to attract investors, tourists, and people in business. The first arbitration court in Kuwait was opened for trade in the mid-1990s. In addition to trade and commerce, this court dealt with civil matters.

Under the laws of Kuwait, focused primarily on public order, peace, and morality, the arbitrator’s decision is enforced under certain conditions. Lawyers should also be guided by the principle of natural justice in society. Usually, foreign arbitral award enforcement is covered by Article 199, Law No. 38, 1980. There are legal treaties that have been signed by Kuwait and other countries in the Arab world. At the same time, these treaties are not signed by non-Muslim states. At the moment, this seriously complicates the enforcement of a foreign arbitral award. Article 199 and these treaties contain a crucial reciprocity reservation. The courts of Kuwait are guided by it since the reciprocity reservation demonstrates that courts made the foreign decision under laws similar to Kuwaiti society.

It is also necessary to comply with the enforcement procedure for the full-fledged conduct of international economic transactions and arbitration. If judges in Kuwait consider that there have been violations of procedural law, even a competent decision can be set aside. However, there are restrictions on the Kuwaiti judges since their powers are not clearly defined within making such decisions. In addition, any decision by a foreign arbitrator must not violate public order. One can see the advantage and kinship of Muslim countries both in the social and legal aspects. Arab countries linked to Kuwait by treaties offer an appropriate balance for Kuwait between traditional Sharia and civil law. Badah states, “Kuwait currently follows the procedures of the New York Convention, under the principle of reciprocity with public policy, as the main ground disqualifying enforcement of foreign arbitral awards in Kuwait”. Within this balance, compliance with the New York Convention is not always relevant for Kuwaiti society, but in modern realities, it is necessary.

As researchers show, Sharia plays an important role even when considering international court cases. It causes disagreement in non-Muslim countries. In turn, Kuwait, being a sovereign state, protects its rights, territories, and laws. Article X of the New York Convention in Kuwait has some reservations designed to protect Sharia and public order. Reservations and amendments allow Kuwait judges considerable flexibility in the final enforcement of the foreign arbitral award and especially foreign court award.

Enforcement of Foreign Court Award in Kuwait

Depending on which country’s court makes the award, enforcement of that award is not always approved by the judges. Clauses allow judges to make enforcement awards based on minor amendments or treaties. Sometimes, perhaps, judges are inconsistent in this regard. It gives rise to ambiguity in the scope of the powers of judges. Sometimes judges act within the framework of case law, which adds flexibility to their actions and decisions. Then the courts allow partial enforcement of awards; for example, they can increase or decrease the sum of fines. Sometimes imprisonment is replaced by a penalty by judges, which is also a variant of Kuwait’s legal and social norm.

Judges should not have much freedom in executing the awards of a foreign court. The Kuwaiti parliament may consider certain foreign judgments and arbitration matters. Moreover, the Kuwaiti parliament can regulate the powers of all judges, especially those whose duties include examining international cases and enforcing foreign courts’ awards. Investigators and lawyers should not forget that the Arab countries have a priori agreement with Kuwait on some issues. These questions underlie natural justice, public order, and Sharia law.

It has been repeatedly mentioned above that the Arab countries have concluded legal agreements among themselves, allowing them to execute decisions of a foreign court freely. It applies only to countries where society lives according to Sharia law, and the public order either entirely coincides with Kuwaiti or to a significant part. Non-Muslim countries have not ratified these treaties, including Kuwait in international trade and tourism. Perhaps this is due to political fears or cultural misunderstanding and rejection of other people’s norms.

The position of Kuwaiti law against the backdrop of international law forces the former to adapt. Perhaps it would be wise to create unique conditions for the awards of a foreign court. These special conditions should not be aimed at differences in social or legal norms. On the contrary, special requirements should motivate judges and create careful control over the execution of foreign judgments. Any changes in the decisions of foreign courts must be legally motivated. At the same time, Kuwait cannot act against the interests of its citizens. The laws of Kuwait do not allow contradictions between the final decisions made and the rules by which modern Kuwaiti society lives.

Conclusion

Arbitration courts have a long history in Kuwait, intertwining harmoniously with public order. Currently, Kuwait unquestioningly follows the New York Convention, but judges use several reservations in practice. One of the most critical reservations is reciprocity; this reservation is a bar to enforce specific foreign arbitral awards in Kuwait. Non-Muslim countries usually cannot satisfy the terms of the reciprocity reservation. Kuwait has not ratified some agreements with non-Muslim countries, which have long been confirmed with the countries of the Arab world. These countries together preach Sharia and the same social order, so it is easier for Kuwaiti judges to enforce the decision of a foreign court. These rules are enshrined in Article 199 of Kuwaiti laws, and most often, arbitral awards relating to trade and commerce and civil cases. Subject to certain reservations in Kuwaiti law, judges may partially enforce awards of foreign courts. It gives judges too much freedom and gives rise to ambiguity in their powers. The powers of the courts should be regulated by the Kuwaiti Parliament, especially when it comes to international law.

Reference List

Al Oula Law. (2012). ‘Enforcement of foreign judgments’. Al Oula Law Firm, pp. 1-4.

Alghanim, B. (2020). ‘The enforcement of foreign judgments in Kuwait’. Journal of Private International Law, 16(3), pp. 493–518. Web.

Badah, S. (2014). ‘The enforcement of foreign arbitral awards in Kuwait’. Acta Juridica Hungarica, 55(3), 290–295. Web.