The Legal Framework of Foreign Arbitration Enforcement in Kuwait Law

Laws have been shown to be effective for the regulation of public and private life of the citizens of multiple countries for thousands of years. One reason for it might be the flexibility of legislations: they change over time to be applicable to the existing conditions and guide the people in a particular way. A new emerging circumstance that influences the laws in various countries is globalism. International trade made it possible for individuals and corporations to interact with foreigners and participate in worldwide communication. Citizens of different countries have diverse laws, yet they have to agree upon something with others. For this purpose, the enforcement of foreign arbitration and courts is a widespread practice that guarantees the drive of decrees from the local to the international level (Elbalti, 2018). As such, both the foreign arbitral award and courts can be enforced in Kuwait. The process of enforcement has several necessary conditions that ensure Kuwait’s sovereignty and yet promote cooperation.

Arbitration is an effective legal tool for resolving disputes between conflicting parties via the judgment of a competent third party. In the case of foreign arbitration, the parties are two countries; the final decision in the process of arbitration is the award that parties should incorporate under predetermined conditions. In Kuwait, the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”) guarantees the existence of foreign arbitration and guides both Kuwaiti and international parties in this procedure (Badah, 2014). Thus, Kuwaiti law recognizes the global way of conducting disagreement elimination.

Kuwait has adopted the arbitration practice and accepted the enforcement of awards for a particular reason. Namely, “the drive to become more economically efficient and the recognition that international operations were a fundamental part of the economic development … led to arbitration being formally recognised by the State of Kuwait” (Badah, 2014, p. 83). As such, the participation of the country in international trade made it evident that commercial affairs should be dealt with according to principles that incorporate both the Laws of Kuwait and the foreign regulations so that businesses do not interfere with public life and all the parties can agree.

However, to accept the enforcement, it is necessary to have some validation so that to provide that the arbitration does not harm the country’s independence. There are several conditions that guide Kuwaiti parties in their decision whether to adopt the arbitral awards. The most important one is reciprocity, which suggests that both parties under the arbitration adhere to the award’s statement after the procedure is done. Next, the implementation of the award should be followed by operations that enforce it. Furthermore, the foreign award is designed and proclaimed by a competent third party and cannot be changed afterward. Finally, the result of the arbitration must not contradict the existing Laws of Kuwaiti and undermine the public lives of its citizens. Moreover, the Kuwaiti court can decide whether the conditions are appropriately kept and approve or reject the foreign award (Badah, 2014). Thus, it is determined that the enforcement of foreign arbitration awards is possible only after the necessary procedures are done and several principles are applied.

It should be highlighted that the enforcement of the arbitration awards policy in Kuwait was not merely a presentation of the openness to international cooperation. The state has truly implemented new regulations to adopt the changes for the cultural and religious conditions of the region. Namely, “Kuwait enacted the Code of Civil and Commercial Procedure that came into effect in 1980 and amendments to other legislations that are crucial for the enforcement of awards” (Badah, 2014, p. 84). Thus, it could be seen that the state recognizes the benefits of the enforcement and supports it via its legal framework.

The other significant notion would be the fact that Kuwait is under Sharia law since it is a country in which Islam is a state religion. Muslims adhering to the Koran value arbitration as a practice, and people who participate in this process are honored (Badah, 2014). Moreover, Sharia law is considered the guidance for all other legislations, and, therefore, the arbitral award should not violate or contradict these regulations. Thus, any enforcements that are against the country’s religious principles are rejected by the domestic court.

However, the legal reasons for refusal of the enforcement should be adequately declared and include several primary grounds. As such, the parties evaluate the capacity of the arbitrators, the justice that they enforce, and the level to which their interests were considered (Badah, 2014). Then, they officially state their position and observe the other state that should also implement the award. The other important factor is the presence of prejudices of the arbitrators and operational difficulties that might prevent the implementation (Badah, 2014). Limiting the list of the causes for refusal helps the procedure to remain valuable and effective.

The enforcement of foreign court awards is also possible in Kuwait and resembles that of the arbitration in its principles. It is stated that “a decision rendered by courts of foreign jurisdiction … can be recognized and enforced in the State of Kuwait if granted an exequatur by the Court of First Instance … under limited conditions” (Al Oula Law Firm, 2012, para. 1). The most significant condition is reciprocity, namely, the countries should be in agreement that the enforced laws are to be implemented in both of them. Hence, Kuwait can reject any enforced courts awards if the foreign party or parties do not adhere to this principle.

The realization of this type of enforcement is somewhat limited in Kuwait. Precisely, the country has several treaties with Arab countries that allow this legislation. These include the convention made by the League of Arab States and the Riyadh convention of the Arab Gulf Co-operative Council (Alghanim, 2020). However, no other state, for example, the European one, has made an agreement with Kuwait, although there were such proposals in the Hague Convention on the Recognition and Enforcement of Foreign Judgments in Civil and Commercial Matters (Alghanim, 2020). Moreover, it is underlined by some scholars that the process of enforcement is not made available to the public and is usually reduced to commercial affairs (Elbalti, 2018). Therefore, the procedure does not yet have much power in the state and happens on rare occasions.

To conclude, foreign enforcement is a valuable practice in Kuwait, although its two specific kinds differ in their implementation while being similar in their principles. The enforcement of the foreign arbitral awards is accepted as a legal procedure to resolve commercial disputes on the international level. There are precise requirements and conditions that determine the acceptance of the award. In turn, foreign law enforcement is limited to several conventions, which are declared in Arab states and lacks transparency.

References List

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

Al Oula Law Firm (2012). Enforcement of foreign judgments. Hawalli: Al Oula Law Firm.

Badah, S. (2014) ‘The enforcement of foreign arbitral awards in Kuwait’, American International Journal of Contemporary Research, 4(4), pp. 82-86.

Elbalti, B. (2018) ‘The recognition of foreign judgments as a tool of economic integration: views from Middle Eastern and Arab Gulf countries’, China’s One Belt One Road Initiative and Private International Law, pp. 218-234.