Abrupt Contract Termination Results in KD 114 Million Loss: PAI, MoCI to Compensate

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KUWAIT CITY, Jan 24: The Court of Appeals yesterday issued the largest compensation ruling for a commercial company, requiring the government, represented by the Director of the Public Authority for Industry (PAI) and the Minister of Commerce and Industry (MoCI) in their capacities, to pay compensation worth KD 114 million after the ministry and PAI intervened to withdraw a huge commercial project from the company and caused its loss.

According to the case file, the plaintiff company had rented from the defendant authority a state-owned plot in Ardiya with an area of 150,000 square meters based on the lease contract dated May 24, 2003 for 20 years, starting from the day after the completion of three years from the date of the contract. The plaintiff company had prepared engineering plans, obtained the necessary licenses from the municipality, and completed the project, but the defendants terminated the contract. The company then filed a lawsuit against them, demanding compensation for the damages it suffered as a result of the contract termination.

The Court of Cassation issued a verdict on December 23, 2018 in the appeal No. 1604/ 1587/2016 Commercial/2 by obliging the Public Authority for Industry and the Minister of Commerce and Industry, in their capacity, to pay the company temporary compensation of KD 5,001. However, the plaintiff company suffered material and moral damages as a result of this act, represented by the value of the construction and other works carried out on the site subject to the contract.

The judicial rulings were issued in favor of the project’s contractors and subcontractors, other financial claims related to the project, judicial expenses, attorney’s fees in those lawsuits, financial guarantees for the project, and the losses incurred as a result of the decline in the company’s share price and the impact on its commercial reputation, which prompted it to file this lawsuit to calculate the value of those damages and oblige the plaintiff to pay them.

Al-Seyassah / Arab Times report

This news has been read 2585 times!