What Kuwait's New Bankruptcy Law Means for Businesses

KUWAIT CITY, Jul 5: Kuwait has introduced amendments to its Bankruptcy Law aimed at improving the efficiency of bankruptcy proceedings by providing greater flexibility in the formation of bankruptcy courts and reducing delays in resolving disputes.

Under Decree-Law No. 69 of 2026, published in the Official Gazette Kuwait Alyoum, the government amended Article 4 and the first paragraph of Article 7 of the Bankruptcy Law issued under Law No. 71 of 2020.

The amendments provide for the establishment of a Bankruptcy Court within the Court of First Instance, consisting of one or more judicial circuits. The number of circuits and their headquarters will be determined by a decision of the Minister of Justice with the approval of the Supreme Judicial Council.

Each bankruptcy circuit will comprise three judges, with the head of the circuit required to hold a rank not lower than that of a court agent, instead of limiting appointments to higher-ranking judges. The judges will be selected by the General Assembly of the Court of First Instance and assisted by a sufficient number of auditors chosen from those registered with the relevant authority. Their remuneration will be determined under the executive regulations, while the Ministry of Finance will allocate the necessary funding.

The decree also amends the structure of the Bankruptcy Department, requiring it to be headed by a judge of at least the rank of a court agent, replacing the previous requirement that the department be led by a judge holding the higher rank of counselor. The department will include a sufficient number of Court of First Instance judges, designated as Bankruptcy Judges, who will also be selected by the General Assembly.

According to the explanatory memorandum, the amendments are intended to strike a balance between maintaining judicial expertise and providing greater flexibility in staffing bankruptcy courts. The government said the previous law's requirement that key positions be filled only by judges of specific senior ranks often made it difficult to complete the formation of bankruptcy circuits due to a limited number of eligible judges.

These staffing constraints, the memorandum noted, resulted in delays in hearing bankruptcy disputes and urgent applications. By expanding the pool of judges eligible to lead bankruptcy courts and departments, the amendments are expected to ensure faster case resolution while maintaining the quality of judicial decisions.

The memorandum added that the changes were introduced under the legislative authority granted by the Amiri Order of May 10, 2024, which authorizes laws to be issued through decrees with the force of law.

The decree takes effect from the date of its publication in the Official Gazette, with the relevant ministers responsible for implementing its provisions.