Kuwait creates specialized commercial courts to speed disputes and reassure investors

Kuwait is moving to set up specialized commercial chambers inside its existing court system, in a bid to create a better legal environment for investors. Cabinet approved a decree-law last week, introducing specialized economic circuits inside the Court of First Instance, Court of Appeal, and Court of Cassation — carving out exclusive jurisdiction over financial markets, banking, competition, trademarks, and major commercial contracts, Arab Times reports.

The pitch is speed and predictability. Most circuits across the courts will have three judges presiding, with Courts of First Instances making final decisions on claims under KWD 10k and courts of appeal and cessation taking on more complex cases and claims of over KWD 30k. The law also introduces one-judge circuits to make decisions on urgent matters and petitions.

The problem being solved? Dead capital. “The reform responds to the economic cost of delay and uncertainty in commercial litigation, not the direct cost of going to court,” Dr. Bashayer Almajed, senior counsel at Al Tamimi & Company and one of the lawyers who worked on the legislation, tells EnterpriseAM. A disputed receivable sitting unresolved keeps capital out of circulation and diverts management time, she adds. Uncertainty over enforcement becomes, in her words, “part of the risk of doing business” for companies operating in Kuwait.

That’s why the legislation goes well beyond creating another court. Almajed says the drafters built the reform around the full life cycle of a commercial dispute: An early settlement mechanism, a case-preparation office to get filings ready before judicial time is spent on them, specialist adjudication, electronic procedures, and — the piece she flagged as most important — a dedicated execution structure for enforcement.

“Take a routine payment dispute: Under the current system, a straightforward claim can stall for months on incomplete documents or expert reports, and even a winning party then has to fight a separate battle to actually collect. The new structure is designed to intervene at each of those points, rather than simply giving judges a shorter clock to work against,” she explains.

Foreign investors get one explicit hook: Cross-border enforcement. The new courts will enforce judgments issued by foreign courts, Justice Minister Nasser Al Sumait said — a direct answer to a standing complaint about cross-border enforcement inconsistency.

What’s next: The Justice Ministry has until 1 October 2027 to issue executive regulations, and existing commercial disputes will run under the old system until then. Almajed says the reform’s real test will be in implementation, not the decree-law’s text.

“Businesses ultimately do not measure the effectiveness of a justice system by the date printed on a judgment. They measure it by when that judgment produces a real-world result,” she says. Almajed sees expert evidence and the electronic-filing infrastructure as the two components most likely to become the new bottleneck if they aren’t built out with the same care as the court structure itself.