Kuwait
1. Are freezing orders (or their equivalent referred to below) available in civil legal proceedings in this jurisdiction and what is their effect?
Yes. Freezing orders correspond closely to attachment orders in Kuwaiti law. The respondent is prohibited from dealing with the assets referred to in the freezing order until a specified time (for example, a further hearing or payment) or unless otherwise ordered by the Court. Attachment orders are available domestically and worldwide but Kuwaiti Courts are reluctant to issue orders that attach to assets abroad.
2. Are other interim orders commonly made in conjunction with a freezing (or equivalent) order?
No.
3. Briefly what is the relevant legal test?
Where a previous judgment has not been obtained, the applicant must show that:
(i) a debt must be due and owing to the applicant (or the asset to be attached must be connected to the action);
(ii) the applicant has a reasonable prospect of success on the underlying substantive claim (unless a judgment has already been obtained in respect of a debt claim);
(iii) the respondent has assets (or the respondent has in its possession the asset which is subject to the claim);
(iv) the amount being claimed should be a determinable amount (and while not common, if the claim is not for a liquidated debt, the debt would have to be estimated and proved to the satisfaction of the Court); and
(v) there is a real risk of unjustified dissipation (for example, frustrating or impeding the satisfaction of a judgment or award).
4. Briefly what is the process for obtaining a freezing (or equivalent) order?
The applicant makes an ex parte application (setting out the basis on which the relevant test is met) to the Court for a freezing order over the movable assets of the respondent.
Should the applicant have a judgment, the applicant can apply for the freezing order prior to enforcement.
5. Does the applicant have to provide any form of security or commit to compensation if its claim is ultimately unsuccessful and any freezing (or equivalent) order granted causes loss and damage to the respondent?
This is not typically required but this would depend on the surrounding circumstances.
6. Can it be sought against third parties?
Yes, but this would depend on the surrounding circumstances.
7. What assets are covered by a freezing (or equivalent) order?
Any movable assets subject to certain exceptions.
8. Can a freezing (or equivalent) order be made in support of substantive proceedings abroad?
Yes.
9. Can a freezing (or equivalent) order be made in support of arbitration proceedings or awards?
Yes.
10. At what stage of proceedings can a freezing (or equivalent) order be sought?
At any stage, including prior to commencement of the substantive claim or following judgment to assist with enforcement.
11. Are there typically any exceptions to the general prohibition on the respondent’s use of assets subject to a freezing (or equivalent) order?
Yes, if the value of the underlying claim is not proportionate to the value of the assets sought to be covered by the freezing order, the respondent may ask the Court to limit the extent of the freezing order.
Exceptions to assets subject to freezing orders include, but are not limited to:
(i) reasonable living expenses;
(ii) reasonable expenses for the respondent to conduct their trade/profession;
(iii) legal expenses (subject to the Court’s discretion); and
(iv) immovable property.
12. What happens after a freezing (or equivalent) order is granted?
Within eight days of obtaining the order, the applicant should notify the respondent of the existence of the order and inform any relevant third party (such as banks holding the respondent’s assets). Where the freezing order was obtained ex parte, the applicant must issue the substantive claim within eight days of the date of the freezing order (unless the freezing order was sought in support of other Court proceedings which will consider the merits of the underlying claims).
A third party is obliged to make a declaration to the Court of the assets in its possession within ten days from the date of notification of the freezing order.
13. Who pays the costs of the application for a freezing (or equivalent) order?
The applicant is liable for the costs of obtaining the freezing order.
14. What protections are there typically in a freezing (or equivalent) order for third parties to such orders?
Until a third party is notified of a freezing order, it is not generally obliged to comply with it. Once notified, the third party should comply. In some circumstances, the third party may be able to exercise prior rights of set off. The Court may require applicants to pay the reasonable costs incurred by a third party in complying with the order and to compensate it for any loss caused. Third party assets located in another jurisdiction can only be subject to a freezing order if the Courts in the state they are located in make such an order.
15. What are the consequences of breach of a freezing (or equivalent) order?
A respondent will be in contempt of Court and may be subject to imprisonment and/or a fine. A third party who knowingly does not comply with the freezing order may be personally liable for the amount noted in the freezing order and could be liable to pay any further sum ordered at the Court’s discretion.
16. Does a third party notified of (but not a party to) a freezing (or equivalent) order owe a duty of care to the applicant (meaning it can be liable to the applicant for non-compliance)?
Yes.
17. Can a freezing (or equivalent) order be enforced abroad?
Yes, in principle, although subject to the laws of the relevant jurisdiction.
18. Can freezing (or equivalent) orders from overseas jurisdictions be enforced in this jurisdiction?
In general, no. However, the Court can give consideration to a freezing order obtained in a foreign jurisdiction when considering an application for a freezing order before it.
Contacts
Hisham Al-Quraan Partner ASAR – Al Ruwayeh & Partners Kuwait City, Kuwait halquraan@asarlegal.com www.asarlegal.com Luis Cunha Partner ASAR – Al Ruwayeh & Partners Kuwait City, Kuwait lcunha@asarlegal.com www.asarlegal.com
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