The explanatory note to the law establishing the Capital Markets Authority and Regulating Securities Activity clarified: that a specialized judicial body has been established for the activity of capital markets in order to facilitate and facilitate the resolution of disputes that arise on the occasion of the application of the provisions of this law, including those related to collective investment, which was keen to cancel any text that contradicts its provisions, whatever the subject of this text, in appreciation of the fact that its provisions are the provisions of a special law on financial markets that must be applied in any other private or public law.
What is the collective investment system?
The collective investment system, in the text of Article 76 of the law establishing the Capital Markets Authority and Regulating Securities Activity, means one of the following:
- An investment fund with legal personality.
- A contractual collective investment scheme related to movable or immovable assets, the purpose of which is to enable persons participating in this scheme to participate in or obtain profits that may arise from the acquisition, ownership, management or disposal of such assets.
- What the Capital Markets Authority decides falls under the collective investment system.
The competent court to hear disputes related to collective investment
The Kuwaiti legislator stipulated in Article 108 of the Law Establishing the Capital Markets Authority and Regulating Securities Activity that a court called the Capital Markets Court shall be established in the High Court. Whereas, the non-penal circuits in this court are exclusively competent to adjudicate non-penal cases related to commercial, civil and administrative disputes arising from the application of the provisions of this law and the regulations and regulations of the stock market, and the substantive implementation disputes related to the judgments issued by it, regardless of the value of these disputes.
Disputes related to collective investment are outside the jurisdiction of the ordinary courts
The Kuwaiti Court of Cassation clarified in its ruling No. 1000 of 2012 on 23/6/2013 the Commercial Department that disputes related to collective investment are outside the jurisdiction of the ordinary courts, as it stated:
The first respondent has filed a lawsuit requesting a ruling to recover the rest of the value of its units owned by him in the appealing fund, which is one of the collective investment systems regulated by Law No. 7 of 2010 regarding the establishment of the Capital Markets Authority and the regulation of securities activity in Articles 76 to 91. Hence, the case is considered as one of the commercial disputes arising from the application of the provisions of this law, and the case was realized before a court of first instance before a ruling on its merits, or a sub-judgment was issued from it for part of the litigation, or a decision was issued to postpone it for the pronouncement of the ruling. What takes it outside the scope of the ordinary courts’ jurisdiction, and the jurisdiction over its consideration falls to the non-criminal circuit of the Capital Markets Court previously referred to, and it is a qualitative jurisdiction and is related to the public order.
If the contested judgment violated this consideration and refused to plead that the Court of First Instance had no qualitative jurisdiction to consider the case, saying that the law did not limit the jurisdiction to the appellate circuits competent to hear appeals against judgments issued in commercial, civil and administrative disputes without others, but rather extended the jurisdiction to other appellate circuits, then He has violated the law and made a mistake in its application, which is defective and must be distinguished without the need to discuss the rest of the reasons for the appeal.
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