Court Cancels Article 15 of 'Talbati' Lawsuit Regarding Delivery Platforms Regulations

In a lawsuit filed by Talabat, challenging the cross-border applicability of the regulation, the Administrative Division of the Supreme Court annulled Article 15 of the Executive Regulations for the Sector of Intermediary Electronic Platforms and Applications for Displaying, Ordering, and Delivering Products to Consumers, attached to Ministerial Decision No. 2026/109 issued by the Minister of Commerce and Industry on July 8, 2026, along with all legal consequences thereof. The court ordered the administrative authority to bear the costs and pay 10 Kuwaiti dinars in legal fees.

Article 15, as amended by law, stipulates that “violations of the executive decisions implementing Article 3 of this Law, as well as violations of the provisions of Articles 5, 8(1), 10, and 11 of this Law, shall be punishable by imprisonment for a term not exceeding one year and a fine not less than 300 dinars and not exceeding 3,000 dinars, or by either of these penalties. Confiscation of seized goods may also be ordered, and the court may order the closure of the establishment where the offense was committed for a period not exceeding six months, with the judgment text affixed to the establishment’s facade and published in two daily newspapers at the offender’s expense.”

As for Article 15 of the Executive Regulations for the Sector of Intermediary Electronic Platforms and Applications for Displaying, Ordering, and Delivering Products to Consumers, which was annulled by the Supreme Court, it stated that “without prejudice to any harsher penalty stipulated by another law, any act or omission resulting in a breach of the obligations or provisions set forth in these Regulations shall constitute a violation. One or more of the following administrative penalties shall be imposed, depending on the severity and recurrence of the violation, as follows:

(2) Closure of the client’s establishment or suspension of its activity if the Ministry is the competent licensing authority, or notification to the competent licensing authority to decide on closure or suspension if the license was issued by them. This shall automatically result in the suspension of the display of their products or services via the platform for the entire duration of the closure or suspension.

(3) Cancellation of the license by the relevant authority, which shall automatically result in the permanent suspension of the display of their products or services on the platform.”

The Supreme Court noted that the E-Commerce Law has not yet entered into force due to the non-issuance of its executive regulations, and that it cannot serve as a legal basis for establishing jurisdiction whose legal effects have not yet been determined by the law. Even assuming its entry into force—a premise that is fundamentally flawed—its provisions do not provide the administrative authority with justification for the system of penalties introduced by Article 15 of the Regulations.

The Supreme Court clarified in its ruling that regarding the claims made by the plaintiff company against Article 15 of the impugned Regulations, which stipulated penalties related to closure, suspension of activity, cancellation of licenses, and temporary or permanent blocking of the platform on the grounds that the creation of these penalties lacks a legal basis, the Ministerial Decision cannot independently impose penalties affecting licenses or the continuation of business activities.

It continued by stating that the provisions of Decree-Law No. (10) of 1979 concerning the supervision of trade in goods, services, and crafts, and the determination of prices, granted the Minister of Commerce and Industry original authority to regulate the manner in which services are provided, subject some of them to a pricing system and determine their prices, and issue the necessary decisions to implement the provisions of the law. However, this authority—despite its breadth within its domain—remains confined to the boundaries set by the legislator and cannot extend to exercising another authority not entrusted to him by the legislator, or to creating administrative penalties of a punitive nature without a legislative basis authorizing such action. Furthermore, the legislator did not leave violations of the regulatory and pricing rules issued to implement this law unregulated; rather, he himself determined the penalties arising from such violations and the competent authority for imposing them. Thus, Article (13) of the aforementioned law penalized violations of decisions issued to implement the second paragraph of Article (1), and Article (15) penalized violations of decisions implementing Article (3), entrusting the court—with due regard to circumstances and within the limits specified in the law—to impose the closure of the establishment or the revocation of the license as prescribed.

It further stated in its ruling: "Moreover, the Minister was specifically empowered by Article (12) bis to order temporary administrative closure when one of the crimes stipulated in the law is committed, for the period specified by the provision and in accordance with the conditions set forth, thereby revealing that the legislator organized the matter of penalties in a special and precise manner, distributing the authority regarding them between the judiciary and the administrative authority in a way that does not permit expansion or transgression through regulations.

It said: "Since Article (15) of the challenged regulation independently established a separate system of administrative penalties, making any act or omission constituting a violation of the regulation’s provisions subject to penalties ranging from warnings to administrative closure, suspension of activity, and temporary prohibition, culminating in license revocation and final prohibition, it has exceeded the scope of authority granted by the law to the Minister of Commerce and Industry regarding regulation and pricing, and entered a penal domain that the legislator did not authorize him to enter except within the narrow limits he set himself. Consequently, the administrative penal system it established is issued by an entity lacking the authority to do so, and is flawed by a defect of lack of substantive jurisdiction. This is not altered by the administrative authority’s insistence in its defense that these penalties find their origin in other legislations governing commercial licenses or consumer protection, or otherwise, as jurisdiction is not presumed or derived by analogy from authorities established in legislations governing other fields and cases, but must instead be based on a legislative basis authorizing the administrative authority to impose penalties in the specific case at hand and within the boundaries set by the law.

The “College” further stated that Article 15, referred to above, is not shielded from its flaw by the gradation of penalties it provides according to the gravity and recurrence of the violation, as proper organization of penalties does not dispense with the necessity of establishing jurisdiction in the first place. Moreover, the administrative authority’s reliance in its defense on Decree-Law No. (10) of 2026 on Regulating Work in the Digital Commerce Sector does not alter the foregoing. Although this decree-law was issued on February 22, 2026, and published in the Official Gazette of Kuwait on March 1, 2026, Article 45 thereof explicitly stipulates that it shall be applied after the lapse of one month from the date of publication of its executive regulations in the Official Gazette, a condition that has not yet been met. Consequently, this legislation had not entered into force at the time the challenged decision was issued, meaning it cannot serve as a legal basis for establishing jurisdiction whose legal effects have not yet been established by law.

Furthermore, even assuming the entry into force of this decree-law—an assumption that is fundamentally unfounded—its provisions do not assist the administrative authority in justifying the penalty system introduced by Article 15 under review. Although Article 7 of this decree-law empowers the Ministry to issue regulations regarding financial penalties for providers of products and services, Article 34 dedicates a specific legislative framework to suspension. It authorizes the Violations Committee to suspend the store for a period not exceeding thirty days, in accordance with the rules set forth in the executive regulations. This indicates that the legislator has specified the type of penalty, the competent authority to impose it, and its temporal scope. Such a framework does not constitute a valid basis for the different and broader penalties introduced by Article 15, which include warnings, administrative closure until the violation is rectified and activities are halted, license revocation, and final suspension.

Thus, this decree-law cannot serve as a basis for the challenged decision, both on temporal grounds due to its non-entry into force at the time of issuance, and on substantive grounds, as it does not justify the introduction of the penalty system in the scope and manner provided for in Article 15. Consequently, the arguments presented by the administrative authority on this matter lack a valid legal basis. As a result, Article 15 of the annexed regulations to the challenged decision was issued in excess of the jurisdiction conferred by law upon its issuer. Therefore, it must be annulled, along with all legal consequences arising therefrom.