Administrative Court Cancels Article 15 of Commerce Ministry Decision on Electronic Platforms

The Administrative Court, presided over by Advisor Mohammed Jassam Bahman, annulled Article 15 of the regulations governing the intermediary electronic platforms and applications sector for displaying, requesting, and delivering products to consumers, which was attached to Ministerial Decision No. 109/2026 issued by the Minister of Commerce and Industry on July 8, 2026, in the lawsuit filed by Talabat, with all resulting legal consequences. The court affirmed that the authority of the Minister of Commerce and Industry to regulate services and issue necessary decisions to implement the provisions of the law does not extend to creating administrative penalties of a punitive nature without explicit legislative basis. It noted that the legislator had specified in the law the penalties applicable for violating regulatory and pricing rules, as well as the competent authorities empowered to impose them.

The court explained that Article 15 of the challenged regulations established a comprehensive system of administrative penalties, ranging from warnings, through administrative closure, suspension of activity, and temporary blocking, up to license revocation and permanent blocking. The court considered this an overreach of the authority granted to the Minister of Commerce and Industry. It clarified that the legislator had specifically regulated the matter of penalties and distributed jurisdiction over them between the judiciary and the administrative authority; therefore, such authority cannot be expanded, nor can new penalties be created via executive regulations.

The court rejected the Ministry of Commerce’s reliance on similar provisions in other legislations, emphasizing that jurisdiction cannot be presumed or derived by analogy from laws governing different fields. Instead, it must be based on an explicit legislative provision authorizing the administrative authority to impose penalties in the case at hand. The court further stated that grading penalties according to the severity or recurrence of the violation does not remedy the absence of jurisdiction, noting that “well-structured penalties do not substitute for the fundamental requirement of having jurisdiction to impose them.”

The court also addressed the Ministry’s reference to Legislative Decree No. 10 of 2026 concerning the regulation of work in the digital commerce sector. It explained that although this legislation was issued on February 22, 2026, and published in the Official Gazette on March 1, 2026, it was not in force at the time the challenged decision was issued. Article 45 of the decree stipulated that it would take effect one month after the publication of its executive regulations in the Official Gazette, a condition that had not been met.

Furthermore, the court added that even assuming the legislative decree was in force, it would not provide the Ministry with a legal basis to create the penalty system outlined in Article 15. This is because the legislator had established a specific framework for blocking, stipulating that it must be ordered by the Violations Committee and last no more than 30 days, in accordance with rules set by the executive regulations.

Accordingly, the court concluded that Article 15 of the regulations was issued beyond the legal authority of its source and ordered its annulment, with all resulting legal consequences. The court ordered the administrative authority to bear the costs, in addition to ten Kuwaiti Dinars for legal fees, while rejecting all other requests made by the company.