Specialized Economic Courts... A Safe Environment for Foreign Investments

Experts: A long-awaited step to meet the requirements of the business community

Adbi Al-Tahnoun: A magical tool to address the backlog of commercial cases in courtrooms for years

Salem Al-Kandari: A regulatory step that enhances Kuwait’s status as an attractive regional financial hub for major projects

Najah Bilal

The State of Kuwait is rapidly advancing toward updating its economic and legislative infrastructure in alignment with developmental visions aimed at diversifying national income sources and attracting global capital. In this context, the government’s decision to establish specialized economic courts stands out as one of the most significant structural transformations in the country’s legal and financial environment. Experts in economics and law, as well as observers, described this move to “Al-Siyasa” as a long-awaited step to meet the demands of the modern business community. In this regard, economic expert and lawyer Adbi Al-Tahnoun emphasized that the government’s direction toward establishing specialized economic circuits aims directly at resolving the issue of commercial cases lingering in courtrooms for several years, whether the disputes are between competing companies or between individuals and companies.

Protecting Damaged Companies

Al-Tahnoun clarified that the lengthy duration of litigation, which can extend from two to four years, is primarily due to a shortage of specialized experts and complexities associated with financial matters. This situation exposes some companies to a lack of defense and evidence capabilities, ultimately forcing them into bankruptcy, complete closure, or the freezing of their capital and business operations.

He stressed that economic courts will contribute to accelerating the resolution of these disputes to protect damaged companies from bleeding losses. He affirmed that the existence of these specialized circuits will positively impact the business environment and enhance the flow of foreign capital and investments into the local market.

A Regulatory and Investment Step

For his part, lawyer Salem Al-Kandari affirmed that this government direction represents an imperative necessity to protect both local and foreign investors. He explained that this regulatory step will directly and profoundly impact the volume of incoming investment financial flows to the country, thereby driving unprecedented economic growth and enhancing Kuwait’s status as an attractive regional financial hub for major projects. Furthermore, he noted that having a judicial guarantee for dispute resolution contributes to resolving contemporary commercial and financial disputes more quickly, especially since financial cases are surrounded by severe complexity due to the intertwining of digital contracts, banking transactions, intellectual property, bankruptcy, and acquisition issues.

Al-Kandari pointed out that the traditional judiciary faces challenges related to the prolonged duration of litigation resulting from the accumulation of diverse cases. Hence lies the importance of economic courts in providing judges and financial experts with precise specialized qualifications who understand the language of markets and trade movements. This ensures the issuance of judicial rulings characterized by speed and high accuracy, reducing wasted time in courtrooms. He noted that legal and judicial security is the primary criterion sought by foreign investors before injecting their capital into any investment environment. Therefore, specialized courts will contribute to sending a clear message of reassurance to the global investment community that their rights are protected under a mature, transparent judicial system based on international standards. This is particularly important since legislative stability significantly reduces the sovereign and regulatory risks feared by capital owners. He added that this step will contribute to raising Kuwait’s ranking in the Ease of Doing Business and Global Competitiveness indices issued by the World Bank.

Establishment of Economic Courts

In a related development, lawyer and legal advisor specializing in economic disputes, Hamad Al-Mutairi, affirmed that Kuwait has transformed into an attractive investment environment and a source of global admiration, thanks to relentless efforts and sound planning. He stressed that establishing specialized economic courts alongside commercial courts has become an urgent necessity to keep pace with this development and to define specialized judicial jurisdiction under the umbrella of the general judiciary.

He explained that foreign capital is characterized by caution and will not enter local markets to inject investments unless there is a meticulous study of two key factors. The first is the expected impact on the national economy, noting that the influence of these courts extends beyond merely protecting existing capital; it will also create an enabling environment for establishing new companies, attracting strategic partnerships between the public and private sectors, and fostering innovation in the financial and banking sectors. The second factor revolves around simplifying and expediting litigation procedures in economic matters, which enhances the efficiency of the entire economic cycle. This will rapidly reinject funds frozen due to legal disputes into the national economy’s bloodstream, thereby increasing liquidity and supporting the pace of comprehensive sustainable development.

He emphasized that the establishment of specialized economic courts represents a crucial turning point for improving the business environment and the country’s financial performance, particularly given that traditional courts take between 500 to 650 days to resolve commercial disputes. In contrast, specialized courts supported by digital platforms can reduce litigation duration by up to 60% and adjudicate complex cases within just 90 to 120 days, thereby raising the efficiency of dispute resolution through a fully electronic system. He added that judicial security is directly proportional to capital flows, noting that specialized courts will help increase foreign direct investment by 15% to 25% during the first three years.