The Kuwaiti government issued Decree-Law No. 69 of 2026 after determining that rigid seniority rules in the existing statute had hampered timely formation of bankruptcy circuits, according to the text published in the Official Gazette Kuwait Alyoum. The amendments revise Article 4 and the opening paragraph of Article 7 from the Bankruptcy Law enacted under Law No. 71 of 2020, creating a dedicated Bankruptcy Court within the Court of First Instance that may comprise one or more judicial circuits. A decision by the Minister of Justice, subject to Supreme Judicial Council approval, will fix the number of circuits and their locations while each panel consists of three judges supported by auditors drawn from the official registry.
Leadership of these circuits will now require only that the presiding judge hold the rank of court agent or above, expanding beyond the narrower pool of more senior personnel previously mandated, the decree explained. The Bankruptcy Department itself must be headed by a judge of at least court-agent rank rather than the higher counselor level that had been compulsory, and the department will draw additional First Instance judges designated specifically for bankruptcy work. The General Assembly of the Court of First Instance will select all participating judges while the Ministry of Finance supplies necessary funding and executive regulations set remuneration for supporting auditors.
An explanatory memorandum issued with the decree-law noted that the prior seniority thresholds had repeatedly prevented full staffing of bankruptcy panels because too few eligible judges were available at any given time. That constraint produced measurable backlogs in both ordinary disputes and urgent applications, the memorandum stated, prompting the amendments to widen eligibility without lowering the overall quality of judicial oversight. The changes were enacted under legislative powers conferred by the Amiri Order of May 10, 2024, that permits issuance of decree-laws with the force of statute.
Law No. 71 of 2020 had itself represented a foundational overhaul of Kuwait’s insolvency regime by replacing an earlier framework centered on liquidation with preventive settlement and restructuring mechanisms designed to preserve viable enterprises, according to an assessment published by the international law firm Al Tamimi & Company. The 2020 statute removed the classification of simple debt default as a criminal offense absent fraud and aligned Kuwaiti procedures more closely with standards promoted by multilateral institutions, the firm reported. Subsequent adjustments, including measures reinstated in 2025 to strengthen enforcement against solvent debtors who evade obligations, have continued to refine the system’s balance between debtor relief and creditor protection.
The International Monetary Fund’s 2024 Article IV consultation report identified accelerated legal processes in commercial disputes as an important component of the structural reforms required to advance Kuwait’s Vision 2035 economic diversification program. Non-oil private sector activity has shown signs of recovery despite lower oil production, yet protracted insolvency cases can still deter investment and constrain credit flows, the IMF staff assessment found. By addressing judicial bottlenecks the latest decree is expected to shorten resolution times for the Bankruptcy Court and support more predictable outcomes for affected businesses.
Implementation of the amended provisions begins immediately upon publication, with relevant ministers charged with executing its requirements, the decree-law stipulated. Selection of judges for the new circuits and the Bankruptcy Department will fall to the General Assembly of the Court of First Instance while the Ministry of Justice retains authority over circuit configuration. The decree also directs that sufficient numbers of qualified auditors be assigned to assist the judicial panels under terms set by the forthcoming executive regulations.
