fivehundred magazine > > Interview with… Sam Habbas, ASAR – Al Ruwayeh & Partners

Interview with… Sam Habbas, ASAR – Al Ruwayeh & Partners

Kuwait’s economy is heavily dependent on oil. What initiatives has the country undertaken to diversify into other sectors? 

Kuwait has long recognised the need to diversify into other economic sectors and has looked to do so by putting in place a programme of economic diversification whereby the private sector will be energised by way of promoting infrastructure projects. While Kuwait’s oil reserves remain abundant, it is important to note that its oil fields are maturing, and as they do so, it will over time become harder to access those reserves unless there is increased infrastructure spend – this being a central part of the infrastructure development plan of Kuwait. Launched under Kuwait’s national 2035 development plan, “NewKuwait”, this development plan serves to enhance Kuwait’s role as a banking, trade and services hub within the Gulf region. In addition, it also aims to dramatically improve the business environment, boost the private sector by enhancing foreign and local investments, revitalize the labour market, reduce fiscal imbalances by reviewing government expenditure and looking to increase non-oil revenue. The development plan also covers projects related to the upgrading of infrastructure, expanding utilities and housing investments, and further additional projects have been suggested under the development plan in an attempt to rebalance Kuwait’s public and private sector’s. The prevailing lower oil price environment has however impacted certain of the initiatives outlined by the development plan, and thus far in 2020, the impact of Covid-19 on the aspirations of the development plan cannot be underestimated from the perspective of Kuwait’s competitiveness and ability to attract foreign direct investment. Having said this, it would appear that business life in Kuwait is now slowly, but surely, adapting to doing business under the “new normal” so-to-speak whilst the world works its way through the Covid-19 pandemic. This is however, but one of the many challenges that Kuwait is CURRENTLY facing, however, at the same time, the current economic and fiscal challenges present opportunities for Kuwait as efficiencies will be introduced, especially at state institution level, and thus contribute to creating a more agile and prosperous economy.   


Fintech is an emerging market in Kuwait. What are the attractions for fintech companies in your country? 

The fintech sector in the GCC region has been closely looked at as a potential avenue for diversification of local economies, and especially away from the oil and gas sectors. As such, there is quite a significant amount of focus on this new and exciting area of financial and technological development. Kuwait is keen to occupy a big foothold in the fintech arena and will be looking to do so with a traditional sense of entrepreneurial spirit and business sense. Kuwait has a good track record in the start-up scene, and particularly so the food sector. Notable transactions in the food sector include the sale of food delivery service companies, Talabat and Carriage for hundreds of millions of dollars to Delivery Hero SE, a European multinational online food-delivery service based in Berlin, Germany. 

The banking industry in Kuwait has also recognized the opportunities that the fintech space is able to provide, and so much so has this been the case, that fintech is being considered a key driver for change in the banking and finance industry and making the industry more efficient and agileImportantly, the Central Bank of Kuwait (which regulates all banks in Kuwait) has also adopted a more progressive stance in further supporting digitalisation. 

With the advent of all things fintech coming front and centre to the banking landscape, local banks and other financial service providers are looking to put the customer at the centre of every engagement and  across all touchpoints and channels. It is an ambitious new approach to delivering higher levels of service to banking and finance customers and ultimately to increase the entire customer experience and level of customer satisfaction. In this regard, and with the use of technological advancement in the banking and finance industries, prominent banks in Kuwait are also implementing multichannel contact centres in Kuwait to assist in the increasing of customer experience and overall levels of customer satisfaction. 

Fintech has already certainly disrupted banking and financial markets, and has yielded great strides in technological innovation, efficiency, and improved customer service offerings. Certainly, there has been a greater embrace by traditional type banks, and the incentives to continue to do so has only pushed Kuwaiti banks further to offer more innovative solutions on the back on ever increasing customer demand. 


Privatisation has also been a key trend. Who have been the major players in this area and how have they benefited from investing in Kuwait? 

Yes indeed, privatisation has been a key trend in Kuwait. There is a number of privatisation projects currently in the pipeline, whether under the Privatisation Law or the PPP Law. These projects primarily relate to infrastructure. 

Few privatisations took place in the past two years where foreign investors were the major players. This includes the privatization of Boursa Kuwait (previously known as the Kuwait Stock Exchange) which culminated with the sale by the Kuwait Capital Markets Authority of 44% of its shareholding held in the capital of Boursa Kuwait through a developed bidding process to an international consortium comprised of the Athens Stock Exchange, National Investments Company, Al Oula Investment and Arzan Financial Group.  

Another recent project where the private sector is participating in a public service/utility project is Umm Al Hayman Wastewater Treatment Plant which was awarded to a consortium comprised of WTE (a German company), and International Financial Advisors (a Kuwaiti company). Further additionally, there was the Kuwait International Airport Terminal 4 PPP project where the Directorate General of Civil Aviation signed an operations and management agreement with Incheon International Airport Corporation of Korea to operate Terminal 4 of Kuwait International Airport 

In such projects, foreign investors may benefit from incentives and exceptions provided under Kuwaiti laws, such as, possibility to own more than 49% of the shares of the local company, tax exemption/credit, customs exemption, long term concession contracts (up to 40 or even 50 years, depending on the type of the project), certain exceptions regarding employment of Kuwaiti citizens, etc.    

Given the continuing decline in oil prices and the acknowledgment of the benefits and need of the expertise available in the private sector, we believe the Kuwaiti government will continue to promote and support privatisation and public private partnership projects and as such, we hope that additional projects will be put on track the short to medium terms. 


The Covid-19 pandemic forced many firms to act and adapt quickly. What has this experience been like at your firm? Are there any changes implemented during this crisis that have become part of your long-term strategy? ie video conferencing, remote working etc. 

Lawyers have not traditionally been early adopters of all things technology, however, the effects and pressures which the Covid-19 pandemic presented could not be ignored. Simply put, law firms needed to quickly adapt to a new way of doing business. Some changes would be temporary, while others would be more permanent in nature. Ultimately, we believe that our clients will be the ultimate beneficiaries of technological change. 

We have consistently been monitoring the status of developments and the impact of the Covid-19 pandemic on our business in Kuwait and Bahrain. We quickly adjusted our business systems and processes to the extent necessary so as to minimise any potential disruption of service to our clients. We have been able to maintain working at our usual high standard while adapting some working practices, and implementing changes to in-person meeting and travel policies.  The safety and well-being of all ASAR lawyers and support staff has remained our primary priority throughout this time. Our firm has ensured that, where applicable, that our office in Kuwait and in Bahrain could be closed for a certain period of time due to local restrictions or advice and that during such time, that we could continue to service our clients by effectively leveraging our existing technology infrastructure. We also ensured that during any lockdown scenario, that all of our lawyers and key support staff were able to work from home using our secure information technology network, and with no interruption to client service. 

We also decided to avoid having any in-office meeting at our offices in an effort to keep clients, staff and other visitors as safe as possible from Covid-19 exposure. The hosting of and participating in office and/or client events and meetings in the foreseeable future is also being reviewed on a continuing basis. The norm now is to conduct all client meetings, seminars and events on virtual platforms. 

Insofar as international travel is concerned, ASAR has restricted international business travel to instances that are deemed to be business essentialASAR lawyers and staff are using call and video conferencing instead. 


Many law firms based in the UAE are somewhat active in the Kuwaiti market. How important is it to have local knowledge and a physical presence in the country? 

Having local knowledge, or at least access to high quality local knowledge, will always be of paramount importance when looking to service Kuwaiti clients from a jurisdiction outside of Kuwait (e.g., the UAE etc.). A physical presence in Kuwait will be required if the aim is to be in it for the long haul, i.e., where one wishes to be a Kuwait based law firm providing Kuwait law advice and to effectively nurture and develop longer lasting relationships with local clients. Absent having a physical presence in Kuwaitthen it is critical to have access to high quality local legal knowledge from a well-established and reputable law firm in Kuwait with impeccable credentialsWe would like to think that we are one such law firm.   


 The Kuwait legal market is dominated by domestic and regional firms. Why are there so few international firms and how are cross-border matters typically implemented? Are you part of any international alliances? Do you have strong relationships with certain firms outside of Kuwait? 

ASAR has always been fortunate enough to have long standing and good working relationships with a number of the leading international law firms, whether based in the US, Europe or in Asia. Indeed, having these strong and long standing good working relationships with various international law firms has been mutually beneficial to both ourselves as well as the international law firms themselves as we have immediate access to key lawyers in those international law firms across the world, and they too have access to our specialist legal expertise in Kuwait and Bahrain. All this ensures that we can efficiently and promptly service our respective clients and whilst also being safe in the knowledge that the quality of the legal advice being dispensed with is of the highest calibre.       

Amongst some of the potential reasons as to why international law firms have not have had as much success in taking a stronger and more longer lasting foothold in Kuwait, may have more to do with internal organizational and operational reasons rather than other factors. It is also somewhat more difficult for international law firms to make the relevant adjustment to adapt to a culture and society as unique as that of Kuwait. In particular, and sometimes somewhat uncomfortable for international law firms to do, they will need to often get comfortable in having to adapt their internal practices in navigating certain specific sensitivities when dealing with local clients such as for example, how one goes about agreeing on to charge for ones fees and time, the extent of the level of bureaucracy that one can expose local clients to, and which notwithstanding the fact that the subject matter of the legal assistance required may be the same, will need to nonetheless be adjusted depending on the nature of the client that one is dealing with. From a business practice and operations perspective, Kuwait certainly is not a one-glove-fits-all type of jurisdiction.  Flexibility, and the ability of quickly adapt to changing circumstances, is key. 


Kuwait is famous for its diplomacy, most recently acting as a mediator on the embargo between Qatar and other Gulf Nations. How does this neutral stance benefit Kuwait’s economy? 

Although there appears to be no near term end in sight to the Qatar embargo, it would appear that Qatar has adjusted remarkably well to the punitive measures imposed by the so-called “Arabian quartet” that is comprised of Saudi Arabia, the UAE, Bahrain and Egypt, which severed relations with Qatar in 2017. This has indeed left Kuwait (and Oman to a certain extent) caught in the middle so-to-speak as the traditional neutral territory in the Arabian peninsula. The current situation with Qatar is unfortunate and, generally speaking, as well as hurting the Qatari economy, is not a welcome economic state of affairs for the Gulf region.  

In terms of how Kuwait’s neutrality may (or may not) benefit Kuwait’s economy, it is important to note that in addition to being politically neutral, Kuwait also remains economically neutral, and does not seek to actively take economic advantage of Qatar’s current state of affairs. Yes, while there may (inevitably) have been some natural growth in increased trade with Qatar in compensating for the blockade with the Arabian quartet, it by no means has been a strategic decision of Kuwait to take advantage of the current impasse. Inevitably however, logistically activity between Kuwait and Qatar has increased and shipping firms have also taken advantage of the Kuwait port. Kuwait airways has also benefited from the airspace ban with Qatar Airways barred from the quartet’s airspace, and the quartet’s airline carriers being banned from Qatari airspace. 


Kuwait’s long-standing Emir Sabah Al-Ahmad Al-Jaber Al-Sabah passed away in 2020. Will there be any changes under its new leadership? What does the future hold for Kuwait? 

Given the recent passing of the late Emir Sabah Al-Ahmad Al-Jaber Al-Sabah and the current ongoing focus on matters related to the Covid-19 pandemic, it is still too soon to take a clear view on whether or not any material changes are on the horizon. The current Emir, Sheikh Nawaf Al-Ahmad Al-Sabah, shortly after his ascension requested that the existing cabinet remain in place until after the December 2020 parliamentary elections. This signalled a need for continuity during the transition period. Generally speaking, material shifts in policy are not expected in the short to medium term. Consistency has traditionally been key in Kuwait. Kuwait has always regarding itself as being somewhat unique amongst its neighbours in the Arabian Peninsula and while Kuwait’s foreign policy has been based on the late Emir’s vision of Kuwait role in the Middle East, its foreign policy has now become linked to Kuwait itself. Public opinion and domestic politics matter. The Kuwait-US relationship will likely remain stable, and in fact, may even be further strengthened under the incoming administration of President-elect Joe Biden.  

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