Exclusivity In Distribution And Agency Arrangements In Kuwait

Two bodies of law govern exclusivity in Kuwaiti distribution and agency arrangements. The Commercial Agency Law liberalized the distribution regime by abolishing statutory exclusivity and allowing parties greater contractual freedom in structuring their commercial relationships. The Competition Law, however, places limits on how that freedom may be exercised by prohibiting contractual arrangements that prevent, restrict or distort competition. Understanding how these two regimes interact—and how the Competition Law qualifies the contractual freedom afforded under the Commercial Agency Law—is essential for any principal seeking to structure a distribution arrangement in Kuwait.

Kuwait's Commercial Agency Law, Law 13/2016 (Agency Law), among other changes abolished mandatory exclusivity in distribution and agency arrangements. Under the prior law, agents and distributors benefited from statutory exclusivity—goods and services could only be distributed through the appointed agent or