Kuwait Considers New Insolvency Legislation

Kuwait is now considering a new law that will bring its bankruptcy and insolvency legal regime closer to Chapter 11 of Title 11 of the United States Bankruptcy Code.

The proposed Law on Bankruptcy (the "Draft Law") is currently being reviewed by the Department of Legal Opinions & Legislation of the State of Kuwait.

In certain jurisdictions, the bankruptcy process is one in which a debtor may have the option to obtain economic relief from the burden of debt so that it may continue its business, such as the case under the US legal system. On the other hand, certain other jurisdictions emphasize the protection of creditors and emphasize liquidation rather than the restructuring of the debtor entity.  The current bankruptcy regime in Kuwait falls under the latter category.