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

Kuwaiti companies being issuers of bonds that are due for redemption are presently under duress given that the local securities and real estate markets have turned sour due to the global financial crisis.

In light of the recent global financial crisis, it is imperative for Kuwaiti investment companies that are likely to default on their debt obligations to adopt restructuring measures to rectify their financial situation and treat their financial problems, particularly by rescheduling their liabilities and refinancing their debts.

The Judge-in-Chief of the Enforcement Department may conduct a summary investigation of any imprisonment application filed by the creditor. He may also allow the debtor a grace period not exceeding one month to perform the debt obligation.