Kuwait News Agency (KUNA) said that the second reading of the law was approved by a majority of 37 votes, and seven of the 42 representatives present were rejected.
The National Assembly account on Twitter quoted Minister of Trade and Industry Khaled Al-Roudhan as saying that the bankruptcy law “will contribute to strengthening the national economy … and the amendments submitted to it amounted to 102 amendments and lead to a more prudent law.”
The new law created two main ways out for troubled companies or defaulting traders, the first being preventive settlement with the agreement of the creditor and debtor, and the second finding a plan for restructuring before declaring bankruptcy, and even in the event of bankruptcy, the new law only punishes the corrupt bankrupt.
According to the old law issued forty years ago, stopping the payment of the debt means declaring bankruptcy, which requires the penalty of the bankrupt with imprisonment, travel ban and deprivation of his political rights, while the current law that stopped payment is not considered a criminal except in the case of fraud.
Many companies and businessmen have been affected during the past few months due to the Corona pandemic and the general isolation measures that it led to in the country.
Although the law has been deliberating in parliament committees for about a year, the circumstances imposed by the pandemic have made it more urgent today.
According to the report of the Parliamentary Financial and Economic Committee on the law, the Minister of Trade and Industry said that the new amendment brought a new philosophy, which is an attempt to help the debtor trader and pull him out of faltering in order to continue his trade or start over through several options, which are preventive settlement, restructuring, or bankruptcy.
The minister said that this amendment does not come only to protect the troubled merchant, “but to protect creditors.”
The law also attaches special importance to small enterprises and seeks to provide exceptional protection for them in case of default. Under this law, a special court for bankruptcy cases is being established to expedite the determination of cases.