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Find out moreWelcome to the latest edition of Law Update titled “Rise of Generative AI.”
In this edition, we dive into the dynamic world of Technology, Media, and Telecommunications (TMT) across the Middle East and North Africa (MENA) region. TMT continues to play a vital role in positioning the region as an international business and social hub, driving significant growth and innovation.
Our focus in this Law Update is on the sector’s ongoing potential to advance and propel the region toward a more digital economy. We explore the benefits of embracing a digital transformation and how local authorities have responded by enhancing regulations to accommodate the evolving TMT landscape.
This edition covers a range of topics, including – the new Telecommunications & Information Technology Law in Saudi Arabia, the intricacies of trademarks in the Metaverse, and the legal challenges faced by the video game industry. Additionally, we take a regional perspective, discussing jurisdictions such as Kuwait, Saudi Arabia, UAE, Oman, and Bahrain to provide a comprehensive understanding of the TMT landscape.
We hope you thoroughly enjoy this packed issue of Law Update, filled with captivating articles that address key legal issues within a vital sector for the region.
Read the full editionEl Hassan Abdel Razek
October 2013
Local entities are in continuous need to expand their business and engage in new projects in order to keep pace with an ever growing competitive market. Naturally, these expansions and considerable growth are accompanied with a number of legal issues that may turn into legal disputes.
One of the main reasons for disputes is a default of payment and the subsequent rescheduling of the debt. Lending banks regularly come across an important question when entering into a rescheduling agreement with their borrowers – does a promise to give security over real estate assets give rise to any property rights over those assets in favor of the secured party?
Under Kuwaiti law a promise to give security over assets is considered a ‘promise to enter into a contract’. Under the Kuwait Civil Law, “a promise to enter into a contract” is an agreement between two or more parties according to which one party promises to execute a specific contract in favor of the other party (‘a Promise Agreement’).
The Kuwait Civil Law provides for specific formal requirements for the conclusion of a Promise Agreement:
As long as the formal requirements mentioned above have been met and satisfied with respect to the Promise Agreement, the promise will be considered as a contractual obligation. As such, any failure by the promising party with respect to the execution of the agreed upon contract is considered as a breach of a contractual obligation, entitling the counter party to claim for compensation for any damages and losses sustained as a result of the breach.
In this respect, a lender may be in a position to claim for damages arising out of the borrower’s failure to execute a pledge or mortgage on the asset. Nevertheless, a claimant must effectively prove the losses and damages sustained in order to be entitled for compensation.
In such cases, a lender may be in a position to file either of the following lawsuits before Kuwaiti Courts:
Generally it can be said that in the event the court establishes that specific performance (i.e. the execution or perfection of a mortgage) by the defendant is practically impossible for any reason, the court will likely consider an equivalent payment plus compensation. The compensation under Kuwait Law is calculated according to the damages suffered and loss of profits.
Finally, the statute of limitations to file a lawsuit for any breach of contract, under Kuwait Law and with respect to a Promise Agreement, is 15 years.
In the future, we will discuss how a Promise Agreement may vary on a case by case basis.
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