Ministry of Commerce and Industry Resolution No. 81 of 2021 Issuing the Executive Regulations of Law No. 71 of 2020 Promulgating the Bankruptcy Law

Ministry of Commerce and Industry Resolution No. 81 of 2021
Issuing the Executive Regulations of Law No. 71 of 2020 Promulgating the Bankruptcy Law

Article One

The provisions of the Executive Regulations of the Bankruptcy Law promulgated by Law No. 71 of 2020, the texts of which are attached to this Resolution, shall be applied.

Article Two

This Resolution shall be published in the Official Gazette and shall come into force from the date of its publication.

Executive Regulations

Part One – Definitions

Article 1

The words and expressions used in these Regulations shall have the meanings assigned to them in Bankruptcy Law No. 71 of 2020, and the following words and expressions shall have the meaning set out opposite each of them, unless the context requires otherwise.
The Law: Law No. 71 of 2020 Promulgating the Bankruptcy Law.
The Regulations: the Executive Regulations of Law No. 71 of 2020 Promulgating the Bankruptcy Law.

Part Two – General Provisions

Chapter One – The Bankruptcy Court

Remuneration of the Auditors Assisting the Bankruptcy Court

Article 2

The auditors assisting the Bankruptcy Court, as provided for in Article (4) of the Law, shall be entitled to an annual remuneration paid to them during March of each year for their performance during all or part of the preceding year. The Board of Commissioners of the Authority shall issue a resolution determining that remuneration in the light of the reports submitted by the auditors at the end of December of each year and approved by the Bankruptcy Department, regarding the work assigned to them by the Bankruptcy Court during the year concerned and the work they performed during it.
The Ministry of Finance shall transfer the amount of the remuneration to the Authority, which shall pay it to the auditors.

Chapter Two – Opening of Proceedings

Submission of Applications

Application by the Debtor

Article 3

The debtor may submit to the Bankruptcy Department an application to open preventive settlement, restructuring or declaration of bankruptcy proceedings within a maximum period of two months from the date of cessation of payments, or from the date on which a deficit in its financial position occurred, or from the date on which information became available to it indicating that it is likely to be unable to pay its debts when they fall due or that a deficit will occur in its financial position, all of the foregoing on condition that the indebtedness which the debtor has ceased, or expects to cease, to pay is not less than (KWD 10,000) ten thousand Kuwaiti dinars, and also on condition that the amount of the actual or expected deficit in the financial position is not less than the said amount, unless any of the creditors or the Regulatory Authorities has submitted an application to open the proceedings within the said period. The amount provided for in the preceding paragraph shall, for the entities set out in the following table, be as set out opposite each of these entities:

Entity	Amount
Kuwaiti banks and branches of foreign banks	As determined by the Central Bank of Kuwait
Finance companies, exchange companies and other units subject to the supervision of the Central Bank of Kuwait	As determined by the Central Bank of Kuwait
Exchanges and clearing agencies	Value of the minimum for an application to open bankruptcy proceedings – Value of paid-up capital × 50%
Persons licensed by the Authority other than exchanges and clearing agencies and other than entities subject to the supervision of the Central Bank of Kuwait	Minimum capital 20% × paid-up capital 5% × whichever is higher × (risk factor according to the company’s licences and activities)
Insurance company	As determined by the Insurance Regulatory Unit

* Amended by Ministerial Resolution No. 31 of 2022 (Kuwait Al-Youm, Issue No. 1578, 27 March 2022).

Application by the Creditor

Article 4

A creditor holding an ordinary debt of not less than (KWD 20,000/-) twenty thousand Kuwaiti dinars, or a group of not less than three creditors holding an ordinary debt of not less than (KWD 10,000/-) ten thousand Kuwaiti dinars, may submit an application to open restructuring or declaration of bankruptcy proceedings in respect of the debtor owing that amount.
The provision of the preceding paragraph shall apply to creditors whose debts are secured by a pledge over the debtor’s business or by an assignment of the right to the cash flows arising from the debtor’s assets or business. It shall also apply to creditors whose debts are secured by a pledge or a lien, on condition that the value of the collateral securing their rights on the date of submission of the application is less than the amount of the debtor’s indebtedness to the creditor submitting the application alone, or to the group of creditors submitting the application together, by a difference of not less than the amounts set out in the preceding paragraph for the individual creditor and for the creditors together.
The amount provided for in the first and second paragraphs of this Article, whether for the creditor or for the group of creditors, shall, for the entities set out in the table contained in Article (3) of these Regulations, be as set out opposite each of these entities in that table.

Application by the Regulatory Authority

Article 5

The Regulatory Authority may submit an application to open restructuring or declaration of bankruptcy proceedings in respect of any debtor subject to its supervision, on condition that it submits evidence that the debtor is in a state of cessation of payments or in a state of deficit in its financial position, or that it expects the debtor to be in either of these two states within a period not exceeding one year, and on condition that it addresses the debtor and gives it an opportunity to respond within a period not exceeding one month, provided that the debt which the debtor has ceased, or is expected to cease, to pay, or the amount of the actual or expected deficit in the financial position, is not less than the amounts set out opposite each entity in the table contained in Article (3) of these Regulations.

Application Fees, Expenses and Guarantee

Article 6

Except for applications submitted by the Regulatory Authorities, the applicant shall deposit with the court treasury a sum of money or a bank guarantee within the limit of the equivalent of 0.5% (one half of one per cent) of the amounts which the debtor has ceased, or is expected to cease, to pay, where the application is submitted by the debtor. Where the reason for submitting the application is the deficit in the financial position, the amount or guarantee shall be within the limit of 0.5% (one half of one per cent) of the value of the actual or expected deficit in the financial position. Where the application is submitted by the creditor, the amount or guarantee shall be within the limit of the equivalent of 0.5% (one half of one per cent) of the creditor’s debt which the debtor has ceased to pay, or 0.5% (one half of one per cent) of the value of the deficit in the collateral where the application is submitted by reason of the deficit in the collateral.
Where more than one reason exists for the debtor or the creditor to submit an application to open the proceedings, the amount or guarantee shall be assessed on the basis of the reason of the lowest value.
The Head of the Bankruptcy Department may decide that an amount be deposited or a guarantee be provided of a value lower than that stated in the preceding paragraph, as he deems appropriate in this regard.
The deposit shall be made in the manner and on the date determined by the Bankruptcy Department, and the amount deposited or the guarantee shall be used to cover the expenses and costs of the preliminary procedures for taking a decision on the application, provided that the amounts paid by the creditor are added to the amount of the debtor’s indebtedness to it if the application submitted by that creditor to open the proceedings is accepted.
The Head of the Bankruptcy Department may postpone the deposit of the amount or guarantee referred to in this Article where the applicant is the debtor and it does not have the liquidity necessary for the deposit on the date of submission of the application, or where the preliminary procedures will not require any costs.

Article 7

Except for applications submitted by the Regulatory Authorities, a fee shall be imposed on applications to open preventive settlement, restructuring or declaration of bankruptcy proceedings at the rate of 0.5% (one half of one per cent) of the value of the indebtedness which the debtor has ceased, or is expected to cease, to pay, where the application is submitted by the debtor, and the fee shall be collected from the debtor upon submission of the application. The fee shall be at the rate of 0.5% (one half of one per cent) of the value of the actual or expected deficit in the financial position where the application is submitted by the debtor by reason of the deficit in the financial position. Where the application is submitted by the creditor, the fee shall be at the rate of 0.5% (one half of one per cent) of the creditor’s debt which the debtor has ceased to pay, or 0.5% (one half of one per cent) of the value of the deficit in the collateral where the application is submitted by reason of the deficit in the collateral, and the fee shall be collected from the creditor upon submission of the application, provided that the fees paid by the creditor are added to the amount of the debtor’s indebtedness to it if the application submitted by that creditor to open the proceedings is accepted.
Where more than one reason exists for the debtor or the creditor to submit an application to open the proceedings, the fee shall be assessed on the basis of the reason of the lowest value.
A fixed fee of (KWD 1,000/-) one thousand Kuwaiti dinars shall be imposed on applications for judicial composition, and on actions, grievances or appeals submitted in accordance with the provisions of the Law.
The Head of the Bankruptcy Department may postpone the deposit of the fee referred to in this Article where the applicant is the debtor and it does not have the liquidity necessary for the deposit on the date of submission of the application.

Chapter Three – Notifications

The Electronic Data Room

Article 8

Electronic data rooms shall be established by a decision of the Minister of Justice at the Bankruptcy Department and subject to its supervision. Each application submitted in accordance with the provisions of the Law shall be allocated an electronic data room with a number distinguishing it from others, through which the applications, memoranda, reports, decisions and all actions taken on the applications shall be filed, and through which notifications shall be made and documents, information and data submitted, so that the persons concerned may access it via the internet using the username and password issued by the Bankruptcy Department to the person wishing to send the notification or submitting the documents, information and data. The person to whom the notification is to be sent, or who is to be provided with the documents, information and data, or who is entitled to inspect them, shall receive that notification and inspect those documents, data and information using the username and password issued to him by the Bankruptcy Department.

Article 9

The decision issued by the Minister of Justice establishing the electronic data rooms shall set out the rules for their operation, the procedures for granting access rights, and the persons entitled to access them other than the debtor, the creditors and their lawyers.

Article 10

The entity responsible for establishing the electronic data room shall issue a written guide explaining the mechanisms for operating the electronic data room and the procedures for creating, cancelling or restricting the rights of a username and password, and the manner of filing documents, data, information and notifications in the room and arranging them in a way that makes it easy to grasp the contents of the room. It shall undertake that the notifications, documents, information and data that will be handled through the electronic data room will be handled in accordance with the best electronic protection and confidentiality rules in force at the time the undertaking is given, so that they may be accessed only by the persons authorised to enter the room. It shall also undertake that the application provides a feature for sending an immediate alert by e-mail to all persons granted access rights to the room of any notifications, documents, information or data handled through the room.

Part Three – Preventive Settlement

Approval of the Preventive Settlement Proposal

Article 11

Subject to the provisions of the Law regarding the approval of the preventive settlement proposal, the provisions set out in the following Articles shall apply to the meeting.

Article 12

The person who chaired the meeting shall prepare minutes of the proceedings of the meeting for voting on the preventive settlement proposal, to be signed by him and by the debtor, if the debtor was not the one who chaired the meeting, and by the creditors present who are entitled to vote, and by the representative of the Creditors’ Committee. If any of the creditors refuses to sign, his name and the reason for his refusal shall be stated.

Article 13

Where the meeting is held by means of modern communication, there shall be a complete audio and video recording of the proceedings of the meeting, and a copy of the recording of the proceedings of the meeting shall be delivered to the Bankruptcy Department on a portable memory “Flash Memory” or sent to it as an attachment to an e-mail message together with the notification provided for in Article (81) of the Law. The Bankruptcy Department shall notify the debtor, the Supervisor if appointed, the creditors and the Bankruptcy Committee, if the indebtedness is subject to its supervision, of the copy of the recording of the proceedings of the meeting within three working days from the date of its receipt of that copy.

Article 14

Without prejudice to the right of the entities that are required to be invited to the meeting in accordance with Article (76) of the Law to attend the meeting, the Supervisor, if appointed, shall attend the meeting held by means of modern communication. Where no Supervisor has been appointed, a representative of the Creditors’ Committee or a representative of the Bankruptcy Committee, where the indebtedness is subject to its supervision, shall attend the meeting.
The person who chaired the meeting referred to in the preceding paragraph shall prepare minutes of the proceedings of the meeting. It may suffice for those minutes to be signed by the person who chaired the meeting and by the debtor, if the debtor was not the one who chaired the meeting, in addition to the Supervisor if one has been appointed and attended the meeting; or for them to be signed by the debtor and the representative of the Creditors’ Committee, or by the debtor and the representative of the Bankruptcy Committee, or by the representative of the Bankruptcy Committee and the person attending on behalf of the Regulatory Authority.

Article 15

The minutes of the meeting shall include a statement of the place of the meeting, the time the meeting started and the time it ended, the person who chaired the meeting and those present, and, where the person attending was authorised on behalf of another, proof of his capacity to attend; each creditor who attended the meeting and the amount of his debt, whether he is among the affected creditors or not, and the ratio of his debt to the remaining debts of the affected creditors and to the total debts. The minutes shall also include the proceedings of the meeting, provided that they contain the following:
1- A statement of the resolutions voted on at the meeting and the result of the vote on each of them in terms of whether or not the approval quorum was achieved.
2- A statement of the percentage of creditors who voted in favour of each resolution, the percentage of those who voted against it and the percentage of those who abstained from voting.
3- A statement of all objections raised by those present, orally and in writing.

Part Four – Restructuring

Chapter One – Effects of the Decision to Open Restructuring Proceedings

Management of the Debtor’s Assets and Business

Article 16

The debtor shall notify the Trustee in advance of the following acts and transactions at least three working days before carrying them out:
1- Applying to obtain financing.
2- Concluding a new insurance contract that gives rise to a significant obligation on it.
3- Providing a guarantee to third parties or renewing it.
4- Changing any registered seat or office of the debtor.
5- Appointing an agent to act on its behalf, except where this is within the debtor’s conduct of its business in the ordinary manner.

Article 17

The debtor shall obtain the written approval of the Trustee, even if by e-mail, before carrying out any of the following acts and transactions:
1- Providing a guarantee to third parties or renewing it.
2- Paying debts, whether due or before they fall due.
3- Establishing a subsidiary company or purchasing quotas or shares in another company.
4- Transferring ownership of all or part of its business or assets outside the scope of the conduct of its ordinary business.
5- Waiving any judicial claim or entering into any financial settlement.

Chapter Two – Approval of the Restructuring Plan

Article 18

Subject to the provisions of the Law regarding the approval and ratification of the restructuring plan, the provisions of Article (14) of these Regulations shall apply to the meeting held to approve the restructuring plan, and the provisions of the following Articles shall also apply to it.

Article 19

The person who chaired the meeting shall prepare minutes of the proceedings of the meeting for voting on the restructuring plan, to be signed by him and by the debtor, if the debtor was not the one who chaired the meeting, and by the Trustee and the creditors present who are entitled to vote. If any of the creditors refuses to sign, his name and the reason for his refusal shall be stated.

Article 20

The text of Article (12) of these Regulations shall apply to the meeting for voting on the restructuring plan held by means of modern communication. The Bankruptcy Department shall notify the debtor, the Trustee, the creditors and the Bankruptcy Committee, if the indebtedness is subject to its supervision or if it chaired the meeting, of the copy of the recording of the proceedings of the meeting within three working days from the date of its receipt of that copy.

Article 21

Without prejudice to the right of the entities that are required to be invited to the meeting in accordance with Article (123) of the Law to attend the meeting, the Trustee shall attend the meeting held by means of modern communication. The person who chaired the meeting held by means of modern communication shall prepare minutes of the proceedings of the meeting, and it may suffice for those minutes to be signed by the debtor and the Trustee, or by the Trustee and the chairman of the meeting if the chairman of the meeting is a person other than the Trustee, or by the Trustee and the person attending on behalf of the Regulatory Authority.

Part Five – Declaration of Bankruptcy

Liquidation and Distribution

Approval of the Liquidation and Distribution Plan

Chapter One – Conditions and Procedures for the Sale of the Debtor’s Assets by Auction

Article 22

Subject to the provisions of the Law concerning the approval of the liquidation and distribution plan, the provisions set out in the following Articles shall apply to the sale of the debtor’s assets by auction.

Sale of Securities

Article 23

Securities, and the dividends, returns and rights due from issuers, obligors, the clearing agency and others, as provided for in Article (10-20) of Module Eleven of the Executive Regulations of the Authority’s Law, shall be sold through a broker or an investment portfolio manager appointed by the Trustee. The sale shall take place in accordance with the procedures applicable at the Exchange and the clearing agency regarding trading in securities, and the Exchange may subject the sale process to such of the provisions set out in Chapter Ten of Module Eleven of the Executive Regulations of the Authority’s Law and Appendix No. (10) to that Module as it deems appropriate.

Sale of Other Assets

Article 24

Except for the assets provided for in Article (22) of these Regulations, the assets which it is decided to sell by auction shall be valued by one of the asset valuers licensed by the Authority. The Trustee shall determine the base price in the light of the price of the asset stated in the asset valuer’s report. If the valuer has set a minimum and a maximum price, the base price may be the minimum price, the average of the minimum and the maximum, or any other price that the Trustee deems appropriate exceeding the minimum.

Article 25

The Trustee shall set the conditions of sale in a manner appropriate to the asset to be sold. Those conditions may include dates for inspection, procedures for receiving and answering enquiries, and an electronic data room containing all the reports, information and data customarily made available to those wishing to purchase this type of asset. The conditions of sale may also require those wishing to purchase to sign declarations undertaking to maintain confidentiality, or may provide for the prior signature, by those taking part in the auction, of the contracts and agreements transferring ownership of the item sold. Entry to the auction may also be made conditional on the bidder providing a financial guarantee issued by an accredited bank or paying an advance payment of the price of the asset to be sold.
The conditions of the auction shall take into account the provision of the greatest possible degree of transparency, and the auction may be electronic in accordance with the procedures set by the Trustee in this regard.

Article 26

The auction shall be announced at least fifteen days before the date set for the auction in one of the daily newspapers published in Arabic. The Trustee may, as he deems appropriate, publish the announcement of the sale in one of the newspapers published in a foreign language, and he may also publish the announcement in foreign newspapers.

Article 27

The auction shall begin at the place and time set for it upon the Trustee’s announcement of the start of the auction, and the Trustee shall conduct the auction on the day set for the sale.
If no purchaser comes forward at the sale session, the sale shall be postponed to the following working day at the same place with a reduction of five per cent of the base price. If no purchaser comes forward at the second sale session, the sale shall be postponed to the following working day, and so on, with the price reduced by five per cent each time. It shall be sufficient, to announce the continuation or postponement of the sale, that this be stated publicly and recorded in the sale minutes. If the total reduction reaches twenty-five per cent, the sale shall be postponed for one month and the announcement procedures repeated, and in this case the asset shall be sold to the highest bid, whatever its value.
If, however, one or more purchasers come forward at the sale session, the Trustee shall approve the highest bid, and a bid that is not exceeded within five minutes shall be deemed to end the auction.

Article 28

The person whose bid the Trustee approves shall deposit, within five working days from the sale session, the full approved price, the expenses and the registration fees, and in this case the Bankruptcy Judge shall issue a decision awarding the auction to him.
If the person whose bid the Trustee approved does not deposit the full price within the period set out in the preceding paragraph, the auction procedures shall be repeated for his account on the basis of the price at which the auction was awarded, and no bid that is not accompanied by a deposit of its full value shall be considered. In all cases, the submission of a letter of guarantee or a cheque certified by one of the banks shall take the place of the deposit.
If the person required to make the deposit is a creditor and the amount and rank of his debt justify his exemption from the deposit, the Bankruptcy Judge shall exempt him from depositing all or part of the price and expenses that he is required to deposit.
The defaulting bidder shall be liable for any shortfall in the price of the item sold, and the decision awarding the auction shall include an order obliging the defaulting bidder to pay the price difference, if any, and he shall have no right to any increase. The Trustee shall recover the price difference from the value of the guarantee provided by him or the advance payment of the price paid by him, and shall claim from him any amounts remaining, if any. The conditions of sale may in no case whatsoever contain anything contrary to this.

Article 29

The Trustee shall record in the sale minutes all the sale procedures, any objections and obstacles encountered and the action he took in respect of them. He shall also record the attendance or absence of the debtor and the creditors, and their signatures if they attended, or their refusal to sign.
The Trustee shall also record – in the minutes – the names of the bidders, the domicile and place of work of each of them, the price offered by each of them, and their signatures or their refusal to sign.
The minutes shall in particular include a statement of the final price at which the auction was awarded, and the name, domicile, place of work and signature of the person to whom it was awarded.

Chapter Two – Provisions for Submitting Bids in Sealed Envelopes

Article 30

The Trustee shall set the conditions for the sale of assets by submitting bids in sealed envelopes as set out in the text of Article (24) of these Regulations, and the sale shall be announced as provided for in the text of Article (25) of these Regulations. The announcement shall include a statement of the address to which the envelopes containing the bids and the envelopes of the documents supporting the bid are to be sent, the address at which the Bids Box is located and the manner of delivering the document envelopes by hand. It shall also include the start and end of the period for receiving bids, the date for opening the envelopes, the date for holding the auction between the holders of equal bids, and any other conditions that the Trustee sees fit to include in the announcement.

Article 31

The provisions set out in the Annex attached to these Regulations concerning the provisions for submitting bids in sealed envelopes shall apply to sale by submitting bids in sealed envelopes.

Annex to the Executive Regulations of the Bankruptcy Law on the Provisions for Submitting Bids in Sealed Envelopes as One of the Methods of Selling the Debtor’s Assets by Auction

First: Submission of Bids:

1- A box shall be allocated for the submission of bids (hereinafter referred to as the “Bids Box”) and shall be placed at the location determined and announced by the Trustee.
2- The financial Bids Box shall have two locks, the key to one of which shall be held by the Trustee and the other by the Bankruptcy Committee, even if the debtor is not subject to its supervision. The Bids Box shall be opened only on the date set for opening the envelopes.
3- Bids shall be submitted within the announced period.
4- Financial bids shall be submitted by registered post, by recognised international post or by hand, to the address announced by the Trustee. Where a bid is submitted by hand, it shall be submitted by depositing it in the Bids Box.
5- The Trustee may accept the receipt of bids that arrive after the end of the period for submitting financial bids, provided that they are received before the envelopes are opened.
6- If the Trustee has prepared a form for submitting bids, the bids shall be submitted on the form prepared by the Trustee for this purpose, provided that the information entered in the form is limited to what is required under the auction provisions.
7- Bids shall be submitted in a tightly sealed envelope without stating the name of the sender or placing any sign or mark identifying him, and the bid envelope shall be addressed to the address determined by the Trustee. The bid envelope shall contain only the bid and the financial guarantee.
8- Bids shall be signed by a person having the authority to represent the bidder, and the document evidencing this shall be submitted inside the envelope of supporting documents.
9- The documents relating to the bidder, such as company contracts and their amendments and all documents relating to incorporation such as the commercial licence, the commercial registration certificate, the certificate of authorised signatories, civil IDs, passports, powers of attorney and authorisations, shall be submitted in a separate, tightly sealed envelope without stating the name of the sender or placing any sign or mark identifying him, and the envelope shall be addressed to the aforementioned address. The words “Supporting Documents” shall be printed on the envelope (hereinafter referred to as the “Supporting Documents”). The envelope of supporting documents shall be submitted in the Bids Box, unless the envelope is larger than the opening of the box, in which case the envelope shall be delivered by hand to the person designated by the Trustee. The envelopes of supporting documents shall be opened on the same date as the bid envelopes.
10- The financial bid shall include the price offered, and the amounts shall be written in figures and in words. The price offered shall not be less than the base price, failing which the bid shall be excluded, unless the auction conditions provide for awarding to the highest price.
11- The price offered shall be submitted in Kuwaiti dinars or any other currency determined by the Trustee.
12- Erasures and deletions in the details of the financial bid shall be rejected, unless the Trustee decides otherwise. In this case, the Trustee may accept the correction if the deletion is made with a single line and the bidder signs next to it.
13- The financial bid shall be final, unconditional and irrevocable, and shall be deemed – upon its mere submission – an irrevocable offer to purchase the asset to be sold.
14- The financial bidder may not cancel or amend any of the conditions stated in the bid submission form, if there is a form.
15- Where a bidder submits more than one bid during the period for submitting financial bids, the bid with the highest price shall be considered.

Second: Opening of Envelopes:

1- The Bids Box shall be opened by the Trustee and a representative of the Bankruptcy Committee at the time set for that purpose by the Trustee.
2- The debtor, the representatives of the creditors, the representatives of the bidders and any other persons whom the Trustee decides to invite may attend the opening of the envelopes and the award of the auction. If any of the said persons does not attend, this shall be stated in the auction award minutes, and the non-attendance of any of these persons shall not affect the procedures for opening the envelopes.
3- The envelopes shall be opened by the Trustee after verifying that the envelopes are tightly sealed.
4- The Trustee shall transcribe the financial bids onto the form prepared for that purpose (hereinafter referred to as the “Bid Tabulation Sheet”) and shall sign the sheet to indicate that it has been checked and reviewed. It shall be verified that the envelopes were submitted within the bid submission period and that the bids and envelopes submitted meet the conditions specified in the auction provisions. The bids shall be ranked according to the order in which they were opened.
5- The Trustee may seek the assistance of whomever he deems appropriate to assist and verify in the process of opening the envelopes.
6- The Trustee shall prepare auction award minutes setting out the award procedures, the names of the bidders and the price offered, and attaching the Bid Tabulation Sheet, provided that the minutes are approved by the Trustee, the representative of the Bankruptcy Committee and those present of the debtor, the creditors and the Winning Bidder if present. Any reservations that the persons concerned may request to be recorded shall be recorded in the minutes, as shall the refusal of anyone who refuses to sign and the reason for it. The signature of the minutes by the Trustee and the representative of the Bankruptcy Committee shall be sufficient for their validity.
7- The Trustee shall read aloud each price offered for the purchase as stated in the bid, and shall announce the bid with the highest price.

Third: Approval of the Bid:

1- The Trustee shall approve the bid with the highest price (hereinafter referred to as the “Winning Bidder”), and the Trustee shall then announce the name of the Winning Bidder.
2- Where the amount in figures differs from the amount in words, the higher amount shall prevail, all of the foregoing unless the difference between the stated values reaches 5% of the base price, in which case the bid shall be excluded unless the Bankruptcy Judge decides to accept it on the basis of the higher amount.
3- The Trustee may accept bids containing reservations, provided that the bidder agrees to withdraw his reservations and to comply with the auction provisions by a letter addressed to the Trustee to that effect at the envelope-opening session.
4- The Bankruptcy Judge may exclude or accept envelopes or financial bids that do not meet all or some of the conditions specified for them, if he considers that the deficiency in the bid does not undermine the principle of transparency or fairness among the competitors.

Fourth: Equal Bids

1- Where the highest prices are equal between two or more accepted bids, the Trustee may, after the approval of the Bankruptcy Judge, invite the holders of the equal financial bids to a public auction among them in the presence of a representative of the Bankruptcy Committee, even if the indebtedness is not subject to its supervision, and of those of the debtor or the creditors who wish to attend, provided that this auction is held at the time determined by the Trustee [the Authority], in accordance with the following procedures:
· The price stated in the equal bids shall be the base price for the start of the auction.
· The bidder earliest in the order of opening of the envelopes shall have the right to start the public auction first (hereinafter referred to as the “First Bidder”). If he does not bid within five minutes from the start of the auction, the next bidder in order shall have the right to start the auction, and if he does not bid within five minutes, the next bidder shall become the First Bidder, and so on.
· The bid with the highest price shall be approved if five minutes pass after it is made without any of the bidders making a higher bid.
· After the Winning Bidder is announced, the provisions of item “Seventh” of this Annex shall apply.
1- The Bankruptcy Judge may – instead of following the procedures referred to in the preceding paragraph – decide to repeat the auction among the holders of the highest equal financial bids within the time limits he determines and notifies to the persons concerned. This auction shall be subject to the same provisions prescribed for the original auction or as determined by the Bankruptcy Judge, provided that the price offered in the equal financial bids shall be the base price.
2- If the liquidation and distribution plan provides for equal bids to be dealt with in accordance with the procedures set out above, they shall be applied without the need to obtain the Bankruptcy Judge’s approval again.

Fifth: Single Bid

1- A bid shall be deemed a single bid even if other bids are received with it that do not conform to the auction provisions or that contain reservations rendering them invalid.
2- Where a single bid is received, the Trustee may decide not to open the envelope of that bid and to repeat the auction process in accordance with the same auction provisions prescribed for the original auction within the time limits determined by the Trustee, the holder of the single bid being deemed a participant in the repeated auction. The single bidder may submit another bid for the repeated auction or rely on his previous bid. If no other bidders come forward, the envelope of the single bidder shall be considered; and if the single bidder has submitted another offer, the envelope containing the highest price shall be considered, and the award shall be made to it if it meets the auction provisions.
3- The Trustee may, in the case referred to in the preceding paragraph, decide to approve the single bid if he considers that no benefit is to be expected from repeating the auction, provided that the reasons on which he relied in accepting the single bid are recorded in the minutes.
4- After the Winning Bidder is announced, the provision of item “Seventh” of this Annex shall apply.

Sixth: No Bids Submitted

Where no bids are submitted, the Trustee may, after the approval of the Bankruptcy Judge, take one of the following actions:
· Cancel the auction and hold it again under the same auction provisions prescribed for the original auction; or
· Amend part or all of the auction provisions and repeat the auction; or
· Any other procedures that he deems appropriate.

Seventh: Payment of the Balance of the Price, Expenses and Registration Fees, and Award of the Auction:

The provisions set out in Article (27) of the Executive Regulations of the Bankruptcy Law shall apply to the payment of the full price, the expenses and the registration fees, to the award of the auction, and to default in paying the balance of the price.

Issued on 15 April 2021 and published in the Official Gazette Kuwait Al-Youm on 25 April 2021.