A significant legal development, Law No. 65 of 2025 was published on 11 May 2025 (to take effect one month thereafter) introducing new provisions on the possible imprisonment of debtors (and those who collude with them) who willfully refrain from settling debts confirmed due and payable by the Court.

The legislation should serve as a deterrent to debtors’ trying to avoid payment of debts owed to third parties and will facilitate the enforcement of final judgments.

Main Highlights:

• A debtor may face up to 3 years in prison and/or a fine of up to KD 5,000 for concealing or disposing of his assets to avoid payment of debts adjudged payable by the Court.

This penalty can also be applied to a person who colludes with the debtor to hide his assets.

• Debtors who dispose of assets or rights for less than their market value by a significant margin, with the intent to avoid payment of debts adjudged payable by the Court, are subject to imprisonment for up to two years and/or a fine of KD 3,000.
• The criminal liability shall lapse at any stage if the debt is paid.   If settlement of the debt occurs after the debtor is convicted, the Court may suspend the sentence imposed on the debtor.

Notably, the new legislation does not address how the imprisonment sanction may apply in circumstances where a corporate entity defaults on payment of its debts. This bears further consideration. In all events, concerned companies are advised to obtain legal advice as to whether this new legislation would be applied to their managers/directors (i.e. by reference to other laws and regulations).