Kuwait gives PAI authority to terminate contracts and withdraw commercial plots
. . . tightens rules on industrial and commercial plots under new ministerial decision; businesses face tougher plot enforcement measures
Kuwait has strengthened the enforcement powers of the Public Authority for Industry (PAI), authorizing its Board of Directors to terminate contracts and withdraw service, craft and commercial plots in cases where such administrative penalties are legally applicable.
The authority was granted under Ministerial Decision No. 23 of 2026, giving the PAI Board of Directors the power to take action against contracts and plots under its supervision in accordance with applicable laws, regulations and governing procedures.
The decision could have direct implications for businesses operating from PAI-supervised plots, particularly where contractual or regulatory requirements are not met. It establishes a clearer administrative mechanism for terminating contracts and recovering plots in cases prescribed by law.
Article One authorizes the PAI Board to impose the penalty of terminating contracts and withdrawing service, craft and commercial plots whenever the legally prescribed conditions for such action are met. The decision does not create a blanket withdrawal power. Any termination or withdrawal must be carried out in accordance with the rules, regulations and procedures governing the relevant plots and contracts,
Article Two states that the decision takes effect from the date of issuance and is to be published in the Official Gazette, with the The decision is based on Kuwait’s broader legal framework governing state property, industrial activity and the administration of service, craft and commercial sites.
Among the legislation cited are Decree-Law No. 105 of 1980 on the State Property System, as amended; Law No. 56 of 1996 concerning the Industry Law and its executive regulations; and Law No. 22 of 2009 approving the Unified Industrial Regulation System for GCC states.
It also draws on Decree-Law No. 116 of 1992 concerning administrative organization, the determination and delegation of powers, as well as Ministerial Resolution No. 32 of 2023, which sets rules governing service, craft and commercial plots supervised by the PAI.
The measure comes within the framework of protecting the public interest and reinforcing regulatory oversight of state-controlled industrial and commercial land. For businesses and investors, compliance with plot-use conditions, contractual obligations and applicable regulations remains essential to maintaining their operating sites.
