STIPULATIO POENAE IN THE MIDDLE EASTERN LAW - PROBLEM OF ENFORCEMENT OF CONVENTIONAL PENALTY
STIPULATIO POENAE IN THE MIDDLE EASTERN LAW - PROBLEM OF ENFORCEMENT OF CONVENTIONAL PENALTY

Summary/Abstract: Stipulatio poenae is an institute of the Roman law corresponding to penalty clauses and liquidated damages in the countries of the Middle East. Originated in the ancient roman law, it was adopted into the Egyptian Civil Code of 1948 via French Civil Code of 1804, and the an diffused to most of the countries of the Middle East. Although initially permitted unlimited conventional penalties, the Roman (or Continental-European) law slowly restricted the contractual liberty of the parties in this regard. The institute of reduction of the conventional penalty/liquidated damages by the discretional power of judge became commonly accepted. Islamic Law, at the other hand, similarly like Common (Anglo-American) law, had negative stance on the conventional penalties. But with a more flexible approach being adopted, the development went into exactly the different direction than in the Continental-European countries. Consequently, the institutes of liquidated damages in the modern Middle Eastern and Common law legislations on one side, and their Continental-European counterparts in the form of penalty clauses on the other, are becoming more and more similar.

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