Execution of Penalty Clause in the Middle East

Abstract

Business with partners from countries belonging to different legal families is often connected with legal uncertainty. The present study, without claims for fundamentalism, attempts to shed light on the peculiarities of legal characteristics of penalty institute in the countries of the Islamic legal family. The article is not only aimed at scientists, but also possesses a strong practical meaning, and, therefore, will be useful for both "theoreticians" and those participating in business, working in the markets of the countries of the Middle East. The study questions the specifics of the application of the provisions of the Islamic Sharia. In particular those relating to the prohibition of interest (Riba). The question about the feasibility of the application of the doctrine of Riba to the penalty is studied. The author provides opinions and practice of state courts in the region, and international arbitral institutions. The author suggests a generic characteristic of penalty in the countries of the Middle East. He defines probable causes of formation of the Institute under study in its current form. In order for the penalty clause to be executed in the Middle East, the author provides particular recommendations for those participating in business activities.