Clifford Chance

Landmark UK Supreme Court Decision on Penalties – No Change in Hong Kong (yet)

18 November 2015

Cavendish Square Holding BV v Talal El Makdessi and ParkingEye Limited v Beavis [2015] UKSC 67

The UK Supreme Court has confirmed that the centuries-old doctrine of penalties still has a place in the modern commercial world of contracts, in spite of calls for its abolition, but revised the test as to when a sum stated in a contract might be considered a "penalty". Until the Courts in Hong Kong choose to revisit the topic, however, the existing principles will continue to apply.

 

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