Cap. 16 · Civil Code (Cap. 16)
Cap. 16 Art. 1724Effect of penalty clause.
Sub-title 3 - Issues relating to parental authority
(1) A penalty clause stipulated in a contract of compromise against the party who fails to fulfil the compromise, shall be in lieu of compensation for any damage caused by delay, without prejudice to the obligation to fulfil the compromise, saving the provisions of article 1119 in case the contract is annulled.
(2) If the contract of compromise is impeached on the ground of nullity, the payment of the penalty is suspended, pending the suit.
(3) The provisions of this article shall apply to arbitration agreements which contain a penalty clause.