Affiliation: Doctoral student at the School of Law, Caucasus University; Invited lecturer at Caucasus University, Lawyer in Civil and Administrative Law, Member of the Association of Authors’ Rights and Georgian Bar Association, Chief specialist at the Commi1ee on Education and Culture of Tbilisi City Municipal Assembly
Abstract: The present article reviews the Penalty as an additional claim securing tool that has been adopted in private or public-legal relations and nowadays, it is characteristic to the laws of all countries belonging to the Roman-German (continental) or Anglo-American systems of law. This is why thorough study of the issue is performed by making focus on the comparative-legal analysis of the Georgian model and the German system of law. It is noteworthy that the Georgian legislation has been significantly amended with regards to the Penalty. Since 2017, the Civil Code of Georgia has provided a new definition of a statutory penalty (article 625) within the loan obligations, which was positioned on the 150%-scale that was inappropriate and unreasonable from the very beginning, and thus, it finally diverged from the overall practice adopted in the European countries. The article provides the review of a complex of issues like: the need for defining the form of a penalty, the prerequisites for charging and cancelling a penalty within the enforcement of decisions, court’s rulings on inappropriately high penalties, criticism of a statutory penalty determined under the new standard of article 625 of the Civil Code of Georgia and the discretionary authorities of the judge to rule an inappropriately high penalty. The article also presents the analysis of a generalized practice applied by judicial authorities, the analysis of high-profile court judgements, and along with outlining the flaws, the article has also drafted interim findings and recommendations, which are crucially important for harmonizing and improving the law.