The nature and scope of the penalty clause rule

Two recent cases have given consideration to the nature of the penalty clause jurisdiction. The first is the decision of Burton J in Cavendish Square Holdings BV v El Makdessi [2012] EWHC 3582 (Comm), [2013] 1 All ER (Comm) 787 and the second is the decision of Popplewell J in Imam-Sadeque v Bluebay Asset Management (Services) Ltd [2012] EWHC 3511 (QB), [2013] IRLR 344. Although the two cases deal with different aspects of the penalty clause rule, a number of propositions of law emerge from the cases which are applicable to the construction industry.