Section 383 — Judicial reduction of disproportionate penalty
Statutory text (Thai original)
ถ้าเบี้ยปรับที่ริบนั้นสูงเกินส่วน ศาลจะลดลงเป็นจำนวนพอสมควรก็ได้ ในการที่จะวินิจฉัยว่าสมควรเพียงใดนั้น ท่านให้พิเคราะห์ถึงทางได้เสียของเจ้าหนี้ทุกอย่างอันชอบด้วยกฎหมาย ไม่ใช่แต่เพียงทางได้เสียในเชิงทรัพย์สิน เมื่อได้ใช้เงินตามเบี้ยปรับแล้ว สิทธิเรียกร้องขอลดก็เป็นอันขาดไปนอกจากกรณีที่กล่าวไว้ใน
Verbatim from the Royal Gazette / Office of the Council of State
English translation
If a forfeited penalty is disproportionately high, it may be reduced to a reasonable amount by the Court. In determination of reasonableness every legitimate interest of the creditor, not merely his property interest, shall be taken into consideration. After payment of the penalty the claim for reduction is barred. The same rule applies also, apart from the cases provided for by Sections 379 and 382, if a person promises a penalty for the case of his doing or forbearing to do some act.
This English translation is provided for reference only and has not yet been firm-verified — always rely on the Thai original.
Firm annotation
Section 383 is part of Book 2 (Obligations) of the Thai Civil and Commercial Code. This entry is awaiting firm-authored commentary; the statutory text above is verbatim from the Office of the Council of State (OCS Krisdika) Thai source, with the English translation from the FAO/UN FAOLEX repository. Always rely on the Thai original for legal proceedings.
Why this matters in practice
For lawyers: bring Section 383 as a counterclaim or plea in any case involving an outsized contractual penalty; the court must take all the creditor's legitimate interests into account, not merely financial loss. For laypersons: if a contract requires you to pay a very large penalty, you may ask the court to reduce it even if you are in breach.
Legislative history
Part of the original Civil and Commercial Code codification; no major subsequent amendment.
Supreme Court decisions interpreting this section
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Supreme Court Judgment No. 3811/2562 (2019)
A contractual front-end fee that functions as pre-estimated damages for non-performance is a penalty subject to reduction under Section 383.
A bank's front-end fee of 13,120,000 baht imposed as a condition of a 656 million baht credit facility, payable on the day the facility was signed and drawn, was found to be a penalty (เบี้ยปรับ) and was subject to judicial reduction under Section 383.
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Supreme Court Judgment No. 11379/2556 (2013)
A freely negotiated penalty clause is not automatically an unfair contract term but remains reviewable under Section 383 if disproportionate.
A contractual penalty of 2% per month for breach was freely agreed and constituted a penalty clause; the court held it was not an unfair contract term under the Unfair Contract Terms Act but remained subject to reduction if disproportionate under Section 383.
Curated decisions with case numbers verified against the Supreme Court database. English renderings are the firm's editorial translation for study.
Frequently asked questions
Can a court reduce a penalty that has already been paid?
No. Section 383 expressly bars any claim for reduction once the penalty has been paid. A party who pays a penalty voluntarily cannot later seek a refund on the ground that it was excessive.