Is it permissible to stipulate a discount of 12% from the total price of the unit as agreed-upon compensation, not subject to judicial review, in the event of the فسخ (annulment/rescission) of a contract for the purchase of an apartment by installments?

There is no objection to agreeing that the party rescinding the sale should pay a sum of money or have it deducted from the amount paid, provided that the rescission is not due to a legitimate Sharia-compliant reason, such as the option of defect. This is for two reasons: Firstly, the original principle in a sale is its binding nature, and it is not to be rescinded except with the consent of both parties. Therefore, the penalty clause is permissible in matters other than debts, based on the Prophet's (peace be upon him) saying: "Muslims are bound by their conditions." Secondly, if one of the parties wishes to rescind without a valid reason, the other party may request a sum of money. This falls under the category of annulment (iqālah) for more or less than the original price, which is permissible according to the preponderant opinion, as ruled by Sheikh Ibn ‘Uthaymeen, may Allah have mercy on him.