Contemporary Primary Sources :: Fatwās - Contemporary :: 16 Muḥarram 1423 / 28 March 2002
National Shari'a Board - Indonesian Council of Ulama Fatwa No. 22 of 2002 on Parallel Sale-Purchase Istishna'
Dewan Syari'ah Nasional MUI, Posted by Daniel Peterson, 09 February 2016
This fatwa defines a parallel istishna' sale-purchase agreement as an istishna' agreement between a customer and a shari'a financial institute where, in order to meet its obligations to the customer, the shari'a financial institute sub-contracts those obligations out to another party. Despite the sub-contracting arrangement, the shari'a financial institute remains liable to the customer for the fulfilment of the terms of the agreement.
The fatwa permits the execution of such agreements provided the following conditions are met:
- the conditions of the first istishna' agreement are in no way contingent on those of the second agreement;
- the shari'a financial institute is not permitted to glean the margin during construction from the customer because such a practice is contrary to shari'a principles; and
- all conditions that apply to istishna' agreements apply to parallel istishna' agreements.