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This fatwa acknowledges a need to protect the value of foreign currency given the uncertainty of the exchange rate (Islamic hedging), and that, to date, shari'a-friendly provisions and instruments to deal with this trend are lacking.

The fatwa states that Islamic hedging is applicable to the following agreements:

1. 'Aqd al-Tahawwuth al-Basith (simple value-protecting transaction), whereby parties agree to a certain amount of foreign currency to be sold and purchased, at a certain exchange rate, at a certain time, either as a once-off or on multiple occasions;
2. 'Aqd al-Tahawwuth al-Murakkab (complex value-protecting transaction), whereby parties agree to a certain amount of foreign currency to be sold and purchased, at a certain exchange rate, at a certain time, as a once-off; and
3. 'Aqd al-Tahawwuth fi Suq al-Sil'ah (shari'a commodity exchange value-protecting transaction), whereby a shari'a commodity exchange facilitates an Islamic hedging trader to conduct a commodities transaction at the shari'a commodity exchange.

Islamic hedging may only be conducted if there exists an apparent need to minimise an unavoidable risk associated with the exchange rate. It may not be performed for speculative purposes. The fatwa also maintains that an exchange rate must be agreed upon by both parties at the time they reach an agreement.

This fatwa recognises the increase in shari'a-type business, as well as the demand for clarification on fiqh muamalah maliyah (commercial goods law), in order to increase its status and role. It also recognises that shari'a financial institutions have requested a fatwa for the development of syndicated shari'a financial products. The fatwa defines syndicated financing (al-tamwil al-mashrifi al-mujamma') as an agreement between several financial institutions (be they all shari'a financial institutions, or some shari'a financial institutions and some conventional financial institutions) to jointly-finance a specific project. Syndicated financing agreements can take the form of sale-purchase agreements, rental agreements, and joint-venture agreements. In the event all financial institutions are shari'a-based, all relevant information can be contained in one document. If some of the participating financial institutions are conventional, i.e. not shari'a-based, the conventional institutions must have their relevant information in a separate document from that of the shari'a-based financial institutions.

This fatwa acknowledges that shari'a financial institutions accumulate funds through savings, deposits, and account transfers, pursuant to shari'a-friendly contracts. Moreover, that in order to attract the public's interest in their products, shari'a financial institutions offer their customers rewards as promotions, as well as for customer loyalty. The fatwa concludes that promotional rewards may be an item or a service, but not a sum of a money. That item or service must be halal. The shari'a financial institution may set conditions vis-a-vis receipt of the reward, provided those conditions are not interest-bearing. Should the recipient breach these conditions, they are required to return the reward. Rewards are also not permitted if they are for the personal gain of an employee of the relevant financial institution, have the potential to be deemed a bribe, and/or are covertly interest-bearing.

This fatwa states that capital market, as well as all mechanisms and activities associated therein, accord with shari'a if they meet shari'a principles. Moreover, a security is deemed to meet shari'a principles if it obtains a Shari'a Compatibility Declaration. It specifies that transactions must not be speculative or manipulative, nor may they contain components that are excessively risky, interest-bearing, immoral or the like.

This qanun regulates the prohibition on the consumption of alcoholic beverages. It outlines that any beverages containing alcohol are haram (forbidden) and the consumption thereof is prohibited (arts 4 and 5). All persons and entities are prohibited from producing, preparing, selling, distributing, transporting, storing, stockpiling, trading in, gifting, and promoting, alcoholic beverages (art 6). The qanun also prohibits assisting with, or being complicit in, any of the above activities. The qanun's objective is to protect the Acehnese from being involved in any activity that can lead to the destruction of mind. The qanun also regulates the investigation and prosecution of those suspected of, or found to be guilty of, any of the above alcohol-related activities. It outlines that anyone, regardless of their nationality, will be made subject to this qanun if they are found selling or distributing alcoholic beverages. The qanun prescribes 40 strokes of the cane (art 26(1)), imprisonment or payment of a fine (art 26(2)), as an alternative to offenders.

This statute replaced Law No. 22 of 1999 on Regional Administration, arguably, as a way of regaining some of the power the central government had relinquished to regional governments, via Law No. 22 of 1999. The primary way it does this is by granting the provinces (propinsi) superiority over the regencies (kabupaten), municipalities (kota) and villages (desa), defining provincial governors as representatives of the central government (wakil Pemerintah).

The statute stipulates the process by which the different levels of regional government may legislate and execute laws peculiar to their own region, as well as the mechanism and process by which such laws can be invalidated by higher-level government in the event such laws contravene a hierarchically-superior law. The Law also allows higher-level government to devolve legislative power to lower-level governments if it deems necessary and appropriate.

While now replaced by Law No. 23 of 2014 on Regional Administration, the statute is of particular significance given the content of art 10(3), the efficacy of which is crucial to any analysis of the validity of Islamising regional regulations in Indonesia. Article 10(3) maintains the central government’s exclusive jurisdiction over foreign affairs, defence, security, judicial matters, national monetary and fiscal matters and religion (emphasis added).

One school of thought argues that art 10(3) renders any Islamising regulation drafted by a provincial or sub-provincial government ultra vires or invalid. Conversely, Islamising regional regulations may Islamise public life but can circumvent the purview of art 10(3) by being couched in terms specific to social order and morality.

On March 6, 2017, President Donald J. Trump issued a revised Executive Order which barred, with certain exceptions, entry to the United States of nationals from six predominantly Muslim countries, suspended the entry of refugees for 120 days, and reduced the number of refugees who can be admitted to the United States by more than half. The Plaintiffs (political activist Linda Sarsour, as well as 26 additional Muslim individuals) filed an emergency motion for a temporary restraining order and/or preliminary injunction. While other litigation opposing the revised Executive Order were filed to enjoin only Sections 2 and 6 of the revised Executive Order, in this case the Plaintiffs asked the Court to enjoin the enforcement of the revised Executive Order in its entirety. In order for the Plaintiffs to succeed, they had to prove that (1) they are likely to succeed on the merits of their case; (2) they are likely to suffer irreparable harm in the absence of injunctive relief; (3) the balance of the equities tips in their favor; and (4) an injunction would be in the public interest. Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 22, 129 S. Ct. 365, 172 L. Ed. 2d 249 (2008).

This fatwa acknowledges that certain conditions will dictate that customers will transfer or withdraw their funds from a shari'a financial institution as a result of a displaced commercial risk, necessitating shari'a banking policies that:

1. smooth over revenue without a profit equalisation reserve; and
2. smooth over revenue with a profit equalisation reserve.

Accordingly, shari'a financial institutions require a set of shari'a-based guidelines pursuant to which they can form a profit equalisation reserve, derived from their own profits, and which tells them when may draw upon it. The fatwa dictates that income smoothing may only be conducted on third party monies under a mudharabah agreement. It may not be conducted if its implementation will merely result in accruing interest for the bank.

In the case of income smoothing without accessing a profit equalisation reserve, where profits from an enterprise are lower than projected, a shari'a financial institution may relinquish its right to equalise financial incentives for customers in order to remain competitive.

This fatwa acknowledges that within society and shari'a financial institutions there has emerged a need to trade in commodities in a shari'a-friendly manner.

The fatwa dictates that commodities must be halal, legitimate, physically transferrable, be in the possession of the trader or their agent, and that all dealings must be executed pursuant to the agreement between the trader and purchaser. The fatwa also requires the Jakarta Futures Exchange to create shari'a-friendly commodities trading mechanisms, as well as facility for physical trades to be made.

This presidential decree regulates the operations of the National Zakat Administering Body (Badan Amil Zakat Nasional), a body formed pursuant to Law No. 38 of 1999 on Zakat Management.

This fatwa acknowledges that society requires a more detailed explanation on the shari'a multi-level direct sale of Umrah services. It addresses this by providing a raft of regulating guidelines regarding the provision and retention of services provided for those undertaking the Umrah.

The appellants sought to challenge the decision of the Medan Religious Court (lower court), which had declared the first appellant's auctioning of the respondents' property invalid, on the grounds that the lower court did not have the jurisdiction to make such judgment.

The court placed great emphasis on the actual transaction (akad) agreed to by the parties, stating that for a dispute between a creditor and debtor to be completely resolved, adherence to the relevant terms of the agreement was of paramount importance. Article 17(3) of the parties' Murabahah agreement provided that, in the event of a dispute, and if deliberative measures had failed, the parties would seek to resolve the dispute before the National Shari'a Arbitration Board (Basyarnas). Article 17(4) then compelled the parties to treat any decision from Basyarnas as first and final.

The court, pursuant to art 1338 of the Indonesian Civil Code (Kitab Undang Undang Hukum Perdata), found art 17 to be legally binding on the parties. Moreover, it cited a fatwa of the National Shari'a Council (Dewan Syari'ah Nasional), which cited verse 1 of Surat Al-Maidah from the Qur'an, which asks believers to abide by, and implement, the agreements they make. Accordingly, the court found that the lower court was precluded from serving as a forum to resolve the parties' dispute. Indeed, the court noted that it was common knowledge in the judiciary, especially in the religious judiciary, that when investigating shari'a economy-related disputes, deference to contractual terms relating to dispute resolution was unequivocal.

This government regulation aids in the implementation of Law No. 23 of 2011 on Zakat Management. It makes provision for the collection of zakat (alms) and regulates the national zakat collecting body, Badan Amil Zakat Nasional.

The appellant sought to challenge the decision of the Surabaya Religious Court (5718/Pdt.G/2014/PA.Sby), which had found that it did not have the jurisdiction to adjudicate his claim.

The court grappled with the ambiguity as to an appropriate dispute resolution forum for shari'a banking disputes. It noted that between Constitutional Court Decision No. 93 of 2012, art 55 of Law No. 21 of 2008 on Shari'a Banking, and art 49(i) of Law No. 3 of 2006 on Religious Judiciary, the religious courts were not only authorised to resolve shari'a banking disputes, but all facets of shari'a economy. It also noted, however, that dispute resolution, purusant to art 49(i) of Law No. 3 of 2006, provides that parties may decide not to resolve their disputes before a religious court. In this instance, as the parties had specifically designated the National Shari'a Arbitration Body (Badan Arbitrase Syari'ah Nasional) as their preferred dispute resolution forum, art 1338 of the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata) mandated that the parties had to abide by the terms of their agreement. Therefore, the court dismissed the appeal.

The estate and family members of an American serviceman killed during the 1983 bombing in Beirut, allegedly by Hezbollah, brought suit against Iran and its Ministry of Intelligence and Security for his wrongful death. Invoking the state-sponsored terrorism exception to the Foreign Sovereign Immunities Act (a law that allows foreign nations to be immune from lawsuits from American citizens in most cases), they alleged that Iran should be held liable for providing financial support to Hezbollah. Iran did not file an answer to the charge. The Court entered judgment in favor of the family, granting compensatory damages in the amount of $13,241,486 to the serviceman’s widow, parents, and children.

Petitioner Fedwa Khalik, an Arab-American who was born in Kuwait and practiced Islam, sued her former employee, alleging discrimination because of race, religion, national origin, and ethnic heritage under Title VII of the Civil Rights Act of 1964. The Petitioner alleged she was grabbed in the office and subjected to false investigation and discrimination. The Appellate Court held for the Respondent after determining that the Petitioner’s allegations were not plausible under the Twombly/Iqbal standard [two cases which announced a new federal pleading standard, allowing district court judges to dismiss a complaint if it does not set out a “plausible” claim: Bell Alt. Corp. v. Twombly, 550 U.S. 544 (2007); Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009)] because (1) several of her allegations were not entitled to the assumption of truth because they were entirely conclusory, and (2) the remaining facts did not sufficiently allege discrimination or retaliation since her claims were based solely on the fact that she was Muslim and Arab-American.

The plaintiffs submitted that they had entered into a murabahah financing agreement with the first defendant on 19 September 2011 for IDR 175 million. The money was to be used to finance a shop, and the plaintiffs agreed to repay the money to the first defendant within 60 months, leveraging their 224m² family property in Jabon village, Mojokerto. The plaintiffs submitted that they had chosen to borrow from a shari'a bank because they were both Muslims and wished to conduct business in accordance with the Qur'an and Sunnah.

Between October 2011-August 2012, the plaintiffs adhered to the repayment structure, and made 11 repayments (IDR 47,500,000). By September 2012, however, the plaintiffs' business had become less profitable as the number of market competitors increased. The plaintiffs still made their monthly repayment on 29 September 2012, but submitted that they had requested a restructuring of the agreement to accommodate their recent financial hardship. Moreover, they also submitted that the first defendant should have provided the plaintiffs with an opportunity to sell the property on their own to enable them to make future repayments. Instead, on 24 April 2013, the first defendant sent to the plaintiffs a letter stating its intentions to auction the leveraged property the following morning (25 April 2013).

The plaintiffs learned that the third defendant, who had successfully bid at auction for the property, had already visited the property before auction with an employee of the first defendant, expressing an interest to purchase it for IDR 225 million. The plaintiffs had rejected the offer, wishing instead to resolve the dispute through legal channels. The plaintiffs submitted that the first and third defendants had clearly colluded to acquire the plaintiffs' family property. Moreover, that the property should have been able to attract IDR 400 million at auction.

The plaintiffs requested that the court:

1. invalidate the auctioning of their property;
2. afford them the opportunity to sell their property on their own; and
3. prohibit the second defendant from dealing with the property.

The court found, however, that it was precluded from adjudicating the case as the parties had agreed to resolve any disputes before the National Shari'a Arbitration Body (Badan Arbitrase Syari'ah Nasional).

On March 6, 2017, President Donald J. Trump, issued a revised Executive Order which barred, with certain exceptions, entry to the United States of nationals from six predominantly Muslim countries, suspended the entry of refugees for 120 days, and reduced the number of refugees who can be admitted to the United States by more than half. The Plaintiffs (the State of Hawai’i and Dr. Ismail Elshikh, an American citizen of Egyptian descent who serves as the Imam of the Muslim Association of Hawai’i) filed a motion for a nationwide temporary restraining order.

The Plaintiffs argued that the revised Executive Order subjected them to discrimination in violation of the Constitution and the Immigration and Nationality Act 8 U.S.C. § 1101 et seq. (INA), because the Executive Order results in “their having to live in a country and in a State where there is the perception that the Government has established a disfavored religion.” The Plaintiffs pointed to public statements by the President and his advisors regarding the implementation of a “Muslim Ban,” which the Plaintiffs contended was the tacit and illegitimate motivation underlying the revised Executive Order. For example, the Plaintiffs pointed to a statement by President Trump that he was “establishing a new vetting measure to keep radical Islamic terrorists out of the United States of America,” and that “We don’t want them here,” and to an interview with President Trump in which he claimed: “Do you know if you were a Christian in Syria it was impossible, at least very tough to get into the United States? If you were a Muslim you could come in, but if you were a Christian, it was almost impossible and the reason that was so unfair, everybody was persecuted in all fairness, but they were chopping off the heads of everybody but more so the Christians. And I thought it was very, very unfair. So we are going to help them.”

The Court found that the State of Hawai’i and Dr. Elshikh both had standing to assert their claims. The Court found that Hawai’i had standing due to the harms to the state’s proprietary interests as operator of public universities and due to preliminary data that indicated the revised Executive Order had suppressed international travel and injured tourism as Hawai’i’s main economic driver. As for Dr. Elshikh’s standing, the Court observed that the injury-in-fact prerequisite can be “particularly elusive” in Establishment Clause cases because plaintiffs do not typically allege an invasion of a physical or economic interest. “Despite that, a plaintiff may nonetheless show an injury that is sufficiently concrete, particularized, and actual to confer standing.” See Catholic League, 624 F.3d at 1048-49; Vasquez v. L.A. County, 487 F.3d 1246, 1250 (9th Cir. 2007). Dr. Elshikh had standing because the revised Executive Order left him and his family, including a wife of Syrian descent and young children who are American citizens, with the knowledge that the United States—their own country—would discriminate against individuals who are the same ethnicity as them, and who hold the same religious beliefs. The Court found that, because the revised Executive Order targeted Muslim citizens due to their religious views and national origin, which may result in these citizens being unable to associate freely with those of other faiths, the injuries are sufficiently personal, concrete, particularized and actual to confer standing in the Establishment Clause context.

As for the Establishment Clause claim, the Court declined the Defendants’ urging to rely on the Executive Order’s religiously neutral text, and instead evaluated the text in conjunction with the historical background of the revised Executive Order. The Court found this historical record “includes significant and unrebutted evidence of religious animus driving the promulgation of the Executive Order and its related predecessor.” The Court included statements made by President Trump including: “I think Islam hates us” and “People were so upset when I used the word Muslim. Oh, you can’t use the word Muslim. Remember this. And I’m okay with that, because I’m talking territory instead of Muslim.”

Because the Court found that the Plaintiffs have shown a “strong likelihood” of succeeding on their claim that the Executive Order violates First Amendment rights under the Constitution, and “it is always in the public interest to prevent the violation of a party’s constitutional rights,” Melendres v. Arpaio, 695 F.3d 990, 1002 (9th Cir. 2012), the Court granted the Plaintiffs’ motion for a temporary restraining order (TRO). In effect, the TRO now blocks the second version of the ban.

Editors’ Note: Many of the statements about Islam, including references to Islam generally and to jihād, tend to refer to false conceptions of Islamic law or sharīʿa as inherently violent.

The 12 plaintiffs claimed that they were prospective cooperative members that had deposited money into a futures fund with Koperasi Serba Usaha Syari'ah Baitul Maal Wat Tamwil Islam Sejahtera (BMT ISRA) for family reasons that may emerge in the future. The plaintiffs alleged that the first and second defendants, the Director and Chairperson of BMT ISRA respectively, did not implement a cooperative system, viz. cooperative funds or capital sourced from a principal pool of funds and obligatory funds from cooperative members. Rather, the plaintiffs alleged that the defendants had sourced funds from customers who were members of the cooperative, prospective members of the cooperative, as well as those who were neither. The defendants did, though, obtain a share of profits (nisbah), and in their management of the funds, used a shari'a-style system that did not involve interest (riba).

Initially, the plaintiffs received their share of the profits promptly, but when their profit share for November 2010 did not materialise, the plaintiffs sought to bill the defendants for it, and to retrieve their futures investment. BMT ISRA, however, had closed. The plaintiffs had learned from news circulations that it was not only the Brebes branch that had closed, but almost all BMT ISRA branches. They had also learned that the first and second defendants, as director and chairperson, were legally implicated. The plaintiffs alleged that the defendants had shown a lack of good faith with respect to them, and collectively sought from the defendants IDR 282 million in initial funds not yet returned, as well as IDR 62,286,3000 in unpaid profit share (total: IDR 344,286,300).

In addition to dismissing the plaintiffs' claim in its entirety, the second defendant argued that the court was precluded from adjudicating the matter as the plaintiffs had deposited monies in Brebes, not Bantul. Moreover, both the first and second defendants objected on the grounds that they were not director and chairperson respectively, according to the deed of establishment of BMT ISRA, and that Koperasi Serba Usaha Syariah Baitul Maal Wat Tamwil Islam Sejahtera was not included in the deed. The defendants also maintained that they themselves had not entered into an agreement with the plaintiffs.

The court dismissed the second defendant's objection, finding it was authorised to adjudicate the case. It also found that the parties had indeed entered into an agreement together, pursuant to which the plaintiffs were entitled to the return of investment funds already paid (IDR 193 million), but not the resulting profit share (IDR 38,693,700). Neither were they entitled to the IDR 79 million not yet paid and resulting IDR 23,592,600 in profit share.

The court cited Fatwa No. 7 of the National Shari'a Board - Indonesian Council of Ulama, noting that a Mudhorobah financing agreement entails the shari'a financial institution financing 100 per cent of the project, while the customer(s) acts as the enterprise manager. Moreover, that the parties to the agreement are to agree on when funds are to be returned, and when profit shares are to be distributed, and that the shari'a financial institution is to bear all financial losses resulting from the agreement, except for that resulting from the customer's fault (intentionally or negligently) or contravention of the agreement. With regards to profit sharing, the Fatwa dictates that it must be divided between the two parties, and the percentages of the proportions to be divided must be included in the agreement. Unfortunately for the plaintiffs, as their agreement did not adhere to the latter point, the court could not order the defendants to pay to them the IDR 38,693,700 in resulting profit share.

The cassation respondent had an iron sand transportation business and, in order to improve efficiency, had successfully applied for a credit facility (murabahah) from the cassation applicant to purchase a container truck. The agreement stated that, in the event of any dispute, the first course of action would be to resolve that dispute in a deliberative manner between the two parties, but if deliberations were to fail, both parties agree to resolve the dispute before the National Shari'a Arbitration Body (Badan Arbitrase Syariah Nasional).

The cassation respondent had acquired a credit facility from the cassation applicant for IDR 1.476 billion, with a down payment of IDR 265,100,000. The cassation respondent subsequently experienced many financial ups and downs, impeding his ability to make repayments to the cassation applicant. The cassation respondent, however, if late to make his repayment, would also pay the late fee associated therein.

On 3 August 2013 at 8:30pm, the cassation respondent repossessed the container truck, subject of the agreement. It did so after the cassation respondent was 17 days late to make a repayment. The parties had agreed that the cassation respondent would pay a late fee of 0.002 per cent of the nominal repayment per day, and after 30 days in default, the cassation applicant would be entitled to repossess the vehicle. Pursuant to art 1365 of the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata), the cassation respondent had sought damages.

The South Jakarta Religious Court (lower court) had ordered the cassation applicant to return to the cassation respondent the vehicle subject of the credit facility agreement, as well as to pay to the cassation respondent damages of IDR 167,355,000. At the same time, the lower court ordered the cassation respondent to pay to the cassation applicant arrears of IDR 167,355,000, and a fine of IDR 209,193,750. The Jakarta High Religious Court then upheld this decision on appeal.

The cassation applicant sought to challenge the decision on the grounds that the lower courts both erred in their application of the law. Specifically, that the Jakarta High Religious Court had failed to provide reasons or clarity for its decision to uphold the decision of the South Jakarta Religious Court.

The Supreme Court upheld the appeal, concurring with the cassation applicant that the lower courts had failed to apply the law correctly. The court found that the parties had entered into a murabahah agreement on 17 December 2010, the subject of which (the vehicle) had been repossessed by the cassation applicant. The court believed that such conduct was a breach of the agreement rather than illegal conduct. Moreover, the right to take legal action must be based on one party's failure to fulfil an contractual obligation, meaning that the cassation respondent needed to explain which section of the agreement it believed the cassation applicant had contravened. Finally, the court reasoned, the vehicle was not seized by the cassation applicant. For those reasons, the court found in favour of the cassation applicant.