SHARIAsource

These materials document, state by state, what each of the sharīʿa states is doing in respect of the collection and distribution of zakāt and the management of pious endowments (waqf, pl. awqāf). The materials include early proposals by Sharia Implementation Committees or Councils of Ulama for official zakāt organizations, including the doctrinal background; all statutory materials related to Zakat and Endowment Boards, Commissions, Committees, and Funds; organizational and regulatory materials issued by such bodies; a number of official reports on their activities, including types and amounts of zakāt collected and distributed and endowments established; and other information collected in the course of fieldwork.

These materials are a part of The Nigeria Papers – a SHARIAsource Special Collection, compiled and edited by Independent Scholar Philip Ostien and others. 

The U.S. accused a group of defendants of financial dealings with terrorists, on the basis that they had entered into Islamic financial agreements—specifically a profit-sharing arrangement known as a mudaraba contract—with a known leader of Hamas, a relative of one of the members of the defendant group. The U.S. District Court for the Northern District of Texas found them guilty. On appeal, this Court held that there was enough evidence to suggest that the defendants knew that their relative was a designated terrorist but continued to do business with him. The Court thus upheld the District Court’s guilty verdict.

The Court considered questions of venue for a case related to Islamic financial instruments. The defendant, Dar al-Maal al-Islami Trust, petitioned the Court to compel the plaintiff, Vinewood Capital, to follow the arbitration clause of a profit-sharing (mudaraba) agreement. The Court determined that there was no single agreement listing both parties as signatories, and it thus refused to uphold the arbitration clause.

The defendant, Dar al-Maal al-Islami Trust, sought to enforce the terms of an arbitration clause, which required arbitration in the Bahamas upon disputes surrounding an Islamic financial profit-sharing arrangement known as a mudaraba agreement. The Court found that the clause was not enforceable, as Vinewood Capital was not a signatory party to the agreement. This decision was affirmed in 2008 by the U.S. Court of Appeals for the Fifth Circuit.

This fatwa defines the shari'a-friendly inter-bank financial market (Pasar Uang Antarbank berdasarkan prinsip Syariah - PUAS) as involving short-term financial transactions based on shari'a principles. PUAS participants in the primary market are defined as shari'a banks in their capacity as issuers of PUAS instruments, or funds-owners, and conventional banks as funds-owners. PUAS participants in the secondary market are defined as shari'a banks as sellers or purchasers of PUAS instruments, and conventional banks as sellers and purchasers of PUAS instruments. The fatwa also states that a PUAS certificate can be issued via mudharabah or musyarakah agreement.

Plaintiff Kevin Murray, an American taxpayer, sued Treasury Secretary Timothy Geithner and the Board of Directors of the Federal Reserve, arguing that the Emergency Economic Stabilization Act (EESA), which established the Troubled Asset Relief Program (TARP), violated the Establishment Clause of the First Amendment by allowing funds to be used to support companies that invest in sharīʿa-compliant financial instruments. Applying the Lemon Test to assess whether there was excessive entanglement between religion and state related to Islamic financial instruments, the Court concluded that there was not; specifically, it determined that the Islamic financial instruments comprised only a small percentage of the complete business portfolio, that the purpose of the EESA was not religious, and that the primary effect of utilizing the Islamic financial instruments did not support or hinder any religion. Accordingly, the Court granted summary judgment in favor of the defendants.

Plaintiff Kevin Murray, an American taxpayer, sued Treasury Secretary Geithner and the Board of Governors of the Federal Reserve, challenging use of the Troubled Asset Relief Program (TARP) funds created by the Emergency Economic Stabilization Act (EESA) to bailout AIG, a “market leader in Sharia-compliant financing.” The Court denied summary judgment in favor of the defendant, finding that the bailout of AIG by the government may raise First Amendment Establishment Clause issues. This decision was overturned in a 2011 appeal, in which this same Court granted summary judgment in favor of the defendant, holding that the plaintiff had not made out a sufficient case that would allow a jury to conclude, under the Lemon Test (which assesses whether there is excessive entanglement of the Government with religion) that the Treasury Secretary violated the Establishment Clause by allowing AIG investment in sharīʿa-compliant financial instruments.

This is a memorandum (circulaire) issued by the shari'a board of the Central Bank of Morocco (Bank al-Maghrib) in January 2017. The document contains fatwas pertaining to Islamic financial instruments such as murābaḥa and regulations concerning its practice and penalties. 

This fatwa defines a 'line facility' as a rolling financial ceiling for a fixed term executed in accordance with shari'a principles. It permits a line facility to be executed based on an agreement between a shari'a financial institute and a customer (wa'd) for certain financial instruments (murabahah, istishna', mudharabah, musyarakah and ijarah) in accordance with shari'a principles. The shari'a financial institute's fee or profit may only stem from the yield of the line facility itself.

At issue is this case is an Islamic financial instrument called a mudaraba agreement, by which a bank enters into a profit-sharing arrangement with a borrower. The Agreement at issue includes a clause stating that any disagreements are to be settled through arbitration in the Bahamas. The Court refused to uphold the Agreement because Vinewood Capital was not a signatory to the agreement, and thus denied the motion to compel arbitration of Vinewood’s claims. In May of 2011, the Court dismissed the appeal and closed the case.

Islamic finance creates financial products specifically aimed at Muslims that are sharīʿa compliant. Many scholars have condemned Islamic finance for condemning ribā (interest) on the one hand, particularly where usurious, but then many others have created workarounds that allow modern big-finance firms to avoid it in name only on the other hand. Those who argue against the workaround argue that nominal interest-avoidance goes against the spirit of the guidelines set forth in Islamic law (sharīʿa). Weighing in on the controversy, University of Toronto Law Professor Mohammad Fadel considers whether ribā might serve a function that goes beyond simple definitions of it as either interest or usury. Historically, the prohibition on interest was a means of regulating medieval financial industries, in ways that have little application to the modern financial instruments. The medieval prohibitions and the modern controversies about Islamic finance then, he argues, are misaligned and need rethinking. This post provides a "plain English" review of the article: Mohammad H. Fadel, Ribâ, Efficiency and Prudential Regulation: Preliminary Thoughts, 25 Wisconsin Journal of International Law 655 (2008).

The Administration of the Religion of Islam (State of Selangor) Enactment 2003 establishes the fatwā legalization process in the state of Selangor, Malaysia. It also establishes and outlines the role of the mufti as the chairman of Selangor’s state fatwā committee. It is the main piece of legislation governing Selangor's syariah courts, Islamic finance guidelines, individual conversion to Islam, as well as other Islamic regulations the state has determined to regulate. 

The parties were married on 12 January 2001 and had one child. The applicant submitted that, by the beginning of 2014, the parties' marriage had become quarrelsome because the respondent had:

1. undervalued the applicant as her husband by, for example, not being at home when the applicant would return home for lunch, without first requesting the applicant's permission, and becoming angry when the applicant would confront the respondent about this; and
2. undervalued the applicant's family, frequently refusing to meet members of the applicant's family when they would visit.

Problems escalated at the end of 2014 when the respondent, for no apparent reason, refused to lend the applicant money to assist with his sale of daily items, despite the fact that the applicant had helped the respondent purchase bananas to be taken to market for sale. After the ensuing argument, the applicant left the respondent for his parents' home, where he had remained for the eight months leading up to the proceeding. The applicant had, however, continued to provide financial support for the parties' child. The applicant, accordingly, sought the court's permission to divorce (talak satu raj'i) the respondent.

Other than refuting many of the applicant's submissions, the respondent also counterclaimed for the following:

1. IDR 4.5 million for iddah (three-month period after divorce has been granted);
2. a prayer (shalat) instrument as mut'ah (divorce compensation); and
3. IDR 1.5 million per month in child maintenance.

The applicant, in response, claimed he could only afford the following:

1. IDR 500,000 for iddah;
2. a prayer instrument as mut'ah; and
3. IDR 1.5 million in child maintenance.

The court acceded to the applicant's request, pursuant to art 19(f) of Government Regulation No. 9 of 1975, and art 116(f) of the Compilation of Islamic Laws, on the grounds of ongoing conflict. With regards to the respondent's counterclaim, the court ordered the applicant to pay to the respondent the following:

1. IDR 2 million for iddah;
2. a prayer instrument as mut'ah; and
3. IDR 1.5 million per month in child maintenance.

The parties were married on 25 April 1997 and had four children (aged 16, 12, 7 and 4). The parties' marriage had been harmonious for approximately three years before becoming quarrelsome by the beginning of 2002. The applicant submitted that the respondent:

1. was not transparent with her finances;
2. would ignore the applicant’s advice and did not care about the troublesome situation at home; and
3. provided her own family with financial assistance (by selling the gold jewellery the applicant had purchased for her, unbeknownst to the applicant), but did not contribute to her own immediate family.

In 2014, these problems escalated and the parties separated (although the court stated that the parties separated on 8 November 2012).

On 13 November 2014, the applicant filed for a revocable divorce (talak satu raj'i) in the Kuala Simpang Shari'a Court. In response to the applicant’s submissions, the respondent submitted that the applicant had already married another woman without the respondent’s permission, which the applicant conceded. The applicant also agreed to pay to the respondent IDR 1 million for iddah (100-day period after divorce has been granted) and mut’ah (divorce compensation), in the form of a prayer instrument.

The court acceded to the applicant's request, finding that the parties could no longer fulfil the purpose of marriage as envisaged by art 1 of Law No. 1 of 1974 on Marriage, and art 3 of the Compilation of Islamic Laws. The court, pursuant to art 39(2) of Law No. 1 of 1974, art 19(f) of Government Regulation No. 9 of 1975, and art 116(f) of the Compilation of Islamic Laws, granted the applicant a revocable divorce (talak satu raj'i) on the grounds of ongoing conflict, while also ordering the applicant pay to the respondent IDR 1 million for iddah, the aforementioned prayer instrument for mut'ah, as well as court costs (IDR 191,000).

The parties were married on 27 December 2006 and had one child. The plaintiff's father had acted as the marriage guardian (wali nikah), and the dowry (mahar) had been IDR 200,000 and a prayer instrument. Since the beginning of 2015, however, the marriage had been disharmonious. The plaintiff submitted that this was because the defendant:

1. would regularly become angry with the plaintiff for no apparent reason;
2. would regularly leave the parties' home, unbeknownst to the plaintiff; and
3. rarely provided the plaintiff with financial and emotional support.

On 25 June 2016, problems escalated when the defendant confessed to having had an extra-marital affair. The defendant then left the plaintiff without first informing her, never to return. Realising that the purpose of marriage, as prescribed in Law No. 1 of 1974 on Marriage, had been frustrated, the plaintiff filed an application for a judicial divorce (talak satu ba'in shughra).

The court acknowledged that the information provided by the plaintiff's two witnesses corroborated with the plaintiff's submissions, and that the defendant had not returned home, nor had he provided a forwarding address. The purpose of marriage, as prescribed in art 1 of Law No. 1 of 1974 on Marriage, and art 3 of the Compilation of Islamic Laws, that being to create an everlasting and joyful family, was no longer feasible. Pursuant to art 19(f) of Government Regulation No. 9 of 1975, and art 116(f) of the Compilation of Islamic Laws, the court therefore acceded to the plaintiff's application on the grounds of ongoing conflict.

Chapters on nominate contracts (endowment, sales, options, barter/ mu‘āwaḍa, hire and lease, partnerships -shirka, muzāra‘a, musāqāt, muḍāraba-, reward/ju‘āla, deposit, fungible and non-fungible loan, agency, financial and personal guaranty, assignment, settlement, pledge, gift), shuf‘a, wills, inheritance, marriage and divorce, mahr, and alimony took almost all of its substance from prominent Shi’i fiqh treatises. Other chapters (classification of properties, easement, usufruct, general rules of obligations and contracts, nationality, registration of civil status, domicile, engagement, guardianship, and evidence) are mainly influenced by Swiss and French Civil Codes and Swiss Code of Obligations.