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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.

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 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.

This fatwa acknowledges that the distribution of profits from an undertaking between parties in a joint-venture may be based on the principle of profit sharing, as well as the principle of net revenue sharing. The fatwa permits both approaches, but favours net revenue sharing for profit distribution.

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.

This decree defines Musyarakah Mutanaqishah financing as a financing facility based on the principles of musyarakah, that is, a joint venture where the shari'a financial institution's capital is reduced as a result of making incremental commercial transfers to the customer. It notes that the special characteristics of Musyarakah Mutanaqishah are that:

1. enterprise capital of both parties (shari'a financial institution and customer) is stipulated in portions;
2. enterprise capital already stipulated may not be reduced for the term of the agreement;
3. the shari'a financial institution agrees to transfer all portions in a commercial and incremental fashion to the customer;
4. deposits made by the customer to the shari'a financial institution that are of the same value as portion units are to be treated as commercial portion unit transfers, while deposits that exceed that value are profits that become the property of the shari'a financial institution.

The decree also acknowledges that the purpose of Musyarakah Mutanaqishah financing is to provide a financing facility to individual and corporate clients to increase their capital and/or assets based on a profit-sharing model.

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.