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Oxford Law Citator
Contents
Expand All
Collapse All
Preliminary Material
In Memoriam
Preface
Contents
Table of Cases
Canada
Hong Kong
Malaysia
Pakistan
Singapore
United Kingdom
United States
Table of Legislation and Other Instruments
Domestic Legislation
Bahrain
Dubai
Egypt
Indonesia
Iran
Malaysia
Ottoman Empire
Pakistan
Saudi Arabia
Singapore
United Arab Emirates
United Kingdom
Statutes
Statutory Instruments
United States
European Union
International
Regulatory Bodies
Accounting and Auditing Organisation of Islamic Financial Institutions (AAOIFI)
Financial Services Authority (FSA)
Insurance Authority of the United Arab Emirates Board
International Islamic FIQH Academy
Islamic Financial Services Board (IFSB)
Shari’ah Supervisory Board
List of Contributors
Main Text
Part I Introduction
1 Status of the Global Islamic Finance Industry
Preliminary Material
1.01
1.02
1.03
1.04
I The Evolution of Islamic Finance
1.05
1.06
1.07
1.08
1.09
1.10
1.11
1.12
1.13
1.14
1.15
1.16
1.17
1.18
1.19
1.20
1.21
1.22
1.23
1.24
1.25
1.26
II Pluralism and Diversity
1.27
1.28
1.29
1.30
1.31
1.32
1.33
1.34
1.35
1.36
1.37
1.38
1.39
1.40
1.41
1.42
1.43
1.44
1.45
1.46
III Islamic Finance and the Global Financial Meltdown
1.47
1.48
1.49
1.50
1.51
1.52
1.53
2 Sources and Principles of Islamic Law
Preliminary Material
I Introduction
2.01
2.02
2.03
II Terminology
A Shari’a
2.04
B Fiqh
2.05
C Usul al-fiqh
2.06
2.07
2.08
D Qur’an
2.09
2.10
2.11
2.12
2.13
2.14
E Sunna
2.15
2.16
2.17
2.18
2.19
2.20
2.21
F Ijma’
2.22
2.23
G Qiyas
2.24
2.25
H Furu’
2.26
I Mabsut
2.27
2.28
J Mukhtasar
2.29
K Fatwas
2.30
2.31
2.32
III Formation of the Classical System and its Modern Transformation
2.33
A Caliphs and Qadis
2.34
2.35
2.36
B Hadith and Traditionists
2.37
C Schools of Law
2.38
2.39
2.40
2.41
2.42
D Siyasa
2.43
2.44
2.45
2.46
2.47
2.48
E The Modernist Turn and the Salafiyya Movement
2.49
2.50
2.51
2.52
IV Islamic Law and the Moral Economy
2.53
2.54
2.55
V From Haram to Wajib: The Spectrum of Ethical Choice
2.56
2.57
VI Riba
2.58
2.59
2.60
A Qur’an
2.61
2.62
B Sunna
2.63
C Fiqh
2.64
D Modernists
2.65
VII Gharar, Jahl, Maysir
2.66
2.67
2.68
2.69
2.70
2.71
2.72
2.73
2.74
2.75
VIII Hiyal
2.76
2.77
2.78
IX Islamic Law of Contract
2.79
A Freedom of Contract?
2.80
B Lazim and Ja’iz Contracts
2.81
C Combination of Contracts
2.82
D Subject Matter
2.83
2.84
E Parties
2.85
2.86
F Formation
2.87
2.88
2.89
G Voidable and Void Contracts
2.90
2.91
H Termination
2.92
2.93
2.94
3 Islamic Financial Institutions
Preliminary Material
I Introduction
3.01
II Examples of the Regulation of IFIs
3.02
A Countries with Special IFI Regulation Regimes
3.03
B The United Kingdom as an Example of IFI Regulation Under a General Regime of Financial Regulation
3.04
C The Formal Model Versus the Substantive Model of Regulation
3.05
3.06
D Non-Discrimination in Practice: Central Bank Facilities to Help IFIs Manage Liquidity
3.07
III International Regulatory Bodies and Standards
3.08
3.09
3.10
3.11
3.12
3.13
3.14
IV The Authorization of IFIs: The United Kingdom Example
A A Non-Discriminatory Regime
3.15
3.16
B AAOIFI Standard as Best Practice Guidelines for Establishing an IFI
3.17
C Prudential and Governance Standards for IFIs
3.18
(1) The IFSB Capital Adequacy Standard for Institutions (Other than Insurance Institutions) Offering Only Islamic Financial Services, 2005 (IFSB CAS)
3.19
3.20
3.21
3.22
3.23
3.24
(2) Disclosures to Promote Transparency and Market Discipline for Institutions Offering Islamic Financial Services, 2007 (IFSB PTMDS)
3.25
(3) The Guiding Principles on Shari’a Governance Systems for Institutions Offering Islamic Financial Services, 2009 (IFSB SGSP)
3.26
D The Shari’a Supervisory Board
3.27
3.28
3.29
3.30
3.31
3.32
E The ‘Islamic Window’
3.33
3.34
3.35
V The Regulatory Classification of the Products Provided by IFIs: The United Kingdom Example
A Introduction
3.36
3.37
B CIS Regulation and Shari’a-Compliant Arrangements
3.38
3.39
3.40
3.41
C Mudaraba as Deposits
3.42
3.43
3.44
D Musharaka as a CIS?
3.45
E Salam and Istisna’ as Futures?
3.46
3.47
3.48
3.49
F Ijara and Islamic Mortgages
3.50
3.51
3.52
G Sukuk as Units in a CIS
3.53
3.54
3.55
3.56
3.57
3.58
3.59
3.60
H Takaful
3.61
3.62
4 Dispute Resolution and Specialized ADR for Islamic Finance
Preliminary Material
I Introduction
4.01
4.02
II IDR is Necessary to Support the Growth of Islamic Finance
4.03
4.04
4.05
4.06
4.07
4.08
4.09
III Existing Models of Commercial ADR
4.10
IV IDR as an Islamic Model of Commercial ADR
4.11
A IDR is Based upon the Qur’an and the Sunna
4.12
4.13
4.14
4.15
B IDR is Grounded in the Islamic Tradition of Sulh
4.16
4.17
4.18
4.19
4.20
C IDR Provides Unique Expertise to Resolving Islamic Finance Disputes
4.21
4.22
4.23
4.24
D IDR Provides a Unique Procedural Approach to Resolving Islamic Finance Disputes
4.25
4.26
4.27
4.28
4.29
V Drafting Dispute Resolution Clauses and Agreements for Islamic Finance Disputes
4.30
4.31
A Qualifications of IDR Intermediaries in Islamic Finance
4.32
4.33
4.34
4.35
4.36
4.37
4.38
4.39
4.40
4.41
4.42
4.43
B Choice of Governing Law
4.44
4.45
4.46
4.47
4.48
4.49
4.50
C Avoiding Gharar as a Shari’a Defence
4.51
4.52
4.53
4.54
4.55
4.56
4.57
4.58
D Proposed IDR Clause or Agreement
4.59
4.60
4.61
4.62
VI Conclusion
4.63
4.64
4.65
5 Corporate Governance for Institutions Offering Islamic Financial Services
Preliminary Material
I Introduction
5.01
5.02
II Stewardship
5.03
5.04
5.05
III The Relevance of Shari’a
5.06
5.07
A Determination of Legality under Shari’a
5.08
5.09
5.10
B Obligations of Disclosure
5.11
5.12
5.13
C Differences in Traditions or Interpretations
5.14
D Principle of Necessity
5.15
E Legal Responsibility or Affirmative Obligations
5.16
F Criminal Activity in Islamic Law
5.17
5.18
5.19
5.20
IV Governance and the Shari’a
5.21
5.22
5.23
5.24
A Legal Risk and Responsibility
5.25
5.26
5.27
5.28
5.29
5.30
V The Sharp Issues for Governance
5.31
5.32
5.33
VI Integrity and Accountability
A Fiduciary Obligations
5.34
5.35
5.36
5.37
5.38
B Secret and Unauthorized Profits
5.39
VII The Responsibility to Protect
5.40
5.41
5.42
5.43
A The Consequences of a Prohibited Act
5.44
5.45
5.46
5.47
VIII Complicity in Misconduct
5.48
5.49
5.50
5.51
A Direct and Indirect Liability
5.52
5.53
5.54
5.55
5.56
5.57
5.58
5.59
5.60
5.61
5.62
5.63
5.64
5.65
5.66
5.67
5.68
5.69
5.70
5.71
5.72
IX The Shari’a Board
5.73
5.74
5.75
5.76
5.77
5.78
5.79
5.80
5.81
5.82
X Conclusion
5.83
5.84
Part II Islamic Law and Contracts in Practice
6 Musharaka and Mudaraba
Preliminary Material
I Introduction
6.01
6.02
6.03
II Musharaka
A Linguistic Origins
6.04
6.05
B Contractual Features
6.06
6.07
6.08
6.09
C Applications
6.10
6.11
6.12
6.13
6.14
6.15
D Musharaka as a Financing Tool: Diminishing Musharaka
6.16
6.17
6.18
6.19
6.20
6.21
E Diminishing Musharaka: Events of Default Triggers
6.22
F Purchase Undertaking Triggered by ‘Event of Default’
6.23
6.24
6.25
6.26
G General Indemnity
6.27
6.28
H Diminishing Musharaka: Basis of Financing Recovery
6.29
6.30
III Mudaraba
A Linguistic Origins
6.31
6.32
6.33
B Early Examples
6.34
6.35
C Contractual Features
6.36
6.37
6.38
6.39
6.40
6.41
6.42
6.43
D Requirements and Limitations
6.44
6.45
6.46
6.47
E Modern Financial Applications
6.48
6.49
6.50
6.51
6.52
6.53
6.54
6.55
6.56
6.57
6.58
6.59
6.60
7 Murabaha and Tawarruq
Preliminary Material
I Introduction
7.01
7.02
7.03
7.04
7.05
II The Basic Features
7.06
7.07
A Price and Profit
7.08
7.09
B Time for Payment
7.10
C Title to Goods
7.11
D Bilateral or Syndicated
7.12
E Actual Sale
7.13
F Nature of the Goods
7.14
III Documentary Phases of the Murabaha
7.15–7.16
7.17
IV Security for Performance
7.18
7.19
7.20
V Murabaha in Application
7.21
A Commodity Murabaha (Tawarruq)
7.22
7.23
7.24
7.25
7.26
7.27
B Examples of Application of the Murabaha and Tawarruq
(1) An example: asset finance
7.28
(2) An example: acquisition finance
7.29
7.30
(3) An example: murabaha interbank funding
7.31
(4) An example: murabaha retail deposit
7.32
(5) An example: murabaha in risk management
7.33
(6) An example: murabaha in sukuk
7.34
7.35
VI Financial Regulation of Murabaha Activities
7.36
VII Specific Legal Issues
A Interbank Reference Rates and Calculation of Murabaha Profit
7.37
7.38
7.39
B Voluntary/Early Repayment
7.40
C Default and Restructuring
7.41
7.42
7.43
7.44
7.45
7.46
7.47
D Murabaha in the Courts
7.48
7.49
7.50
7.51
7.52
7.53
7.54
7.55
7.56
8 Derivatives and Islamic Finance
Preliminary Material
I Introduction
8.01
8.02
8.03
II Bay’ Salam
A Background
8.04
8.05
8.06
8.07
8.08
B Special Conditions Applicable to Bay’ Salam
8.09
(1) Price (ra’s al-mal)
8.10
8.11
8.12
8.13
8.14
(2) Subject matter (al-musallam fihi)
8.15
8.16
8.17
(3) Delivery
8.18
8.19
8.20
8.21
(4) ‘Parallel’ salam
8.22
8.23
8.24
III Bay’ ‘Urbun
8.25
8.26
8.27
8.28
8.29
IV Khiyarat
8.30
8.31
8.32
8.33
V Call and Put Options
A Call Options
8.34
8.35
8.36
B Put Options
8.37
8.38
VI Wa’d
8.39
8.40
8.41
8.42
8.43
VII ISDA/IIFM Tahawwut (Hedging) Master Agreement
8.44
8.45
8.46
8.47
8.48
8.49
8.50
8.51
8.52
8.53
8.54
8.55
VIII Cross-Currency Swaps (Himaayah Min Taqallub Asʿaar Assarf)
8.56
8.57
8.58
IX Foreign Exchange Forwards (Wiqayah Min Taqallub Asʿaar Assarf )
8.59
X Profit Rate Swaps (Mubadalatul Arbaah)
8.60
XI Conclusion
8.61
8.62
9 Istisna’ and Ijara
Preliminary Material
I Introduction
9.01
II Istisna’
9.02
A Origin
9.03
9.04
B Istisna’ and Salam
9.05
9.06
III Basic Features
A Binding Nature
9.07
9.08
B Subject Matter
9.09
C Price and Payment
9.10
9.11
9.12
9.13
9.14
D Amendments
9.15
E Delivery and Acceptance
9.16
9.17
9.18
F Delay and Default
9.19
9.20
G Security for Performance
9.21
H Parallel Istisna’
9.22
9.23
9.24
I Istisna’ and Ijara Combination
9.25
IV Ijara
9.26
A Origin
9.27
9.28
V Basic Features
9.29
A Ijara and Bay’ Distinguished
9.30
B Asset and Ownership
9.31
9.32
9.33
9.34
9.35
C Istisna’/Ijara’ Combination
9.36
D Wakala/Ijara Combination
9.37
9.38
9.39
9.40
9.41
E Rent
9.42
9.43
9.44
F Commencement and Termination
9.45
9.46
9.47
G Late Payment
9.48
H Security for Performance
9.49
I Undertakings to Purchase or Sell
9.50
9.51
9.52
J Insurance
9.53
9.54
9.55
9.56
9.57
K Maintenance
9.58
L Managing the Risks and Obligations of Ownership
9.59
M Financial Regulation and Taxation of Ijara Activities
9.60
VI Case Studies
A Petro-Rabigh Case Study (Istisna’/Ijara Combination)
9.62
(1) The Islamic investors
9.63
9.64
(2) The structure: istisna’ and ijara
9.65
9.66
(3) Insurance and replacement assets
9.67
9.68
9.69
(4) Intercreditor arrangements
9.70
(5) Service agency
9.71
(6) Purchase and sale undertakings
9.72
B PP-11 Case Study (Wakala/Ijara Combination)
9.73
9.74
(1) The structure: wakala and ijara
9.75
9.76
9.77
(2) Service agency
9.78
(3) Destruction of wakala assets
9.79
C Hajj Terminal Case Study (Intangible Asset)
9.80
9.81
9.82
9.83
(1) Investment agent
9.84
9.85
(2) Purchase and sale undertakings
9.86
9.87
VII Structures in the Courts
A Wakala Agreements: The Investment Dar Company KSCC v Blom Developments Bank SAL
9.88
9.89
B Purchase Undertakings: Dana Gas PJSC v Dana Gas Sukuk Limited
9.90
9.91
9.92
9.93
10 Takaful
Preliminary Material
I Introduction
10.01
10.02
10.03
II What is Takaful?
A Meaning of Takaful
10.04
10.05
B Distinction from Conventional Insurance
10.06
10.07
10.08
III Why not Conventional Insurance?
10.09
10.10
A Gharar
10.11
10.12
10.13
B Maysir
10.14
10.15
10.16
10.17
C Riba
10.18
D Lack of Authority
10.19
E Contrary to Divine Will
10.20
10.21
10.22
IV How Takaful Resolves these Criticisms
10.23
A Risk Sharing not Risk Transfer
10.24
B Mutual Structure
10.25
10.26
10.27
C Doctrine of Tabarru (Donation)
10.28
10.29
10.30
10.31
10.32
D Investments
10.33
10.34
E Return of Surplus
10.35
10.36
10.37
F Deficits
10.38
10.39
10.40
10.41
V Structures
10.42
10.43
10.44
10.45
10.46
A A Comparison of the Wakala and Mudaraba Models
10.47
10.48
10.49
B Blended Wakala/Mudaraba Model
10.50
10.51
C Waqf Model
10.52
10.53
10.54
10.55
10.56
VI Distinctions between Takaful, Conventional Insurance, and Mutual Insurance
10.57
VII Takaful Policies
10.58
A The Contractual Matrix
10.59
10.60
10.61
10.62
B The Takaful Policy
10.63
10.64
VIII Takaful and Reinsurance
A Retakaful
10.65
10.66
10.67
10.68
B Conceptual Difficulty
10.69
10.70
10.71
10.72
10.73
C Retakaful Contracts
10.74
10.75
D Can Takaful Operators Purchase Conventional Reinsurance?
10.76
10.77
10.78
10.79
10.80
10.81
IX Takaful Windows
10.82
10.83
10.84
A The Conflict of Interest Arising in Islamic Windows for Takaful
10.85
10.86
10.87
10.88
10.89
B Other Arguments against Islamic Windows
10.90
C The Benefits of Islamic Windows
10.91
10.92
X Captive Takaful
10.93
10.94
A Features of Captives
10.95
B Advantages of Captives
10.96
C Available Structures
10.97
10.98
D Takaful Captives
10.99
XI Distribution
10.100
A Brokers/Independent Financial Advisors
10.101
10.102
10.103
B Bancatakaful
10.104
10.105
10.106
10.107
10.108
XII Claims
10.109
10.110
10.111
A Misrepresentation/Non-Disclosure
10.112
10.113
B Non-Payment of Contributions
10.114
C Breach of Notification Provisions
10.115
10.116
D Other Exclusions
10.117
E Indemnity
10.118
XIII Corporate Governance
10.119
10.120
10.121
10.122
10.123
10.124
10.125
10.126
Appendix One: Terminological Distinctions
11 Sukuk
Preliminary Material
I Introduction
11.01
11.02
II History and Background to the Development of the Modern Sukuk Market
A Historical Origins of Sukuk
11.03
B Development of Sukuk as a Modern Capital Markets Product
11.04
11.05
III What Are Sukuk and How Do They Differ from Bonds?
A What are Sukuk?
11.06
11.07
11.08
11.09
B Islamic Principles Relevant to Sukuk
11.10
11.11
C How Do Sukuk Differ from Bonds?
11.12
D Modern Sukuk Structures and Recent Developments
11.13
11.14
(1) AAOIFI and controversy around sukuk structures
11.15
11.16
11.17
(2) Recent developments
11.18
11.19
11.20
11.21
IV Commonly Used Sukuk Structures and Related Issues
11.22
11.23
A Sukuk al-Ijara
11.24
11.25
B Sukuk al-Musharaka and Sukuk al-Mudaraba
(1) Sukuk al-musharaka
11.26
11.27
11.28
11.29
(2) Sukuk al-mudaraba
11.30
11.31
(3) Capital instruments
11.32
(4) Hybrid sukuk structures
11.33
11.34
11.35
C Other Sukuk Structures
11.36
(1) Sukuk al-wakala
11.37
11.38
11.39
(2) Sukuk al-manaf’a / Airtime Sukuk
11.40
11.41
D Documentary Requirements for Sukuk Issuances
11.42
11.43
E Secondary Market Trading
11.44
11.45
V Legal Developments and Other Legal Issues
A Position of Certificateholders Following a Default
11.46
11.47
11.48
11.49
B Legislative Reform
11.50
11.51
11.52
11.53
VI Conclusion
11.54
12 Shari’a-Compliant Funds: Principles and Practical Considerations
Preliminary Material
I Introduction
12.01
12.02
12.03
12.04
12.05
12.06
12.07
A Concentration
12.08
12.09
12.10
12.11
B The Case for Shari’a-Compliant Funds
12.12
12.13
12.14
12.15
12.16
12.17
12.18
12.19
12.20
12.21
12.22
12.23
II Application of Shari’a Principles to Funds
12.24
12.25
12.26
12.27
12.28
A Riba
12.29
12.30
12.31
12.32
12.33
12.34
12.35
12.36
12.37
(1) Tier 1: fund level
12.38
12.39
12.40
12.41
12.42
12.43
(2) Tier 2: investment execution
12.44
12.45
(3) Tier 3: portfolio company profile
12.46
12.47
12.48
12.49
12.50
B Unjust Enrichment
12.51
12.52
12.53
12.54
12.55
C Gharar
12.56
12.57
12.58
12.59
12.60
D Maysir
12.61
12.62
12.63
E Prohibited Investments
12.64
12.65
12.66
12.67
12.68
12.69
III Asset Classes and Principles
12.70
A Mutual Funds and Equities
12.71
12.72
12.73
12.74
B Commodities
12.75
12.76
12.77
12.78
12.79
C Real Estate
12.80
12.81
12.82
12.83
12.84
12.85
12.86
D Lease Funds
12.87
12.88
E Alternative Assets
12.89
12.90
12.91
IV Structuring a Shari’a-Compliant Fund
12.92
A Structures
12.93
(1) Wakala
12.94
12.95
12.96
(2) Mudaraba
12.97
12.98
12.99
12.100
12.101
12.102
12.103
B Jurisdictions
12.104
12.105
12.106
12.107
12.108
V Establishing and Operating a Shari’a-Compliant Fund
12.109
A Shari’a Supervisory Board
12.110
12.111
12.112
12.113
12.114
12.115
B Fund Establishment Process
12.116
12.117
C Annual Audits
12.118
VI Shari’a-Compliant Fund Operations: Practical Considerations
12.119
12.120
A Equity Funds
12.121
12.122
12.123
12.124
12.125
12.126
12.127
12.128
12.129
12.130
12.131
12.132
12.133
12.134
12.135
B Fixed Income Funds
12.136
12.137
12.138
12.139
12.140
12.141
12.142
12.143
C Real Estate Funds
12.144
12.145
12.146
D Structured Investment Funds
12.147
12.148
12.149
12.150
12.151
12.152
12.153
12.154
12.155
12.156
12.157
12.158
12.159
12.160
12.161
12.162
12.163
12.164
12.165
12.166
12.167
12.168
12.169
12.170
12.171
12.172
12.173
12.174
12.175
12.176
12.177
12.178
12.179
12.180
12.181
12.182
12.183
Further Material
Appendix Guide to Selected Further Reading
Islamic Religion
Islamic Law
Islamic Economics and Finance
Financial Products
Periodicals
Index
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Table of Cases
Craig R. Nethercott, David M. Eisenberg
From:
Islamic Finance: Law and Practice (2nd Edition)
Edited By: Craig R. Nethercott, David M. Eisenberg
Content type:
Book content
Product:
Financial Law [FBL]
Published in print:
27 February 2020
ISBN:
9780198725237
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