Assalamualaikum and happy Maal Hijrah,
Dear Readers,
I am very pleased to share my recent article entitled “Shari’ah and Legal Issues in Al-Bay’ Bithaman Ajil in the Case of of Arab-Malaysian Finance Bhd V Taman Ihsan Jaya Sdn Bhd & Ors [2008] 5 MLJ”. This recent High Court case discusses in length issues involved in BBA facility which is widely utilized by Islamic banks in Malaysia. It is observed that, the early cases of BBA in the first phase of Islamic banking (1983-2002) witness the application of classic common law approach by the court whereas in the second phase (2003-2007), the court indicates interest to exercise its constitutional duty to ensure that Islamic financial instruments are complied with the IBA and the BAFIA. Finally, the current High Court case offers constructive and pro-active approach by the learned judge upon the disputed issues in BBA facility by examining the overall facts of the case and applying the equitable principle as well as considering Shari’ah as the grounds of judgment.
After careful consideration and meticulous analysis, the court arrives at conclusion to decree that the profit derived from BBA facility is unlawful and rendered the transaction null and void. This decision will notably affect Islamic financial institutions in Malaysia since the judgment obviously declares that defaulters in BBA facility are only liable as to the original facility amount and not the selling price unless the current appeal made by the respective plaintiffs is allowed by the Court of Appeal in the future. The recent judgment strongly demonstrates that the court with its constitutional duty to ensure that Islamic financial instruments are in accordance with the IBA and the BAFIA also provides very significant contribution to the development of Islamic financial system particularly in the aspect of administration of justice.
For full article Click Here
Enjoy Reading!
Best Regard
ZULKIFLI HASAN
DURHAM UNIVERSITY
ZULKIFLI HASAN
