Unilateral contract of guarantee
What is kafala in Islam?
In some Islamic countries; including Egypt, the term ‘Kafala’ of Islamic law is used to describe a situation similar to adoption, but not necessarily with the transference of inheritance rights, or the change of the child’s full name.
What is a Kafalah loan?
Kafalah is the guarantee for a loan and all loans must be repaid in due course according to Islamic law.
What is a Kafalah contract?
A contract of guarantee/ suretyship which is used to provide assurance as to performance or liabilities. In other words, kafalah is instrumental to terminate any adverse change that may lead to uncertain or unpredictable outcomes with respect to the object or underlying of a transaction.
Is there a western counterpart to the concept of Kafalah?
There may be no western counterpart to the concept of kafalah; however, this does not mean that open adoptions cannot evolve by taking into consideration some of the Islamic objections while, at the same time, mining the Quran’s heavy emphasis on helping orphans and preserving child welfare to expand the notion of kafalah.
What is an IBG in Islamic banking?
RHB Islamic Bank issues IBG to the customer, as a surety to discharge the liability of beneficiary in case the customer defaults. In return, a sum amount of fee is charged to the customer.
What is kafalah practiced in Malaysia?
The practice in Malaysia had shown that Kafalah concept is usually practiced by Islamic Banks in trade financing sector in two products which are bank guarantee and shipping guarantee. For this, we can look at bank-guarantee product from RHB Islamic Bank. Below figure illustrates how Kafalah is undertaken in a letter of guarantee by RHB Islamic Bank.
What is the role of kafalah in international trade?
In international trade and finance, kafalah plays an important role in facilitating trade across border by which the bank is asked as a guarantor of payment in the international trade transaction. Islamic banks are able to offer bank guarantee, standby letter of credit and shipping guarantee using the concept of kafalah.
What is kafalah in trade?
International Trade. Kafalah is the guarantee for a loan and all loans must be repaid in due course according to Islamic law. The law allows the lenders to demand some sort of security for the loan in the cases where the borrower fail to repay the loan.
Does the Islamic Fiqh Academy charge a fee?
In contrast, some contemporary scholars like Shaykh Ahmad Ali Abdullah from the OIC International Islamic Fiqh Academy permits charging a fee provided that the guarantee is not in the form of a loan (Qard). Besides that, there is no issue on riba as the commitment provided from the guarantor is considered as counter value following the fiqh maxim – al kharaj bi daman (profit comes with liability). The Shariah Advisory Council of Bank Negara Malaysia has allowed charging fee on letter of guarantee based on this basis.
Does RHB charge a fee for a guarantee?
In bank guarantee, the guarantor (RHB Islamic Bank) charges the customer a certain fee. However, this practice remains a matter of debate among Shariah scholars. This is because some scholars like Hanafi, Shafie, Maliki and Hambali schools did not permit charging fee for a guarantee due to the nature of the contract (benevolent contract) …
Does RHB Islamic Bank make immediate payments?
RHB Islamic Bank makes immediate payment on first demand provided the claim meets all the conditions of the guarantee. If there is no default, the beneficiary will return the IBG to the customer followed by RHB Islamic Bank’s cancellation upon maturity.
What does kafala mean?
What does Kafala (Islamic Adoption) mean? Adoption is the formal, permanent transfer of parental rights to a family other than a child’s own and the formal assumption by that family of all parenting duties for the child. In some Islamic countries; including Egypt, the term ‘Kafala’ of Islamic law is used to describe a situation similar to adoption, …
Is an adopted child a mahram?
Adopted child is not a mahram , so it is obligatory for parents who nurture him/her and their children to wear a hijab in front of the adoption, as when they are in front of other non- mahram. This is contrary to the customs in the time of Jahiliyyah.
Do adopted children inherit inheritance?
Adopted children are not entitled to the inheritance of the parents who nurtured them, in contrast to the customs of the time of Jahiliyyah who regarded adopted children as biological children who were entitled to inheritance when their adoptive parents died.  3.
What is the difference between Hawalah and Kafalah?
The main difference between hawalah and kafalah is that the principal debtor is released from the debt under hawalah contract whereas kafalah is not. Below table gives a comparison of hawalah, wakalah and kafalah which is based on …
What does kafalah mean?
Kafalah is an Arabic word for responsibility, amenability or suretyship. It often refers to an act of someone adding himself to another person, and making himself liable to perform the responsibility, together with the person.
What are the rules of Kafalah?
1. Guarantor who is of sound mind, has legal capacity and willingly give his consent and agreement to the contract. 2. Debtor, he does not need to have legal capacity and can even be a minor, insane person or a bankrupt. 3.
What are the conditions of a Wakil contract?
There are four (4) conditions pertaining to the basis of wakalah contract. 1. The muwakkil shall authorize a specific wakil and notify him of his appointment . 2. The Wakil (Bank) agent (wakil) to perform a particular task, in matters that may be delegated , either voluntarily or with imposition of a fee. 3.
Who said "Delinquency of rich debtors is a form of transgression"?
The hadith reported by Al-Bayhaqi, in which the Prophet ??? ???? ???? ???? have said: “Delinquency of rich debtors is a form of transgression, so if one of you has his debt transferred to a rich person, let him accept the transfer of debt” (Narrated by Ahmad and the author of six books of Hadith as well as Ibn Shaybah and Al-Tabarani in his ‘Awsat on the authority of Abu Hurayrah).
Is wakalah permissible?
From the ijma’ the jurists agreed that wakalah is permissible and recommended based on ta’awun concept. Kafalah can be seen in the Sunnah of the Prophet Muhammad S.A.W., where Abu Qatadah asked the Prophet to pray for a man to whom he (Abu Qatadah) had been a guarantor for a debt.
What was the Harroudj v. France case?
Lastly, on October 4, 2012, in Harroudj v. France, the ECHR upheld France’s refusal to allow an Algerian woman to adopt an Algerian baby, who was already under her care and control, pursuant to the Islamic kafalah guardianship system. The Harroudj decision focused and turned on other issues, but for our purposes, the Chamber’s observations on the kafalah system are timely and encouraging. The court observed that under the UN Convention on the Rights of the Child, the kafalah model is accepted and defined as “alternative care,” which it deemed on par with adoption. The court also noted that the fact kafalah is acknowledged under international law should be a decisive factor in determining how States should accommodate it in their domestic law and deal with any conflicts that may arise. The court further noted that kafalah was fully accepted in French law and the granting of guardianship to Harroudj enabled her to make all the decisions in the child’s interest. In other words, Harroudj was not deprived of any rights in not being allowed to change the kafalah to adoption. This acknowledgement is a great step in the right direction and provides much in working toward a mutually accommodating framework for Islamic adoptions.
What is the third source of tension in Islam?
A third source of tension emanates from a very limited understanding and characterization of Islamic law. The context specific and evolutionary nature of the Shariah (which is much broader than Islamic law), Islam’s emphasis on child welfare, the maqasid al shariah (higher objectives of the Shariah), the principles of Islamic jurisprudence and the significance of human agency in the formulation of or “discovery” of fiqh (the actual laws derived from the Shariah) provides much leeway in reforming Islamic legal rules on adoption.
Is there a gap between Western and Islamic adoption?
First, there is a definite gap between Western and Islamic law on adoptions. Islamic jurists are unanimous in holding that traditional closed adoption violates Islamic rules which emphasize lineage. Islamic jurists devised a guardianship model known as kafalah to work around this and to take into consideration the religious restrictions. Indeed, even some in the West have concerns about closed adoptions and have championed open adoptions, which are increasingly gaining traction. With respect to the Islamic context, there is still a gray area between the kafalah model and open adoptions that must be addressed and reconciled.
Who is Faisal Kutty?
Faisal Kutty is an assistant professor at Valparaiso University School of Law in Indiana and an adjunct professor at Osgoode Hall Law School in Toronto. His areas of interest are legal writing & reasoning, comparative law, international law, human rights and Islamic law. His most recent work on the intersection of common law and the Shari’ah is a chapter in Debating Sharia: Islam, Gender Politics, and Family Law Arbitration, published by the University of Toronto Press this past summer.
When did the European Court of Human Rights decide Harroudj v. France?
Four recent developments in the context of Islam and adoptions, including the European Court of Human Rights (ECHR) decision of October 4, 2012 (though not yet final), in Harroudj v. France, provide for some optimism that we may be at the cusp of a sea change in this area.
Who is responsible for the opinions expressed in the Jurist Commentary?
Opinions expressed in JURIST Commentary are the sole responsibility of the author and do not necessarily reflect the views of JURIST’s editors, staff, donors or the University of Pittsburgh.
Is adoption legal in Islam?
Unfortunately, given that the group does not represent traditional male scholarship, the mainstream may not feel bound by the study at this stage. Islamic legal tradition is replete with instances where what was initially considered beyond the pale , or even heretical, became accepted by the mainstream over time through the principle of ijma.