Report Islamic Financial Cases Essay

4433 Words Dec 13th, 2013 18 Pages
SUMMARY

Dato’ Hj Nik Mahmud v. BIMB (1996)

* FACTS: * The plaintiff with attorney had entered into a PSA and PPA with the defendant in respect of 25 lots of land in BBA concept. * The defendant purchased the properties and resold back to the plaintiff with additional prices and charges. * The plaintiff applied for an order that the charges be declared null and void. * He also applied for the return the titles of the properties, free of all encumbrances. * ISSUES: * Whether sale of land in accordance with IB Concept of BBA contravened the Malay Reservations Enactment 1930 of Kelantan. * Whether purchase and resale of land for profit by bank contravened the Malay Reservations
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Many Islamic finance transactions are governed by English law or the law of another country, instead of Sharia law. Sharia is a set of moral and religious principles rather than a codified body of laws. These types of transactions often take place on a global level, with parties originating from different regions in the world. For example a Swiss bank may launch a Sharia compliant financial product aimed at investors in the Middle East using documentation governed by English law. Due to the diverse backgrounds of the parties involved, the specialist nature of the agreements and the potential variety of legal jurisdictions in play, there may be considerable benefits in having an authoritative common platform to resolve disputes as they arise in a manner that is guided by Sharia within a modern commercial context.

The tendency to favour litigation
Litigation (the resolution of disputes through the courts) is the most well known method of determining disputes. Amongst some entities working in Islamic finance there is scepticism towards alternative forms of dispute resolution, such as international arbitration and mediation. At the Asia Pacific Regional Arbitration Group Conference 2011,Hakimah Yaakob, of the International Shariah Research Academy for Islamic Finance in Kuala Lumpur, stated that, following a survey that she conducted of 10 Islamic

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