SHARIAsource

This Country Profile provides a basic overview of the legal history and institutional structures of the French Republic (Republique Francaise), based on research produced by GlobaLex at NYU Law School and the Library of Congress. Under France's Constitution, Islamic law (sharīʿa or fiqh) has no legal status.

This Country Profile provides a basic overview of the legal history and institutional structures of the Federated States of Micronesia, based on research produced by the Library of Congress. Under Micronesia's Constitution, Islamic law (sharīʿa or fiqh) has no legal status. 

This Country Profile provides a basic overview of the legal history and institutional structures of the Independent State of Papua New Guinea (Papuaniugini), based on research produced by the Library of Congress. Under Papua New Guinea's Constitution, Islamic law (sharīʿa or fiqh) has no legal status. 

This Country Profile provides a basic overview of the legal history and institutional structures of New Zealand, based on research produced by GlobaLex at NYU Law School and the Library of Congress. Under New Zealand's Constitution, Islamic law (sharīʿa or fiqh) has no legal status. 

This Country Profile provides a basic overview of the legal history and institutional structures of Antigua and Barbuda, based on research produced by the Library of Congress. Under Antigua and Barbuda's Constitution, Islamic law (sharīʿa or fiqh) has no legal status. 

This Country Profile provides a basic overview of the legal history and institutional structures of the Cooperative Republic of Guyana, based on research produced by the Library of Congress. Under Guyana's Constitution, Islamic law (sharīʿa or fiqh) has no legal status. 

This Country Profile provides a basic overview of the legal history and institutional structures of the Arab Republic of Egypt (Jumhuriyat Misr al Arabiyah), based on research produced by GlobaLex at NYU Law School and the Library of Congress. Under Egypt's Constitution, Islamic law (sharīʿa or fiqh) is the principal source of legislation. 

This Country Profile provides a basic overview of the legal history and institutional structures of the Republic of Serbia (Republika Srbija), based on research produced by GlobaLex at NYU Law School and the Library of Congress. Under Serbia’s Constitution, Islamic law (sharīʿa or fiqh) has no legal status.

The plaintiff submitted that, on 24 June 2011, he and the defendant had entered into a murabahah financing agreement for a 2011 Daihatsu vehicle. Pursuant to the agreement, the plaintiff was to pay to the defendant IDR 198,060,000. This figure comprised the price of the vehicle, insurance, as well as other incidental costs. The parties agreed that the plaintiff would pay this sum in 52 monthly payments of IDR 3,301,000, which, for the first seven months, the plaintiff did. On the eighth month, however, a person borrowing the vehicle from the plaintiff did not return it, causing the plaintiff to report the vehicle stolen to the police. The plaintiff requested that the defendant grant him a grace period vis-à-vis repayments while the police conducted its investigation into the vehicle’s whereabouts. The defendant, however, reported the plaintiff to the police for dealing with the vehicle inappropriately by transferring it to a third party. (The defendant had perceived the vehicle to be a fiduciary security guarantee.) The plaintiff cited art 55 of Law No. 21 of 2008 on Shari’a Banking, claiming that the defendant should have instead sought to resolve the issue pursuant to shari’a principles, via deliberation (musyawarah), banking mediation, through the National Shari’a Arbitration Body (Badan Arbitrase Syariah Nasional – BASYARNAS), or, if necessary, the religious courts. Moreover, that the grounds invoked by the defendant in his police report repudiated the fiduciary principles of the agreement, and were contradictory to the principles of shari’a. In principle, the plaintiff argued, a murabahah agreement is a financing facility designed to benefit both parties. It is instigated by a capital holder (shahib al-mal) with another party in need via a sale-purchase transaction, clear that the sale price includes a profit for the capital holder and is to be repaid in cash or instalments (art 20(6) of Supreme Court Regulation No. 2 of 2008 on the Compilation of Shari’a Economy Laws). By repudiating the plaintiff’s request for a grace period, the plaintiff claimed that the defendant had, in fact, turned the agreement into a fiduciary security guarantee agreement. For pain and suffering, the plaintiff sought IDR 300 million.

Citing art 1338 of the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata), as well as the principle of Pacta Sunt Servanda (agreements must be kept), the defendant lodged an objection to the perceived absolute authority of the court to adjudicate the case. The defendant stated that both he and the plaintiff had agreed (in art 8(2) of their agreement) to resolve any disputes arising from the agreement before the Yogyakarta State Court (Pengadilan Negeri Yogyakarta), if initial deliberation proved unsuccessful. In other words, the parties had agreed to preclude the court from having jurisdiction over the case. To strengthen his claim regarding a civil court adjudicating a shari’a banking dispute, the defendant cited art 55(2) of Law No. 21 of 2008, including the Elucidation of art 55(2).

The defendant lodged three other objections:

1. that while the plaintiff had incorrectly filed his complaint against a Maman Suryanto, rather than the defendant, he still should have filed his complaint against the company represented by the defendant, rather than the defendant personally;
2. that the damages for pain and suffering sought by the plaintiff were not supported by sufficiently clear particulars and authentic evidence; and
3. that the plaintiff’s assertion that the defendant had transformed the agreement into a fiduciary guarantee agreement was premature in that it was contingent upon the police investigation into whether or not the plaintiff’s conduct constituted a criminal transfer of a fiduciary security guarantee (the vehicle), contrary to art 372 of the Indonesian Criminal Code (Kitab Undang-Undang Hukum Pidana) and art 36 of Law No. 42 of 1999 on Fiduciary Guarantees.

As part of his counterclaim, the defendant sought to have the court find that the plaintiff had defaulted on his repayments. The defendant claimed he had reminded the plaintiff several times, verbally and in writing, to make the eighth repayment, but the plaintiff had still defaulted. The defendant sought IDR 674,953,000 in material and immaterial loss, requested that the court guarantee this sum against the plaintiff’s current and future assets, as well as the Daihatsu vehicle, and sought an additional IDR 1 million for every day the plaintiff was late in making repayments.

First, the court noted that the defendant’s claim regarding the court’s judicial authority (or lack thereof) had been dismissed in an interlocutory decision on 17 June 2014. It assented to the defendant’s first objection, however, dismissing the case on the grounds that the defendant lacked the necessary legal standing, and that, therefore, the plaintiff should have submitted its claim against the company of the defendant, rather than against the defendant himself.

The plaintiffs submitted that, in April 2013, the second defendant (employee of PT. Bank SUMUT (first defendant)), via the third defendant, had told Muhammad Erwin (third plaintiff) that he would be released from his financial obligations under his current home loan if he could find a new purchaser for a separate property in the name of Walidi (Walidi property). The third plaintiff alleged that the third defendant had obtained this information from the second defendant because the second defendant and the first defendant's audit team had encountered an irregularity vis-a-vis the Walidi property.

Based on the second defendant's request (via the third defendant), the plaintiff instructed the third defendant to undertake to find a new purchaser for the Walidi property. The third plaintiff and third defendant visited the first plaintiff (Jaka Mulia Damanik) at his home, and asked if the first plaintiff would like to become the new purchaser of the Walidi property. The first plaintiff agreed to do so on the condition that the third plaintiff would loan him IDR 20 million for a separate project. The third plaintiff agreed to do so once the first defendant had released him from his financial obligations pursuant to his own home loan.

On 29 April 2013, at the office of the second defendant, prior to the first plaintiff signing the agreement to purchase the Walidi property, the third defendant encountered the third plaintiff. The third plaintiff was at the second defendant's office to loan to the first plaintiff the IDR 20 million. The third defendant believed this loan money was the down-payment for the purchase of the Walidi property, and, accordingly, told the third plaintiff that the money would be returned that day after the first plaintiff had signed his purchase agreement for the Walidi property. After receiving the money, the third defendant departed quickly, failing to provide the third plaintiff with a receipt for the money. The third plaintiff assumed that the third defendant worked for the first defendant, and that the money would be returned that day upon execution of the Walidi property agreement.

The third defendant allegedly told the third plaintiff that the IDR 20 million, requested by the third defendant for, and on behalf of, the first plaintiff, was a down-payment on the Walidi property agreement. The third defendant also instructed the third plaintiff that it be returned immediately, and that there would be a new purchaser for the Walidi property within the next two months.

On 29 April 2013, after the first plaintiff signed the agreement, transferring ownership of the property from Walidi to the first plaintiff, the first plaintiff was asked by the third defendant to sign a blank withdrawal form. The first defendant, however, did not receive a carbon copy of the withdrawal form. The third plaintiff also sought to recoup his IDR 20 million from the third defendant, but was told by the third defendant to wait two months until there was a new purchaser for the Walidi property. The IDR 20 million had still not been returned by the time the plaintiffs filed their application with the court.

Also on 29 April 2013, the plaintiffs submitted that the first defendant debited the first plaintiff IDR 256 million, without his prior knowledge. The first defendant also credited the first plaintiff with IDR 50 million for overbooking, the defendants claiming that the IDR 50 million designated to pay for objects required by the developer had to originate from the first plaintiff's personal account. The first plaintiff claimed this to be fraudulent on the part of the first defendant.

Ten days after the agreement had been executed, the first plaintiff sought to enforce his agreement with the third plaintiff for IDR 20 million. On Friday 10 May 2013, the third plaintiff transferred IDR 20 million to the first plaintiff's bank account.

On 31 May 2013, the first plaintiff paid to the first defendant the first instalment (IDR 2,445,553). The first and second defendants then sought to recoup the arrears they claimed were owing pursuant to the agreement by sending someone to the first plaintiff's home, as well as by contacting the first plaintiff by telephone, and sending him two written reminders. Then, on 22 October 2013, the second defendant, with a work colleague, attended the first plaintiff's home, directing at the first plaintiff angry and threatening language.

The first and third plaintiffs sought IDR 1.761 billion in damages. In addition, they requested that the court find the agreement transferring the Walidi property to the first plaintiff fraudulent and invalid, and that the defendants pay costs.

The court found that the plaintiffs' statement of claim contained two irregularities:

1. it referred to all three plaintiffs as the plaintiff, failing to separate them as first, second and third plaintiffs; and
2. it incorrectly included the third defendant as a party, despite the parties to the agreement being Jaka Mulia Damanik (first plaintiff) and the first and second defendants.

The court also found that it was precluded on jurisdictional grounds from adjudicating the case, and that the appropriate forum was in fact the Tebing Tinggi Religious Court. Accordingly, it dismissed the case and ordered the plaintiffs to pay costs.

This Country Profile provides a basic overview of the legal history and institutional structures of the Swiss Confederation (Schweizerische Eidgenossenschaft (German); Confederation Suisse (French); Confederazione Svizzera (Italian); Confederaziun Svizra (Romansh)), based on research produced by GlobaLex at NYU Law School and the Library of Congress. Under Switzerland's Constitution, Islamic law (sharīʿa or fiqh) has no legal status.

This Country Profile provides a basic overview of the legal history and institutional structures of the People's Republic of China (Zhonghua Renmin Gongheguo), based on research produced by GlobaLex at NYU Law School and the Library of Congress. Under China's Constitution, Islamic law (sharīʿa or fiqh) has no legal status. 

This Country Profile provides a basic overview of the legal history and institutional structures of the Republic of India (Republic of India/Bharatiya Ganarajya), based on research produced by GlobaLex at NYU Law School and the Library of Congress. Under India's Constitution, Islamic law (sharīʿa or fiqh) has no legal status. 

This Country Profile provides a basic overview of the legal history and institutional structures of the Democratic Socialist Republic of Sri Lanka (Shri Lanka Prajatantrika Samajavadi Janarajaya/Ilankai Jananayaka Choshalichak Kutiyarachu), based on research produced by GlobaLex at NYU Law School and the Library of Congress. Under Sri Lanka's Constitution, Islamic law (sharīʿa or fiqh) has some legal status. 

This Country Profile provides a basic overview of the legal history and institutional structures of the Lebanon Republic (Al Jumhuriyah al Lubnaniyah), based on research produced by GlobaLex at NYU Law School and the Library of Congress. Under Lebanon's Constitution, Islamic law (sharīʿa or fiqh) has no legal status. 

This Country Profile provides a basic overview of the legal history and institutional structures of the Kingdom of Saudi Arabia (Al Mamlakah al Arabiyah as Sa'udiyah), based on research produced by GlobaLex at NYU Law School and the Library of Congress. Under Saudi Arabia's Constitution, Islamic law (sharīʿa or fiqh) is the primary source of legislation.  

This Country Profile provides a basic overview of the legal history and institutional structures of the State of Qatar (Dawlat Qatar), based on research produced by GlobaLex at NYU Law School and the Library of Congress. Under Qatar's Constitution, Islamic law (sharīʿa or fiqh) is a primary source of legislation. 

This Country Profile provides a basic overview of the legal history and institutional structures of the Kingdom of Bahrain (Mamlakat al Bahrayn), based on research produced by GlobaLex at NYU Law School and the Library of Congress. Under Bahrain’s Constitution, Islamic law (sharīʿa or fiqh) has legal status, and is the principal source of legislation.

The plaintiff’s legal counsel asserted that, on 24 August 2011, the plaintiff (deceased) and defendant (Bank BRI Syari’ah Cabang Surabaya) entered into a financing agreement (Al Qardh) to enable the plaintiff to purchase precious metals. Articles 1 and 2 of the agreement stated that the defendant would lend to the plaintiff IDR 95.4 million to be used to purchase 200 grams of gold from the precious metals company Antam. The gold was valued at IDR 106 million, and required a down payment of IDR 10.6 million. Pursuant to art 3 of the agreement, the plaintiff was required to repay the defendant in instalments of IDR 1,590,000, over a period of 60 months (until 24 August 2016). Upon repayment of two instalments, the plaintiff was then entitled to a cash back incentive, notably after repaying the first three instalments, as well as the twelfth instalment. Article 5(1) of the agreement also specified that to guarantee the return of the monies loaned, the plaintiff was to use the 200 grams of gold as collateral. To ensure the gold was cared for and stored for the period of the loan, the plaintiff paid to the defendant a monthly fee of IDR 1,033,500, making his total monthly repayments IDR 2,623,500.

The plaintiff successfully made these repayments for 29 months (until January 2014), while the defendant upheld its end of the bargain by paying to the plaintiff the cash back incentives up until November 2013, after which it defaulted. The plaintiff alleged that the defendant had failed to act in good faith, providing a variety of reasons to postpone the payment of the cash back incentives. The plaintiff paid to the defendant the remainder of his debt owing (IDR 49,290,000 as of 7 February 2014), hoping that the defendant would then repay to the plaintiff all its cash back incentives. The defendant, however, continued to provide the plaintiff with reasons as to why it could not uphold its end of the bargain. Finally, on 23 May 2014, the defendant paid to the plaintiff the cash back for January 2014 (IDR 912,925) and March 2014 (IDR 981,825) totalling IDR 1,894,750.  The plaintiff told the court he had instigated proceedings to recoup the unpaid cash back incentives totalling IDR 21,893,175. The plaintiff also objected to the defendant unlawfully debiting the plaintiff’s bank account for IDR 3,100,500 when the principal debt had been repaid. The defendant claimed that this debit was to cover the plaintiff’s ijarah (fee) for February 2014, in addition to a fine equal to two months’ ijarah, resulting from the plaintiff repaying the entire principal. The plaintiff, however, claimed that the debit was clearly unlawful and in contravention of arts 2(3) and 4(1)(c) of the ijarah agreement, which stated that the ijarah period concluded when the gold/items being stored and cared for by the defendant no longer constituted a surety and had been returned to the plaintiff. The plaintiff sought actual damages to the value of IDR 52,044,637, as well as compensatory damages to the value of IDR 1 billion for pain and suffering. For every day the defendant failed to pay after the seven day deadline he sought the court to enforce, the plaintiff requested that the defendant pay a one per cent fine. Moreover, if the defendant was unable to pay the damages sought by the plaintiff, the plaintiff recommended that the court order it to sell a property it owned and pay the damages from the proceeds of the sale. The plaintiff also recommended the court hand down judgment, the implementation of which could not be delayed if the defendant sought to appeal the decision.

The defendant lodged an exception to the plaintiff’s case, stating that the court was not authorised to adjudicate the case. The defendant argued that art 55 of Law No. 21 of 2008 on Shari’a Banking permits parties to specify in an agreement their preferred mode of dispute resolution, which does not have to be a religious court, that being a state court or arbitration body. It argued that the parties’ express desire, as stated in art 12 of the agreement, was to resolve any disputes relating to the agreement before the National Shari’a Arbitration Board (Badan Arbitrase Syariah Nasional – Basyarnas), if initial discussions and deliberation (musyawarah) were unsuccessful. Moreover, that any decision made by Basyarnas was first and final. The defendant also cited art 59 of Law No. 48 of 2009 on Judicial Authority, which acknowledges arbitration as a final and binding form of civil dispute resolution, based on a written agreement by the parties to the dispute. In the event one of the parties to a dispute does not abide by the ruling of the arbiter, art 59(3) enables the other party to lodge an application with the Chief Justice of the state court (Pengadilan Negeri) to compel the non-abiding party to do so. The defendant also noted that the elucidation of art 59(1) defines 'arbitration' as including shari’a arbitration.

In regards to the plaintiff’s principal claim, the defendant retorted that the plaintiff’s calculations in regards to the cash back payments were excessive. It also argued that the monthly instalments owed by the plaintiff were IDR 2,623,500 (this figure comprised IDR 1,590,000 based on the Al-Qard agreement, and IDR 1,033,500 per the ijarah agreement). The defendant asserted that the cash back arrangement derived from the Al-Qard agreement, because it would otherwise have been a violation of the current law and the agreement itself, meaning that it must be calculated based on the ijarah agreement, on the condition the plaintiff paid all repayments for the entire 60 months, without defaulting. For the plaintiff to repay the entire contract price, and then to expect to receive all cash back payments at once, was not what the parties had agreed to in the ijarah agreement. The defendant acknowledged that the plaintiff had overpaid the defendant by IDR 2,067,100 when paying out the contract price, and was happy to return the excess monies. In regards to the actual damages sought by the plaintiff, the defendant struggled to understand the plaintiff’s reasoning and calculations. More fascinating, however, was its summation of the IDR 1 billion sought in compensatory damages, which it described as a "fantastic number that fell from the sky" (nilai yang fantastis yang jatuh dari langit) that had no basis.

The court acknowledged that the parties had, in art 12 of the agreement, agreed to resolve any disputes via arbitration. It cited Surat Al-Maidah, verse 1, which encourages Muslims to uphold the agreements they make, as well as art 1338 of the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata), which requires parties to an agreement to treat that agreement as law, and art 4(1) and (2) of Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution, which permits parties to agree to arbitration as their preferred mode of dispute resolution. In regards to the Constitutional Court’s (No. 93/PUU-X/2012) decision regarding the elucidation of art 55(2) of Law No. 21 of 2008, and vesting in the religious judiciary absolute jurisdiction over shari’a banking cases, the court said it needed to consider the opinion of Prof Dr Laica Marzuki, former Supreme Court and Constitutional Court Justice, that Constitutional Court judgments have no retroactive application, but are prospectively binding. As the parties had reached their agreement on 21 August 2011, the court found that the Constitutional Court’s judgment was inapplicable and, therefore, the parties were bound by the contents of the agreement.

This Country Profile provides a basic overview of the legal history and institutional structures of the Federal Republic of Germany (Bundesrepublik Deutschland), based on research produced by GlobaLex at NYU Law School and the Library of Congress. Under Germany's Constitution, Islamic law (sharīʿa or fiqh) has no legal status.