Description

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Risk-sharing investment is currently the buzz word in Islamic finance. However, there is an incongruence in applying multilayered and opaque Tijarah contracts for investment purposes. This has contributed to the divergence between Shariah and Common Law and caused tremendous problems and systemic legal risks to Islamic finance.

The authors of Shariah Investment Agreement introduce a legal tool in the form of a Shariah Investment Agreement carefully drafted to ensure that it is Shariah-compliant and can be applied in Common Law jurisdictions as well, so as to allow for the execution of risk-sharing investment in Islamic finance. It details the building blocks and key considerations that must be noted when drafting such agreements so the investor and investee will know what to expect when entering into such a contract.

Proper implementation of the Shariah Investment Agreement will pave a clear route to a harmonious convergence between Shariah and Common Law and lead to Islamic finance developing further to become a stronger, unstoppable force in the finance industry.

About the Author

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Dr. Syed Adam Alhabshi is a partner at Shook Lin & Bok. He holds a Ph.D in Islamic Finance from the International Centre for Islamic Finance Education (INCEIF) (2016). He also holds a Chartered Islamic Finance Professional (CIFP) from INCEIF (2010), and read law at the International Islamic University of Malaysia (IIUM) (2006). Abbas Mirakhor joined INCEIF in 2010 as Distinguished Scholar and the First Holder of INCEIF's Chair in Islamic Finance. His research interests include conventional and Islamic economics and finance. He is a graduate of the Kansas State University, USA, where he received his Bachelor, Master and PhD Degrees in Economics. In 1968, he started his academic career with University of Alabama, USA. Mirakhor has worked as a professor of economics at the University of Alabama, Alabama A&M University, and the Florida Institute of Technology. In 1984, he joined the IMF in Washington DC as an economist. He spent 24 years with the IMF, serving as the organisation's Executive Director and Dean of the Executive Board, retiring in 2008. YAA Prof. Adjung Dato' Setia Dr. Haji Mohd Na'im bin Haji Mokhtar is currently the Director General / Chief Judge, Department of Syariah Judiciary Malaysia. Professor Datuk Dr Syed Othman Alhabshi is the Deputy President Academic of the International Centre for Education in Islamic Finance (INCEIF). He joined INCEIF as a Professor of Islamic Economics & Econometrics and head of Takaful Faculty in March 2007. Since 1969, he has served in various academic capacities in four public universities in the country, namely University of Malaya, Universiti Kebangsaan Malaysia, International Islamic University Malaysia, and Universiti Utara Malaysia. He was a member of Etiqa Takaful Berhad Board (1995-2013), Maybank Islamic Board (2006-2014), Asia Unit Trust Board (1994-2012), among others.