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The factual matrix may have to be set out and proved in a case involving the interpretation of an ambiguous contract. We have previously written about the method of interpreting a contract in our posts Golden rule of interpretation – Good riddance and Interpret contracts according to words, purpose and context. The Supreme Court of Appeal in Firstrand Bank v Clear Creek Trading held that it could not give judgment on the interpretation of…
Islamic finance has an array of structures to deal with various commercial needs, but adhering to Islamic law (Shariah) principles. One commonly used structure is Musharakah. What is Musharakah? Musharakah is similar to a joint venture. It allows equity participation by the parties, who finance a project in agreed proportions in either cash or kind. They each agree to accept a percentage of the returns and risk, sharing the profit and loss of a project in…
The South African government issued its debut $500 million sukuk in 2014. The sukuk was four times oversubscribed, highlighting the appetite for this product. There have been a number of sovereign backed sukuks of this nature across the Muslim world and elsewhere, such as the UK, where the government issued its first sukuk in 2014. Corporates have been slow to take up sukuk. Banks have, however, issued balance sheet specific sukuk as a liquidity management…
Islamic finance transactions are based on Shariah (Islamic law). For an Islamic finance structure to be Shariah compliant it cannot contain elements of riba (interest), gharar (uncertainty), maisir (gambling) or investment in prohibited industries such as alcohol, pork products, conventional finance and pornography. Interest Shariah deems money to have no intrinsic value – it is only a measure of value. Since money has no value itself, there should be no charge for its use. The…