Papers by Abdullah Rahman
This is a commentary on the Malaysian Court of Appeal decision in Low Chin Meng v CIMB Islamic Ba... more This is a commentary on the Malaysian Court of Appeal decision in Low Chin Meng v CIMB Islamic Bank Berhad [2015] 5 CLJ 324. In this case, a guarantor challenged legality of the Bai’ Bithaman Ajil (BBA) financing facility between a company and the bank on several grounds, two of which are discussed in the article. Firstly, that the transactions forming the financing infringed the principles of BBA and therefore invalid for non compliance with the Shariah. Secondly, that the transactions infringed section 67(1) of the Companies Act 1965 which prohibits a company, in any way, from purchasing or dealing in its shares.
As against the company, judgment had been entered and was not challenged further. As against the guarantor, the court decided that as long as the judgment against the company stood, the guarantor had no right to challenge the validity of the BBA based financing agreement involving the company and he remained liable to the bank as the guarantor.
Although the legality points raised by the guarantor do not appear to form the basis of the court's decision, these were discussed at length in the judgment. This article deals with the discussions on the legality points.
The article was first published in the Islamic Finance News magazine on 4 Nov 2015.
Garnishee proceedings, now known in England as third party debt order proceedings, against a ban... more Garnishee proceedings, now known in England as third party debt order proceedings, against a banking account of the judgment debtor is a popular method of enforcement of judgments. While this is true for conventional banking accounts, it is not always so for Islamic banking accounts. This paper discusses the reason some Islamic banking accounts cannot be subjected to garnishee proceedings.
The paper studies the enforceability of Shariah as the governing law of Islamic finance contract... more The paper studies the enforceability of Shariah as the governing law of Islamic finance contracts in litigation and arbitration in the United Kingdom and whether the decision of the English Court of Appeal in Beximco v Shamil Bank on the issue is still relevant. The paper concludes that in arbitration the Shariah has always been enforceable as the governing law of a contract in England . In litigation, previously the Shariah was not applicable as the governing law of a contract and this was confirmed in Beximco. However, the decision in Beximco is no longer relevant with the coming into force of Rome I Regulation. Thus, today, Shariah may also be enforceable as the governing law of a contract where the contract provides for Shariah as its governing law.
The Shariah Parameters requires the creation of Islamic ETF units based on gold and silver to be ... more The Shariah Parameters requires the creation of Islamic ETF units based on gold and silver to be backed by physical gold and silver bullions or bars with specifi ed quantity and quality. Thus, the units in an Islamic ETF, in total, represent the physical gold and silver bullions or bars held by the custodian on behalf of the Islamic ETF. Consequently, each Islamic ETF unit represents the unit holders' ownership of the gold and silver bullions or bars on a pro rata basis. In this regard, the Shariah Parameters require the fund manager and the Shariah adviser of the Islamic ETF to verify that the gold and silver bullions or bars, with the correct quantity and quality as per the specifi cation, are in existence and are allocated and segregated according to the Islamic ETF units.
Hibah the issue of its validity as a contract due to lack of consideration
A discussion on the decision of the Malaysian Federal Court decision in CIMB Bank Bhd v Maybank T... more A discussion on the decision of the Malaysian Federal Court decision in CIMB Bank Bhd v Maybank Trustees Bhd and other appeals concerning the claim for pre judgment interest in an Islamic finance transaction
The asset based vs asset backed sukuk has been vigorously discussed by Islamic scholars, academic... more The asset based vs asset backed sukuk has been vigorously discussed by Islamic scholars, academics and practitioners in the Islamic finance industry. It has been claimed that this issue was a crucial factor leading to sukuk defaults due to the inability of asset based sukuk holders to have recourse to the underlying assets. This study attempts to analyze whether this issue is a pivotal factor in sukuk default cases. The study suggests that this issue, namely whether asset based or asset backed sukuk is not a pivotal factor leading to sukuk default as other factors such as creditworthiness of the originator, mismatching of short term and long term portfolios, regulatory regime and adverse impact of the global credit crisis would have significantly affected the defaults. However, this issue is important in the recovery exercise upon default.
A monetary policy called Quantitative Easing (QE) was adopted by the Bank of Japan in March 2001,... more A monetary policy called Quantitative Easing (QE) was adopted by the Bank of Japan in March 2001, by the U.S. Federal Reserve in December 2008 and the Bank of England in March 2009 to increase liquidity in their respective financial markets in the face of economic slowdowns. This paper examines the nature of QE, how it works and its impact in the various superpowers. This paper found that QE is a tool that central bankers are relatively unfamiliar with and therefore should only be employed with extreme caution. This paper concludes that the QE is a temporary measure which may stabilise price and increase liquidity. However, QE does not resolve structural problems in a financial market which should not be ignored for the financial market to stand on its own again so as not to attract the problem of over supply of money.
Drafts by Abdullah Rahman
A director of a company has the duty under the law to act with reasonable care, skill and diligen... more A director of a company has the duty under the law to act with reasonable care, skill and diligence. The Business Judgment Rule provides for the requirements a director will be deemed to have fulfilled this duty.
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Papers by Abdullah Rahman
As against the company, judgment had been entered and was not challenged further. As against the guarantor, the court decided that as long as the judgment against the company stood, the guarantor had no right to challenge the validity of the BBA based financing agreement involving the company and he remained liable to the bank as the guarantor.
Although the legality points raised by the guarantor do not appear to form the basis of the court's decision, these were discussed at length in the judgment. This article deals with the discussions on the legality points.
The article was first published in the Islamic Finance News magazine on 4 Nov 2015.
Drafts by Abdullah Rahman