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I. INTRODUCTION
The application of the SharÊÑah principle of ijÉrah mawÎËfah fi al-dhimmah (forward lease) can be traced back to the early days of Islam. It is derived from the original contract of ijÉrah (lease), which has been widely used in the structuring of Islamic financial transactions to cater for various Muslim and non-Muslim needs over time. Thus, the classical books of Islamic jurisprudence have amply discussed its applications in various forms according to the prevailing circumstances.
Today, ijÉrah mawÎËfah fÊ al-dhimmah is applied in the offering of various services in the Islamic finance industry relating to education, medical treatment, tourism, Íajj and Ñumrah, among others. Nevertheless, its applications involve a number of SharÊÑah issues concerning the advance rental payment, the subject matter of the contract and its fiqh characterization. The primary purpose of this paper is accordingly to examine the key SharÊÑah issues arising in the current applications of ijÉrah mawÎËfah fÊ al-dhimmah in the Islamic finance industry and to determine their juristic stance. Since ijÉrah mawÎËfah fÊ al-dhimmah shares the characteristics of both ijÉrah and salam (forward sale), this paper also aims to examine the most relevant contract applicable in ijÉrah mawÎËfah fÊ al-dhimmah.
The research questions to be addressed in this paper are thus as follows:
i. What are the features and applications of ijÉrah mawÎËfah fÊ al-dhimmah in the Islamic finance industry?
ii. What are the key SharÊÑah issues relating to the applications of ijÉrah mawÎËfah fÊ al-dhimmah in the Islamic finance industry?
iii. Do fiqh juristic texts provide any decisive decision on the fiqh characterization of ijÉrah mawÎËfah fÊ al-dhimmah?
II. LITERATURE REVIEW
A number of literary works - including both classical jurisprudence and discussions of contemporary practices - have been examined relating to the abovementioned research questions. Two main topics have been examined in the literature: first, the definition of ijÉrah, its types and contemporary applications; second, the definition of ijÉrah mawÎËfah fÊ al-dhimmah, its current applications and SharÊÑah issues.
A. Definition of IjÉrah
The classical jurisprudence books provide the detailed conceptual framework of ijÉrah upon which the principle of ijÉrah mawÎËfah fÊ al-dhimmah is based. In fact, the concept of ijÉrah mawÎËfah fÊ al- dhimmah can be easily understood from the...