Transmenu powered by JoomlArt.com - Mambo Joomla Professional Templates Club

Owing to recent local and international developments, Islamic banking and finance in Malaysia is now at crossroads, with its future
direction being mulled over by all stakeholders.
Since its introduction in 1983, the mainstay of Islamic banking and finance in Malaysia has been the Shari’ah contract of Bai’
Bithaman Ajil (BBA) which, though frowned upon by Pakistani and Middle Eastern ulama, has been endorsed by Malaysian
scholars and up to 2006 accepted by our courts. Not even the seminal judgment of the Supreme Court of Pakistan on 23-12-1999
which held BBA to be a questionable transaction bordering on riba’ and susceptible to misuse, deter Malaysian bankers from using
this product.

The industry, however, was taken aback when Justice Datuk Abdul Wahab Patail ruled in Affin Bank v Zulkifli Abdullah [2006] 3
MLJ 67 that in the event recovery proceedings are commenced prior to the expiry of the financing tenure, the bank is entitled to
only profit up to the date of recovery and not the entire balance of the sale price. There was further shock to the industry, in
particular the Islamic banking lawyers and scholars, when Justice Datuk Abdul Wahab Patail held on 18-7-2008 in Arab-Malaysian
Finance Berhad v Taman Ihsan Jaya Sdn Bhd & 2 Ors [2008] 5 MLJ 631 and 11 other cases that the current rendering of the
BBA contract to be void under Islamic law and as such, the banks could recover only the principal and no profit under Section 66
of the Contracts Act 1950. In another decision given on the same day, Justice Wahab Patail came to the same conclusion about
Istisna’ contracts (Tahan Steel Corporation Sdn Bhd v Bank Islam Malaysia Berhad [2004] 6 MLJ 1). In an initial reaction to the
latter cases, Bank Negara Malaysia issued a circular calling on all banks to tighten internal controls and to look at alternatives to
BBA.

On 31-3-2009, the Court of Appeal overruled the High Court’s decision in, among others, Tahan Steel Corporation.
Early this year, Muhammad Taqi Usmani, a leading contemporary Islamic scholar, made the startling finding that a staggering 85 %
of sukuks (Islamic bonds) issued in the Middle East were not Shariah-compliant.
Hence it is no surprise that lawyers everywhere are seeking immediate and effective solutions to the tough challenges posed by
these developments. This National Symposium is, thus timely and is designed with the concerns of law practitioners in mind and
intends to achieve the following objectives:

1.outline the regulator's latest updates on the vision and direction of the industry and its expectations from industry players,
particularly lawyers;
2. provide eminent Islamic scholars' critical views on the Shariah issues now confronting the industry;
3. critically analyse the said High Court and Court of Appeal judgments;
4. supply experienced Islamic banking lawyers' input on BBA and alternative transactions;
5. proffer expert advice on Musharakah Mutanaqisah, a viable alternative to BBA; and
6. present an avenue for practitioners to highlight concerns and discuss means to overcome problems faced in Islamic banking
practice.

Members are encouraged to register for the Symposium to enhance your knowledge of and to apprise yourselves of the latest
updates on the topic.