Islamic Bank

Since no definition, conditions or provisions of Murabaha Agreement is included in the applicable laws,  Murabaha Sale Agreement, as defined by the Maliki’s scholars, is the sale of an article by its original purchase price in addition to a known commission to the total price and insurance, provided that the sold article is owned by the seller to be able to dispose of it. The first purchase price must be indicated if the seller has previously purchased the  article and wants to sell the same. If the article is already owned by the seller, the real price of the article must be assessed and indicated upon the sale. In addition to the price of the article, the expenses incurred must be added to the extent such expenses have affected the description of the article. The price may also be in a total mount inclusive of the original price and the added commission without separation. In order for the Murabaha Sale Agreement to be valid, the sold article and price shall not be combined and since Islamic banks do not have any objects that may be sold, it first provides a promise to buy the article for the requesting customer, and after purchasing the Article, the bank concludes Murabaha Sale Agreement with the customer if the aforementioned conditions are met.

Cassation Case No. 120 of 2005 (Commercial Appeal), Dubai Courts, session held on 05.06.2005.