Where a Muwakkil invests money with the Wakil under a Wakala, this money is usually mixed with its own Wakil fund pool. In the event that Wakil becomes insolvent, Muwakkil`s money is mixed with other wakil money and can perfectly be processed by the liquidator in a Uae law that is part of Wakil`s liquidation assets. The issue of guaranteeing a minimum return on Muwakkil`s investment raises further questions about Wakil`s ability to provide such guarantees and whether Wakil can waive its obligations under the wakala agreement due to a lack of capacity. This point was highlighted in the recent case of Kuwait-based Investment Dar (TID) and BLOM Development Bank SAL of Lebanon (Blom Bank). Blom Bank sued TID in london`s High Court of Justice last year to recover US$10.7 million it invested in TID in 2007, as well as a promised 5% return over Wakala. TID refused to pay and argued that the agreement was not in accordance with Shari`a, since the 5% return can be considered an “interest”, which is prohibited by Islam, and that the TID charter prohibited non-Islamic transactions. TID argued that it was acting in an ultra vires manner. The case was never tried and was not followed up, which raised the issue of capacity risk in Islamic transactions. It should be noted that the Court did not rule on the merits of TID`s defence, that the agreement was not in accordance with Sharia law, but only that such a defence could theoretically be invoked. After his appointment, the agent assumes certain documented functions in Wakala as an agent on behalf of the principal. It also involves investing money he receives from the client in the company for which the representative has been appointed. Here are some rules and features that apply to Wakala: this agreement applies to a known transaction.
Example: the agent is required to sell or buy a house or private car. The high court in Investment Dar Co KSCC/Blom Developments Bank Sal (2009) decision raised a number of interesting questions. However, it should not be considered a violation of the integrity of the Wakala agreements. As part of a Wakala agreement, Muwakkil and Wakil share both the profit and the risk of loss. The expected benefits, which are indicated in a Wakala agreement, are only indicative and are not a guarantee of return. If Wakil makes a profit up to the due date, the winnings are shared with the Muwakkil in pre-agreed proportions. Conversely, if a loss is made, this loss is borne by the muwakkil in the absence of gross negligence, fraud or deliberate delay by the wakil. Appointment of agent – The appointment of a representative by the client represents offer and acceptance. The role of the representative should be clearly defined in the Wakala and can be specific (for example. B the agent is to sell a specific asset at a certain price or according to certain instructions of the client), or in general (for example.
B, a client may appoint a representative who buys certain types of goods if requested). First, it is important to recognize what is not the decision. The judgment does not specify that the Wakala agreement in question is legally invalidated or is in no way in accordance with the shari`a agreements or that the wakala agreements are in general.