Sukūk Al-Ijārah: The Call for a New Framework

Abstract

Sharīʽah legitimacy of sukūk has been a subject of intense debate and discussion among the religious scholars. Their key objection on sukūk al-ijārah is that the real ownership is missing and it heavily relies on hiyal i.e., stratagems to legalize ribā, which frustrate the higher objectives of the Sharīʽah. The objective of this research is to improve the structure of sukūk-al- ijārah and to endow with an alternative for it, which will be beneficial for public at large. The major research questions involve investigating real or beneficial ownership, ribā, bayʽ al- wafa, bay al- istighlal and bayʽ al īnah, etc., in sukūk. Qualitative, descriptive and analytical legal research methods have been employed. The main conclusion drawn from the study indicates that there are several elements which are rendering sukūk un-Islamic and are stratagem to legalize ribā. It is suggested that the removal of these un-Islamic elements can render sukūk truly Islamic.