Purbalingga Religious Court Determination No. 868 of 2016: Shari'a Economy Application Withdrawn After Defendants Pay Monies Owed

The parties entered into a musyarakah financing agreement on 22 January 2013, pursuant to which the plaintiff provided IDR 150 million and the defendants IDR 112.5 million. The total capital was earmarked for a rice milling enterprise operated by the defendants in Purbalingga regency. The plaintiff submitted that, pursuant to the agreement, the parties had agreed that 32 per cent of income/profits would be allotted to the plaintiff, while 68 per cent of income/profits would be allotted to the defendants. Moreover, that the capital would be returned in instalments of IDR 2.5 million, along with a projected profit of IDR 1,499,429, on the 22nd of every month for the next 60 months (from 22 January 2013 to 22 January 2018). Failure to make a monthly repayment would incur a late fee, pursuant to the plaintiff's (bank) regulations and art 9(5) of the agreement.

When the defendants defaulted on the agreement the plaintiff sent them three separate reminder notices on 6 November 2014, 4 December 2014, and 9 March 2015, as well as four summons notices on 6 January 2015, 4 September 2015, 6 October 2015, and 19 October 2015. After receiving no acknowledgement of receipt, the plaintiff served the defendants with a subpoena on 12 November 2015 and 1 February 2016. The plaintiff submitted that it provided the defendants with yet another opportunity to pay monies owing but that they refused. Furthermore, when the plaintiff inquired into the management of the defendants' enterprise, it learned that the defendants had never shared the parties' joint profits (syirkah), pursuant to art 8(1) of the agreement, and the defendants had never returned monies to the plaintiff, pursuant to the schedule in art 8(1). In total, the plaintiff requested that the court order the defendants to pay IDR 128,901,174 to the plaintiff.

The defendants failed to attend the first hearing. At a subsequent hearing on 11 August 2016, however, the plaintiff requested that the court allow it to withdraw its application on the grounds that the defendants had paid to the plaintiff the sum requested. The court acceded to the plaintiff's request and ordered the plaintiff pay costs (IDR 821,000).

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