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The appellant sought to challenge Kebumen Religious Court Decision No. 2623 of 2013. The court, however, concurred with the lower court, finding that the plaintiff did not have legal standing as he was not a party to the agreement.

The plaintiffs submitted that, in April 2013, the second defendant (employee of PT. Bank SUMUT (first defendant)), via the third defendant, had told Muhammad Erwin (third plaintiff) that he would be released from his financial obligations under his current home loan if he could find a new purchaser for a separate property in the name of Walidi (Walidi property). The third plaintiff alleged that the third defendant had obtained this information from the second defendant because the second defendant and the first defendant's audit team had encountered an irregularity vis-a-vis the Walidi property.

Based on the second defendant's request (via the third defendant), the plaintiff instructed the third defendant to undertake to find a new purchaser for the Walidi property. The third plaintiff and third defendant visited the first plaintiff (Jaka Mulia Damanik) at his home, and asked if the first plaintiff would like to become the new purchaser of the Walidi property. The first plaintiff agreed to do so on the condition that the third plaintiff would loan him IDR 20 million for a separate project. The third plaintiff agreed to do so once the first defendant had released him from his financial obligations pursuant to his own home loan.

On 29 April 2013, at the office of the second defendant, prior to the first plaintiff signing the agreement to purchase the Walidi property, the third defendant encountered the third plaintiff. The third plaintiff was at the second defendant's office to loan to the first plaintiff the IDR 20 million. The third defendant believed this loan money was the down-payment for the purchase of the Walidi property, and, accordingly, told the third plaintiff that the money would be returned that day after the first plaintiff had signed his purchase agreement for the Walidi property. After receiving the money, the third defendant departed quickly, failing to provide the third plaintiff with a receipt for the money. The third plaintiff assumed that the third defendant worked for the first defendant, and that the money would be returned that day upon execution of the Walidi property agreement.

The third defendant allegedly told the third plaintiff that the IDR 20 million, requested by the third defendant for, and on behalf of, the first plaintiff, was a down-payment on the Walidi property agreement. The third defendant also instructed the third plaintiff that it be returned immediately, and that there would be a new purchaser for the Walidi property within the next two months.

On 29 April 2013, after the first plaintiff signed the agreement, transferring ownership of the property from Walidi to the first plaintiff, the first plaintiff was asked by the third defendant to sign a blank withdrawal form. The first defendant, however, did not receive a carbon copy of the withdrawal form. The third plaintiff also sought to recoup his IDR 20 million from the third defendant, but was told by the third defendant to wait two months until there was a new purchaser for the Walidi property. The IDR 20 million had still not been returned by the time the plaintiffs filed their application with the court.

Also on 29 April 2013, the plaintiffs submitted that the first defendant debited the first plaintiff IDR 256 million, without his prior knowledge. The first defendant also credited the first plaintiff with IDR 50 million for overbooking, the defendants claiming that the IDR 50 million designated to pay for objects required by the developer had to originate from the first plaintiff's personal account. The first plaintiff claimed this to be fraudulent on the part of the first defendant.

Ten days after the agreement had been executed, the first plaintiff sought to enforce his agreement with the third plaintiff for IDR 20 million. On Friday 10 May 2013, the third plaintiff transferred IDR 20 million to the first plaintiff's bank account.

On 31 May 2013, the first plaintiff paid to the first defendant the first instalment (IDR 2,445,553). The first and second defendants then sought to recoup the arrears they claimed were owing pursuant to the agreement by sending someone to the first plaintiff's home, as well as by contacting the first plaintiff by telephone, and sending him two written reminders. Then, on 22 October 2013, the second defendant, with a work colleague, attended the first plaintiff's home, directing at the first plaintiff angry and threatening language.

The first and third plaintiffs sought IDR 1.761 billion in damages. In addition, they requested that the court find the agreement transferring the Walidi property to the first plaintiff fraudulent and invalid, and that the defendants pay costs.

The court found that the plaintiffs' statement of claim contained two irregularities:

1. it referred to all three plaintiffs as the plaintiff, failing to separate them as first, second and third plaintiffs; and
2. it incorrectly included the third defendant as a party, despite the parties to the agreement being Jaka Mulia Damanik (first plaintiff) and the first and second defendants.

The court also found that it was precluded on jurisdictional grounds from adjudicating the case, and that the appropriate forum was in fact the Tebing Tinggi Religious Court. Accordingly, it dismissed the case and ordered the plaintiffs to pay costs.

At the beginning of August 2012, the plaintiff had acceded to the first defendant's request to use the plaintiff's land to secure additional capital for his car dealership. The first defendant undertook with the plaintiff to repay the additional loan he had obtained from the second defendant, leveraging the plaintiff's land as security, and to immediately return to the plaintiff the title to the plaintiff's property. On 31 August 2012, the first and second defendants executed a mudharabah agreement, pursuant to which the first defendant borrowed IDR 120 million. The plaintiff acted as witness. When the first defendant defaulted on the loan repayments, the second defendant directed the co-defendant to auction the plaintiff's land, without any deliberation. The plaintiff claimed he had not received any form of remuneration and had had to bear the loss on his own. The plaintiff requested that the court find the first and second defendants in default, and the auctioning of the plaintiff's land to be unlawful.

The court, however, acceded to the objection of the second defendant and co-defendant, finding that it was not authorised to adjudicate the case as the parties had agreed on another forum to resolve disputes. It also concurred with the defendants that the plaintiff's power of attorney vis-a-vis his legal representation was null and void due to formulaic irregularities.

This fatwa permits financial loans obtained via a mortgage, and outlines the obligations on the mortgagor and mortgagee until the loan is repaid.

This fatwa provides a set of guidelines for executing a mudharabah financing agreement. A mudharabah financing agreement entails one party (the financier) acting as the financial backer, and the other (the customer) as the manager of the venture. The two parties then share in the profits resulting from the venture, pursuant to the terms agreed upon in the contract.

The fatwa provides that the financier may not manage the venture or project, but has the right to foster and monitor the project. It also sets out contractual requirements to which all mudharabah agreements must adhere, including a statement of intent, what may constitute financial capital, as well as profit and how profit is to be shared by the parties. Damages are generally not available pursuant to a mudharabah agreement, unless loss has been incurred as a result of deliberate misconduct, negligence or a contravention on the part of one of the parties to the agreement.

This fatwa acknowledges a need to protect the value of foreign currency given the uncertainty of the exchange rate (Islamic hedging), and that, to date, shari'a-friendly provisions and instruments to deal with this trend are lacking.

The fatwa states that Islamic hedging is applicable to the following agreements:

1. 'Aqd al-Tahawwuth al-Basith (simple value-protecting transaction), whereby parties agree to a certain amount of foreign currency to be sold and purchased, at a certain exchange rate, at a certain time, either as a once-off or on multiple occasions;
2. 'Aqd al-Tahawwuth al-Murakkab (complex value-protecting transaction), whereby parties agree to a certain amount of foreign currency to be sold and purchased, at a certain exchange rate, at a certain time, as a once-off; and
3. 'Aqd al-Tahawwuth fi Suq al-Sil'ah (shari'a commodity exchange value-protecting transaction), whereby a shari'a commodity exchange facilitates an Islamic hedging trader to conduct a commodities transaction at the shari'a commodity exchange.

Islamic hedging may only be conducted if there exists an apparent need to minimise an unavoidable risk associated with the exchange rate. It may not be performed for speculative purposes. The fatwa also maintains that an exchange rate must be agreed upon by both parties at the time they reach an agreement.

This fatwa was drafted in response to an Indonesian government request for an explanation on flexibility in the publication and management of a government-sanctioned State Shari'a Security on Agency. It defines a State Shari'a Security on Agency (Surat Berharga Syariah Negara Wakalah) as a state shari'a security published in accordance with shari'a principles, as evidence of partial ownership of assets in an investment activity managed by a publishing company as an agent of the holder of the state shari'a security. The fatwa permits the government to publish a state shari'a security directly or via a publishing company. If a publishing company is elected, it must declare that it is acting as a representative of the holder of the state shari'a security, for the purposes of managing profits resulting from the publication of a state shari'a security. Publishing companies must also publish agency state shari'a securities and can guarantee investors.

This fatwa acknowledges a lack of means available to assist shari'a financial institutions (Lembaga Keuangan Syariah) that encounter liquidity problems because of gaps in time between funds accumulated in the short term, and funds distributed in the medium-long term.

The fatwa defines a shari'a security repurchase agreement (Repo SBS) as the sale of a shari'a security by a shari'a financial institution to another shari'a financial institution, or to a conventional institution, and vice-versa, on the condition that the seller will repurchase it (and the purchaser will resell it). It mandates that a Repo SBS transaction is to be executed in this way: as an al-bai' ma'a al-wa'd bi al-syira.

This statute regulates state shari'a securities (Surat Berharga Syariah Negara - SBSN), as well as the companies that issue them, and the utilisation of state-owned assets therein. It defines a state shari'a security as a state security issued pursuant to shari'a principles, as partial evidence of the inclusion of state shari'a security assets, both in rupiah and foreign currencies.

This fatwa acknowledges that brokerage in the property market is becoming increasingly prevalent, and that shari'a financial institutions have requested a fatwa on the subject. The fatwa permits brokerage, on the following conditions:

1. a brokerage agreement must be free of confusion and irregularities;
2. the authorised duties of the broker must be clear in the brokerage agreement;
3. the term of a brokerage agreement must be clear;
4. brokers must execute certain duties that form the basis of their payment;
5. owners of assets and intermediaries are to have sufficient knowledge of the assets for sale.

The fatwa also sets out conditions for brokers who choose to involve a shari'a financial institution in the brokerage process.

This fatwa acknowledges that previous DSN-MUI fatwas on mortgages had not accommodated the increase in mortgage-based businesses, and that shari'a financial institutions required a fatwa on the subject.

The fatwa states that all forms of financing/disbursement of funds by a shari'a financial institution can be guaranteed by collateral (rahn), but that security guarantees must be items of value, whether stationary or mobile, including state shari'a securities and other shari'a securities. Debts must be binding, quantified, and have a clear term. They may not, however, be increased if a time extension is granted. Shari'a financial institutions may issue a fine to a customer if they breach the agreement or are tardy in executing their contractual obligations.

This fatwa recognises the increase in shari'a-type business, as well as the demand for clarification on fiqh muamalah maliyah (commercial goods law), in order to increase its status and role. It also recognises that shari'a financial institutions have requested a fatwa for the development of syndicated shari'a financial products. The fatwa defines syndicated financing (al-tamwil al-mashrifi al-mujamma') as an agreement between several financial institutions (be they all shari'a financial institutions, or some shari'a financial institutions and some conventional financial institutions) to jointly-finance a specific project. Syndicated financing agreements can take the form of sale-purchase agreements, rental agreements, and joint-venture agreements. In the event all financial institutions are shari'a-based, all relevant information can be contained in one document. If some of the participating financial institutions are conventional, i.e. not shari'a-based, the conventional institutions must have their relevant information in a separate document from that of the shari'a-based financial institutions.

This fatwa acknowledges that society and shari'a financial institutions would benefit from an explanation on the transfer of murabahah financing (customer debts or accounts payable) between shari'a financial institutions. The fatwa outlines three contractual options for transferring murabahah financing debts:

1. Akad Hawalah bil Ujrah: a promissory note with a financial incentive for the party assuming the debt;
2. Akad Ijarah Muntahiyah bi Al-Tamlik: financing that uses a rental agreement accompanied by an undertaking to transfer ownership of a rental item to the party renting at the conclusion of the term of the rental agreement;
3. Akad Musyarakah Muntanaqishah: where the capital of one investor in a musyarakah financing agreement is inadequate because their portion has been purchased by another party incrementally.

In regards to a party seeking to transfer accounts payable pursuant to a murabahah agreement, a party may do so in exchange for an item of good value (tsaman), but not a good sum of money (tsaman) because this constitutes bai' al-dain al-mu'ajjal li ghair al-madin bi tsaman hall (selling accounts payable that are not yet due to someone other than the debtor for a cash price).

This fatwa acknowledges society's queries on shari'a refinancing, as well as the fact that no preceding DSN-MUI fatwa has answered them. Shari'a refinancing is defined as the provision of a new financing facility for new customers or customers yet to repay pre-existing financing. It covers two situations:

1. financing provided to prospective customers that own an asset outright; and
2. financing provided to a prospective customer already in receipt of financing yet to be repaid.

This fatwa acknowledges the benefits of a shari'a-based pension program, defines key terms, and navigates through the different types of agreements required to implement such a program, including bequests (hibah), agency agreements (wakalah), and cooperative agreements (Mudharabah).

This fatwa acknowledges that certain conditions will dictate that customers will transfer or withdraw their funds from a shari'a financial institution as a result of a displaced commercial risk, necessitating shari'a banking policies that:

1. smooth over revenue without a profit equalisation reserve; and
2. smooth over revenue with a profit equalisation reserve.

Accordingly, shari'a financial institutions require a set of shari'a-based guidelines pursuant to which they can form a profit equalisation reserve, derived from their own profits, and which tells them when may draw upon it. The fatwa dictates that income smoothing may only be conducted on third party monies under a mudharabah agreement. It may not be conducted if its implementation will merely result in accruing interest for the bank.

In the case of income smoothing without accessing a profit equalisation reserve, where profits from an enterprise are lower than projected, a shari'a financial institution may relinquish its right to equalise financial incentives for customers in order to remain competitive.

This fatwa acknowledges that shari'a financial institutions accumulate funds through savings, deposits, and account transfers, pursuant to shari'a-friendly contracts. Moreover, that in order to attract the public's interest in their products, shari'a financial institutions offer their customers rewards as promotions, as well as for customer loyalty. The fatwa concludes that promotional rewards may be an item or a service, but not a sum of a money. That item or service must be halal. The shari'a financial institution may set conditions vis-a-vis receipt of the reward, provided those conditions are not interest-bearing. Should the recipient breach these conditions, they are required to return the reward. Rewards are also not permitted if they are for the personal gain of an employee of the relevant financial institution, have the potential to be deemed a bribe, and/or are covertly interest-bearing.

This fatwa acknowledges that undertakings often form part of a financial and business transaction, and that the shari'a financial industry, as well as society in general, would benefit from an explanation of contractual obligations in shari'a financial and business transactions.

The fatwa states that such undertakings are binding and enforceable, provided the following conditions are met:

1. The party making the undertaking (wa'id) has legal standing (ahliyyat al-wujub wa al-ada');
2. In the event an undertaking is made by a party without legal standing, the validity of the undertaking depends on the permission granted by their guardian; and
3. The wa'id must have the ability and authority to make an undertaking (mau'ud bih).

Moreover, that:

1. the undertaking (wa'd) must be in writing in a contractual agreement;
2. the undertaking must be related to something that must be met or implemented by the person to whom the undertaking is made (mau'ud);
3. the thing promised (mau'ud bih) may not conflict with shari'a;
4. the contents of point 2 may also not conflict with shari'a; and
5. the mau'ud must already have met or implemented the condition in point 2.

This fatwa acknowledges that shari'a financial institutions declare their murabahah financing profits either as a proportion or an annuity. As one of these approaches has proven to be problematic for the financial industry and society, however, the fatwa acknowledges the need for an explanation from a shari'a perspective of the two approaches. The fatwa defines the proportional method (Thariqah Mubasyirah) as multiplying a percentage of the profit by those accounts payable that have been successfully billed, while it defines the annuity method (Thariqah al-Hisab al-Tanazuliyyah/Thariqah al Tanaqushiyyah) as multiplying a percentage of the profit by the remainder of the cost price not yet charged. The fatwa permits shari'a financial institutions to adopt either approach, provided they adhere to the following prescribed conditions:

1. The proportional approach, as used by traders, is permissible provided it is conducted pursuant to standard trading practice;
2. Shari'a financial institutions may adopt either approach, provided they do so in accordance with the standard shari'a financial institution practice;
3. The selection of a profit declaring approach in a shari'a financial institution must take heed of what is best for the development of that shari'a financial institution;
4. The preferred approach for a shari'a financial institution in a period of growth is the annuity-based approach; and
5. In the event a shari'a financial institution adopts the annuity-based approach, a portion of the profits must be from the repayment term, and may not be declared in full before all accounts payable have been paid.

This fatwa acknowledges that society requires a more detailed explanation on the shari'a multi-level direct sale of Umrah services. It addresses this by providing a raft of regulating guidelines regarding the provision and retention of services provided for those undertaking the Umrah.