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ASSIGNMENT
ON
Mudaraba Company
SUBMITTED TO:
Ma’am Hina
SUBMITTED BY
Khalid Khan
BS Law 6th Semester
Roll No: 708
LAW COLLEGE
UNIVERSITY OF PESHAWAR
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Content
Mudarba
Mudarba concept
Parties
Types of Mudarbah
Roles of Mudarib
Constitution
Structure
Rules and regulation for Rab-ul-mal & Mudarib
General rules and regulation Regulatory Frame work
Mudarba companies work in Pakistan
Mudarba
1. AL-QURAN ;-
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Believers, fear Allah and give up what is still due to you from usury, if you are
believers; [SURAH AL-BAQARAH AYAH 278]
2. THE MODARABA- DEFINITION
“Modaraba is a kind of partnership , wherein one party provides finance to other
party for the purpose of carrying on business”
3. Modaraba concept
Modaraba is one of the prime modes of Islamic Financial System. The concept of
Modaraba was given FOURTEEN HUNDRED YEARS back by our Holy prophet
Hazrat Muhammad (Peace be upon him).
100% Islamic concept
Non-Banking Company
It deals with finance act as NBFC
Mudarabah is a product of Islamic bank
4. Parties involve in modaraba
There are two parties invovle:
1. Rab-Ul-Mal (Invester)
2. Mudarib (Agent,working capital)
5. Types of modaraba ;
1.Al Mudarabah Al Muqayyadah (Restricted Mudarabah)
3. Al Mudarabah Al Mutlaqah (Unrestricted Mudarabah)
6. RULES OF MODARABA
1. Ameen (Trustee)
2. Wakeel (Agent)
3.Shareek (Partner)
4. Zamin (Liable)
5. Ajeer (Employee)
7. Rabul Mal
He gives only money
He has no management skills
Rab-ul-Mal cannot ask to Mudarib
Where is my money?
Where to invest?
7. MUDARIB
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Work as manager
He cannot invest in business
He knows about business term & condition
He works Seprately
Has business skills.
Have knowledge about business management.
All decision are made by him.
8. CONSTITUTION OF MODARABA COMPANIES AND MODARABA
In 1980 Zia-ul-haq Islamization all financial institutions operating in
Pakistan
The Modaraba Companies & Modaraba (Floatation & Control)
Ordinance, 1980 and Modaraba Companies and Modarabas Rules
1981, were promulgated in the early 80’s by the Government of
Pakistan.
9. Rules and regulation for rab-ul-mal
Rab-ul-Mal has no right to ask why you make this decision
Only Rab-ul-mal can invest.
All assets are owned by Rab-ul-Mal
He has right to check and balance on mudarib but have no right to
interept in Mudarib decision making Rules and Regulation for Rab-ul-
Mal
He cannot interfere in mudarib business
He cannot ask about our money & investment
He provide only capital
Loss only bear by rab-ul-mal
If loss done by mudarib then loss bear by together(Negligence of
mudarib)
All asset owned by rab-ul-mal
All expenses are being beard by the Rab-ul-Mal (office , rent etc)
Loss will beard by the Rab-ul-Mal
Profit Ratio will be predefined.
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10. Rules and Regulation for mudarib
Mudarib works individually
He cannot add partner
He cannot invest
Business related decisions are only made by Mudarib
Mudarib invest according to his expertise.
All the personal expense will be beard by the Mudarib himself
Mudarib can hire new employee and his salary expense will be beard
by the company.
Personal expenses beared by own
If mudarib hired any employee then company will pay their expenses
In case of loss hired employee cannot ask about his salary from
Mudarib
11. General rules and regulation
Rab-ul-mal trust on the abilities of mudarib
According to PAKISTAN law (90%) share of Rab-ul-mal and (10%) share hold
by mudarib
According to PAKISTAN law mudarib can received profit from dividend
Mudarib can invest money in business in shape of share and stock
Rab-ul-mal has right to sale our business of any time
It invest in stock exchange
It can invest in venture capital
Invest in the stock market
Indulge in Ijara, Morabaha and Musharaka Financing activities
Indulge in trading of Halal Commodities
Undertake project financing activities
Act as a venture capital company
12. THE REGULATORY FRAMEWORKTHE
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REGULATORY FRAMEWORK The Rules & Regulations and the regulatory
framework applicable to Modaraba and the Modaraba Companies are:
The Modaraba Companies & Modaraba (Floatation & Control) Ordinance, 1980-
registration of Modaraba Companies and floatation, management and regulation
of Modarabas. -
The Modaraba Companies & Modaraba Rules, 1981 -
The Companies Ordinance , 1984 -
The Religious Board -
Prudential Regulations for Modaraba
13. Termination of mudarabah
Mudarabah can be terminated any time by giving notice.
If Mudarabah was for a particular term, it will terminate at the end of
the term.
Termination of Mudarabah means that the Mudarib cannot purchase
new goods for the Mudarabah. However, he may sell the existing
goods that were purchased before termination.
If all assets of the Mudarabah are in cash form at the time of
termination, and some profit has been earned on the principal amount,
it shall be distributed between the parties according to the agreed ratio.
If the assets of Mudarabah are not in cash form, they will be sold and
liquidated so that the actual profit may be determined.
14. Modarabah companies work in pakistan
Finicial link modarabah
First allied bank modarabah
First equity modarabah
First general leasing modarabah
First habib bank modarbah
Industrial capital modarabah
Etc
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SUBMISSIONS
I. ISSUE I: THE ARBITRAL TRIBUNAL DOES
NOT HAVE THE RELEVENT JURISDICTION
TO HEAR THIS CASE:
i. VALADITY OF THE ARBITRATION AGREEMENT:
a. INVALIDITY OF THE AGREEMENT:
b. ASSYMETRIC NATURE OF THE
ARBITRATION:
C. VALDITY OF ASYMMETRIC CLUASES:
i. i. PARTY AUTONOMY:
ii. EQUAL TREATMENT AND
UNCONCIONBILITY:
iii. VIOLATION OF THE DANUBIAN PULIC
POLICY:
iv. NEGOTIATION COMMENCED IN BAD FAITH:
v. UNDUE BENEFIT:
vi. THE CONTRACT WAS NOT NEGOTIATED IN
GOOD FAITH:
vii. ADAPTING ARTICLE 21(2) AS A BILATERAL
AGREEMENT:
viii. AWARD UNDER 21(2) TO EXPLICITLY
CONTRAVENE THE PUBLIC POICY OF
DANUBIA:
II. ISSUE II: THE REMOVAL OF THE EXPERT
PROF. JHON
DUTIES OF AN EXPERT:
RIGHT TO PRESENT EVIDENCE:
i. IMPARTIALITY OF THE EXPERT:
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