ABSTRACT
The shift from the real economy towards the financial economy, especially post-1960s, has brought major changes in redefining what constitutes a valid contract and a commodity (māl mutaqawwim) in Fiqh al-Mu’amalāt. These new phenomena have been created by the financial instruments developed by financial intermediaries to operate the financial economy. Consequently, these new financial products and contracts warrant a deep analysis to determine their legitimacy from an Islamic view, because they often contain prohibited (ḥarām) elements. Another issue is the abstract legal nature of these concepts. However, they gained legal acknowledgment because the law gives them recognition. Faced with the dilemma of adopting new financial instruments or not, Muslims have to either embrace the fast-moving financial economy or remain stagnant. Hence, in determining the way forward in embracing these modern financial and economic concepts, Muslims will have to resort to the primary sources of Islamic law and rethink deeply the way the principles of jurisprudence should be used to arrive at a conclusion. Islamic finance is an emerging area which requires a good mastery over Uṣūl al-fiqh. Some scholars have placed an overdependence on using Maqāsid al-Shari’ah (higher objectives of Shari’ah), al-Qawā’id al-Kulliyah al-Fiqhiyyah (legal maxims), etc. to determine the rulings on these modern instruments. However, these are not sources of law per se, though they complement the jurisprudential approach. This chapter will argue that articulating shariah-compliant solutions in a modern financial economy demands a critical methodological engagement with both: Uṣūl al-fiqh and al-Qawā’id al-Kulliyah al-Fiqhiyya. An overemphasis on one methodological approach at the expense of the other will lead to either rigidity, rendering the Shariah stagnant, or a laissez-faire attitude undermining definitive rulings from scriptural sources. An overview of the problem will be highlighted, followed by an outline of Uṣūl al-fiqh, which centres on the distinction between Qaṭ’ī and Dhannī interpretations and the relationship between Usūl al-fiqh and Qawā’id al-Kulliyah al-Fiqhiyya. Thereafter the application of Usūl al-fiqh and al-Qawā’id al-Kulliyah al-Fiqhiyya to some Islamic finance concepts will be discussed.
