Combination of Contracts in Sovereign Sukuk Structure in Indonesia And A Proposed Sharī’ah Parameters
October 3rd, 2017
By Muhammad Iman Sastra Mihajat
Sukuk is one of the most attractive Islamic instruments currently in Indonesian Islamic capital market. This instrument brings about the inevitable combinations of contracts in one single transaction to serve variety of demands of the Islamic investors. The fact shows that majority of contracts in Sukuk market (corporate and sovereign) are using double and multiple of contracts in their ‘aqad structure. However, based on hadith of the Prophet, it is prohibited to combine more than one contract in single transaction. Therefore, some Muslim scholars have questioned the level of compliance with Shari’ah law in Sukuk issuance. This paper provides proper understanding over the prohibited combination of contracts in Shari’ah. It can be concluded that not all combinations of contracts are prohibited as long as they follow the Shari’ah parameters guidelines. The paper laid down Shari’ah parameters to combine more than one contract in one single transaction, so as it is beneficial for Sukuk issuer (corporate and government) for future development before issuing the Sukuk.