Assignment Of Debt Research Articles

Application of Guarantee contracts in Islamic Financial Transaction: Analysis of BNM and AAIOFI

A guarantee (Kafalah) is considered an effective Islamic finance contract aimed at providing assurance and security by having a third party; the guarantor, commit to fulfilling the financial obligations of the debtor in case of default. However, Bank Negara Malaysia (BNM) policy document considered guarantee as the term (kafālah) while the Accounting and Auditing Organization for Islamic Financial Institutions (AAIOFI) considered it as the term Damān. The term guarantee falls within the category of non-compensatory contract in classical Islamic financial contracts whereby there are no returns or compensation available for contracts like benevolence loans (Qard), gifts (Tabarru/Hibah), guarantee (Kafalah), and assignment of debt (Hawalah). In the modern financial setting, this might not fulfill one of the objectives of Islamic financial institutions to offer services for profit. This study explores the application of Guarantee (Kafalah) as a non-compensatory and noncommutative contract, falling under the category of Uqud Ghair Mua’wadha in Islamic Financial Institutions. Contracts such as benevolence loans (Qard), gifts (Tabarru/Hibah), guarantees (Kafalah), and assignment of debt (Hawalah) are characterized by the absence of return or compensation. This study uses the doctrinal approach of the qualitative method in exploring juristic meaning, justification, and implications of the shariah terms. It analyses the sustainable implication of its application in contemporary Islamic finance institutions between BNM and AAIOFI. This study found that despite the classical implication of guarantee as a non-compensatory contract guarantee contracts cannot yield a direct profit; yet can generate income through, Wakālah (agency fee), such as issuing LCs guarantees. These may be charged based on expenses incurred, potentially in amount-based (possibly slabs) but not time-based structures. The finding shows that the comparative analysis of regulatory frameworks by BNM and AAIOFI underscores the challenges of harmonizing global standards with local contexts, highlighting the necessity for ongoing dialogue and collaboration to ensure coherence and adaptability in Islamic finance regulation.

Applying the Assignment Institution in the Pharmaceutical Market: Legislative Lacunae or Unconstitutionality?

Romanian Civil Code provides by Article 1566 that the assignment of debt is a way of forwarding a claim the transferor holds against a third party. Therefore, when signing by the parties of the debt assignment contract, the claim goes out of the assignor’s property and is validly entrusted to the transferee (assignee). In this paper, we try to show the effects of the contract which are in accordance with Article 1575 NCC respectively between the parties, from the date of signing of the contract and to the assigned debtor from the date of assignment notification or acceptance. In the pharmacy market, this institution is used to ensure that medicine suppliers secure the value of the products they sell, as they conclude debt assignment contracts with their debtors for passing their claims against Health Insurance Houses.

Transfer of creditor’s rights to the third parties as the substitution of parties to an obligation

The article studies the general issues of the transfer of creditor’s rights to the third parties as the substitution of parties to an obligation. It is noted that legal literature devoted to the study of law of obligation, the focus is on the institute of modification of obligations. The author stresses that in civil law, there are many interpretations of the concept “substitution of parties to an obligation”, but many scholars share a unified position towards the concept of the institute of modification of obligations by defining it as a change of some elements. The author proposes the classification of cases of modification of obligations by E. Hodeme, who separates three types of modification of obligations: changes which belong to obligation power; changes which belong to a subject or content of an obligation; changes which belong to active or passive subjects of obligation. It is highlighted that as the parties of obligation involve an active subject (a creditor) and a passive subject (a debtor), an obligation is subject to modification both on the part of the creditor and the debtor. In other words, the original creditor and/or debtor can secede from this obligation during obligation action through the substitution. Legal literature defines such a change on the part of the creditor and the debtor as the substitution of parties to an obligation. Taking into account the research subject, the main focus is on the contractual ways of the substitution of parties to an obligation, specifically the contractual transfer of the creditor and assignment of debt. The legal regulation of cooperation between persons participating in the transfer of the rights of demand of the original creditor to the new creditor. In particular, the author characterizes the interrelation between the original and new creditors and the interrelation between the new creditor and the debtor. The research makes it possible to conclude that the legislator strives to keep the stability of the original obligation through allowing the transfer of the creditor’s rights and to avoid the abuse of creditors, it ensures the legal protection of creditors –the weakest subject from the perspective of legal scope of the influence on the process of transferring the mandatory rights of demand to him – using compulsory rules.

Institution of the contract transfer in the light of model law acts

The transfer of a contract is a legal structure that allows you to transfer to the third party the rights and obligations of one of the existing parties to the contract. Nowadays, only a few European legal orders have decided to regulate this institution explicitly. In other cases, the admissibility of performing this activity is derived from the principle of freedom of contract. The problem of the widespread functioning of this structure in the absence of relevant standards has been noticed by the creators of numerous model law projects, the PECL Principles, Draft Common Frame of Reference and UNIDROIT Principles. Each of these soft law acts contained at least a rudimentary regulation of the transfer of contract, which was clearly separated from the structure of debt assumption and assignment of debt.

Sharī‘ah Analysis of Acquisition of House Financing Portfolio

Purpose - The Objective of this study is to provide a comprehensive scenario of the Acquisition of House Financing transaction taken place between Bank Islami and Citi Bank during 2010 in the light of Sharī’ah guidelines. The purpose of this whole complex transaction was to acquire Citi Banks house financing portfolio. The successful completion of such a transaction is an important milestone for Islamic Banking. The complete understanding of such transactions is of prime importance for Islamic banking academia. 
 Findings - The study concludes that the transaction based on Hawalah (assignment of debt) and Wakalah Lil Qabz (recovery agency) is very complex and intelligently designed to conduct these transactions. 
 Policy Implications - This study will enable the policymakers, Sharī’ah Advisors, and bankers to explore new avenues for investment in Islamic Banking Institutions. This study will also enable academicians and research students to conduct research for product development in related areas with conventional banks. The complete understanding of such transactions is of prime importance for the product development department of Islamic Banks.

The Statutory Reform of Chinese Private International Law in Property Rights: A Silent Revolution

This article reviews the statutory reform of Chinese private international law from the perspective of property rights which concludes that notwithstanding the significant improvement, the new Private International Law Act of China are fraught with various defects. In the field of property, Article 37 and Article 38 are particularly problematic as the introduction of unlimited party autonomy into the choice-of-law rules for movables and res in transitu is theoretically indefensible and practically troublesome. Moreover, there are a number of defects or problems with Article 39 and Article 40 of the Act respectively. What’s more, the Act neglects some other important types of property that call for special treatment, such as cultural property, and assignment of debt. In the end, the article puts forward the corresponding suggestions for improvement.

What is a Contract of Hawalah? (حوالۃ)

Literally, the word hawalah/حوالہ means shifting a thing from one place to another. Technically, as a term of law, hawalah/حوالہ means the shifting or assignment of debt from the liability of original debtor to the liability of another person. According to Imam Abu Hanifah , Hawalah/حوالۃ is a transfer of debt terminating the liability of the original debtor, to a third person. After the conclusion of Hawalah/حوالۃ, the principal debtor is relieved from the liability. He argues that the term Hawalah/حوالۃ is derived from the word Tahwil/تحویل, which necessitates the transfer of debt to the transferee and exemption of the transferor. The transferor is also exempted because of the acquiescence of the transferee.According to Imam Muhammad , Hawalah/حوالۃ is the transfer of demand only while the actual burden of payment rests with the principal debtor. According to Imam Zufar , the transferor is not exempted because of the analogy that subsists between his case and that of bail, for both are contracts of bail. The person who is bailed is not exempted from the debt so neither should be the transferor. Parties involved in Hawalah/حوالۃ:There are three parties in the contract of assignment of debt (hawalah): 1. Debtor / assignor (muhil / محیل). He is the original debtor who assigns his responsibility to another person.2. Creditor / assignee(muhal/محال) 3. Transferee (New debtor to whom transfer is made) is called muhal `alayh/محال علیہ ).

A question of priorities: choice of law and proprietary aspects of the assignment of debts

Among the fields of academic legal research, the topic of choice-of-law rules for the assignment of debts in financial services and markets must be one of the most complicated, challenging and arcane. But what is merely challenging in the academic arena becomes positively daunting when tested in the crucible of legislative reform, where there is little or no room for error. And if said legislative reform is to be accomplished within a tight timeframe in a highly political forum and to be drafted by civil servants rather than conflicts specialists or financial experts, the endeavour must be regarded not so much as difficult but virtually hopeless. Certainly that was the recent experience of the European Council's standing Working Group on Civil Law during the negotiations on the transposition of the Rome Convention on the Law Applicable to Contractual Obligations 1980 into the European legal acquis as the putative Rome I Regulation.

BGH, Urteil vom 27. Juni 1995 - XI ZR 8/94, BGHZ 130, 115

The parties to the case decided by the German Federal Supreme Court were in dispute over the validity of a global assignment of debts owed to the party seeking credit and a charge over property in a warehouse with variable content (Sicherungsübereignung). The plaintiff granted credit to the debtor, whose liquidator became the defendant to the action. The aforementioned means of security served to secure the advance - in addition to charges over immovable property and over machinery. The standard form for global assignment of debts owed to the party seeking credit of 7 February 1992 provided, inter alia: Para 4 "In establishing the level of cover, the relevant factor is not the nominal value of the debts assigned but their security value. The security value of each cdebt is to be determined by the bank in accordance with the principles of valuation common in banking practice. The security value of the debts assigned is to amount to 120% of the claims that the bank is seeking to secure. In establishing the level of cover, other forms of security provided to the bank and the security value thereof, are to be taken into account." Para 13 "The bank is obliged to grant a release concerning the rights acquired under this contract when it has been satisfied in relation to all the claims secured thereby against the debtor. The bank must, on application by the person providing the security, grant a partial release concerning a right acquired by it under this contract if the agreed level of cover is exceeded on a more than temporary basis. The right to be released will be selected by the bank." Paragraph 2 of the standard form contract establishing a charge over property (Sicherungsübereignung), entered into on the same day stated: "In establishing the level of cover, the relevant factor is not the nominal value of the goods subject to the charge, but rather their security value … The security value of the goods subject to the charge is to amount to 120% of the claims that the bank is seeking to secure. In establishing the level of cover, other forms of security provided to the bank, and the security value thereof are to be taken into account. In the case of a claim on the part of the person providing the security for the grant of a release, reference is made to para. 12 of this contract." The release clause referred to was in the same form as para. 13 of the global assignment. In addition, both standard form contracts referred to the plaintiff's general conditions of contract. These were in conformity with the 1986 General Conditions of Banking Contracts. § 20(2) of these Conditions provided: "Notice of the fact that the security is to be realised is not required. Nor is the observance of a period within which settlement can be made, or a demand for immediate cash payment. No variation of the usual form of enforced sale may be requested. The bank will, so far as possible, communicate the form, place and time of the sale." The plaintiff brought an action for a declaration, inter alia, that the global assignment and the charge over the warehouse were valid. The Landgericht dismissed the claim, the Oberlandesgericht allowed an appeal. A further appeal to the Federal Supreme Court was unsuccessful. In the opinion of the Supreme Court, the nullity of the rules on realisation of security in § 20(2) of the 1986 General Conditions of Banking Contracts did not affect the validity of global assignments and charges over property (§ 6(1) of the Law on General Conditions of Contract (AGBG)). The invalidity of the rules on realisation of security does not unreasonably disadvantage the provider of the security - in contrast to the position where wages or salary are attached - because under § 6(2) AGBG the ordinary rules of law fill the gap left by the invalid rules on realisation. As to the question whether it is an unreasonable hardship within the meaning of s 6(3) AGBG to hold a contracting party to the terms of the contract - the relevant time

La publicite des suretes reelles mobilieres

The opening of the borders within the EEC to the free movement of capital, credit and banking services requires an improvement in the information available about secured rights in movable property. Creditors are used to their national systems and tolerate them, even though they are all somewhat confusing and inefficient; each profession has been able to identify a type of secured right with whose advantages and limitations it is familiar. But this current situation must change because it is an obstacle to the free movement of services. The system of real security in movable property is too lacking in transparency; even in countries in which registration exists, it is patchy and incomplete. An increase in the availability of credit and relationships based on credit requires greater transparency. A high priority requirement for any improvement in the system of registration of secured rights in movable property is that it must not complicate that system. It is therefore necessary that, while offering relevant and rapid information, such a system does not on balance impose costs and consequences that are more burdensome than those of the present system. The solution here proposed makes use of existing approaches by retaining local registry offices (paragraph 23), limiting the information disclosed to a financial statement (paragraph 11) and enforcing registration by making unregistered rights unenforceable and determining priority on the basis of the date of registration (paragraphs 16 and 45). The improvements would arise from the fact that the local offices would be linked to a database which would allow direct registration and consultation from any terminal with a telephone connection (paras. 24 and 28). This system functions well in France for the purposes of consultation. The list of secured rights for which registration is required would be restricted (paragraph 44) and would include the privilege claims based on the idea of credit, the assignment of debts, and reservations of title - at least if the debt is for more than a given amount (paragraph 35).

Lembaga Alat-Alat Pembajaran Luar Negeri and Republic of Indonesia v. Brummer, Bekker and N. N. Winkelman en Co.'s Handelmaatschappij.

Recognition of acts of foreign States and Governments — Foreign exchange control legislation — Whether applicable to assignment of debt existing under law of foreign State — Relevance of Articles of Agreement of International Monetary Fund — The law of the Netherlands.

Assignment of Debt (Eastern Sector of Berlin) Case.

Jurisdiction — Territorial Limits of — Foreign Confiscatory Decrees — Effect of — Debt Owed to Victim of Confiscation — Debtor in Country of Forum — Assignment of Claim by Victim of Confiscation to Assignee in Country of Forum — Whether Assignee Entitled to Payment — The Law of Germany.Recognition of Legislative Acts of Foreign States — Confiscatory Decree — Effect of Decree in Country of Forum — Debt Owed to Victim of Confiscation — Debtor in Country of Forum — Assignment of Claim by Victim of Confiscation to Assignee in Country of Forum — Whether Assignee Entitled to Payment — The Law of Germany.

Notes on a Proposed Bill. Successive Assignment of Debts Secured by the Same Lien

Notes on a Proposed Bill. Successive Assignment of Debts Secured by the Same Lien

Pledges. Delivery to Create a Future Pledge. Assignment of Debt to One Person and of Pledge to Another

Pledges. Delivery to Create a Future Pledge. Assignment of Debt to One Person and of Pledge to Another

Choses in Action. Manner and Effect of Assignment. Partial Assignment of Debt

Choses in Action. Manner and Effect of Assignment. Partial Assignment of Debt