In the name of Allah,
The Entirely Merciful, The Especially Merciful
Praise is due to Allah, Lord of the worlds, may the blessings and peace be upon our master Muhammad, the seal of Prophets, on his family, and all his companions.
Resolution No. 241 (3/25)
Impact of Covid-19 Pandemic on Sharia Rulings of Transactions, Contracts, and Financial Obligations
The Council of the International Islamic Fiqh Academy of the Organization of Islamic Cooperation, holding its 25th session in Jeddah, Kingdom of Saudi Arabia, on 29 Rajab – 3 Shaaban 1444H (20-23 February 2023),
Having examined the research papers submitted to the Academy concerning the Impact of the Covid-19 pandemic on Sharia rulings of Transactions, Contracts, and Financial Obligations,
Having considered the Academy’s previous resolution no. 240 (2/25) concerning the Impact of the Covid-19 Pandemic on the Rulings of Worship, Family, and Crimes,
Having listened to the discussions and deliberations of the Academy’s members and experts,
Resolves
First: The Covid-19 pandemic is considered one of the emergency excuses that allow for contractual obligations to be reviewed, either by postponement, cancellation, termination, or otherwise. According to Islamic jurisprudence, the Sharia rulings on transactions in this context fall under the same section of Sharia rulings relating to pandemics and epidemics.
Second: The aggrieved party has the right, in contracts whose conclusion or execution has been disrupted during the pandemic in the presence of an earnest deposit, or a margin of seriousness to terminate the contract and recover the deposit and the margin of seriousness, or to settle for a temporary suspension of the execution of the contract’s obligations, or to alleviate the obligation of the aggrieved party in a manner that reconciles the advantages of both parties.
Third: The Covid-19 pandemic has no impact on residential rentals after the rented property has been used, and the rental amount remains a debt owed to the tenant if the latter is unable to pay it.
Fourth: It is not permissible to enforce the penalty clause if the Covid-19 pandemic has been the cause of the delay in the contract’s performance.
Fifth: It is permissible under state supervision to redistribute salaries, in a measure compatible with the impact of the pandemic on public life; and in the interests of justice for all parties during the pandemic. It is also permissible to reduce wages following the reduction of working hours in proportion with the decreased output.
Sixth: If Islamic cooperative insurance is not accessible, it is permissible to turn to commercial insurance, to the extent needed, to cope with the consequences of the coronavirus.
Seventh: The financial arrears arising from the various financing contracts whose installments have been hampered by the Covid-19 pandemic, should be reconciled with justice.
Eighth: If an epidemic or a pandemic has similarities to the Covid-19 pandemic, it shall have the same Sharia rulings.
Recommendations
- Calling on governments to implement well-organized and sustainable humanitarian initiatives at the local and global level to mitigate the ravaging material effects resulting from the bankruptcy of numerous corporations and institutions by providing support to the least developed countries and to the aggrieved local sectors, as well as delivering effective and necessary aid to displaced people, refugees, the homeless, people in distress, and victims of conflicts, natural disasters, and epidemics, whenever possible.
- Calling on commercial enterprises, financial institutions, and philanthropists to extend their donations, grants, and charities for people materially affected by the Covid-19 pandemic. This can be achieved through the establishment of volunteer programs and projects with the goal of alleviating the pandemic’s effects on them.
The Council of the Academy commends the principles and resolutions issued by the judicial authorities in a number of OIC Member States that have addressed the impact of the pandemic on the rulings of contracts, transactions, and financial obligations; and urges researchers to take notes of them in their studies.
Indeed, Allah is All-Knowing.
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