Resolutions of the SC Shariah Advisory Council

Resolutions of the Securities Commission Shariah Advisory Council, Second Edition (pdf)
Resolutions of the Shariah Advisory Council of the Securities Commission Malaysia (pdf)

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New Resolutions of the SC Shariah Advisory Council

The 223rd Shariah Advisory Council Of The Securities Commission Malaysia Meeting (29 August 2019)

Revised Resolution on Utilisation of Sukuk Proceeds for Refinancing of Conventional Borrowings

Background
The Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) had, in series of its meetings, deliberated on the issue in relation to the utilisation of sukuk proceeds for refinancing of conventional borrowings that were used for Shariah non-compliant purposes. This issue was related to the previous SAC resolution on utilisation of sukuk proceeds for refinancing of conventional borrowings where the SAC had resolved at the 190th SAC meeting held on 27 October 2016 that the sukuk proceeds may be utilised to refinance (wholly or partly) conventional borrowings (Previous Utilisation of Sukuk Proceeds for Refinancing Conventional Borrowings Resolution).

Issue
The issue in deliberation was whether the utilisation of sukuk proceeds for refinancing of conventional borrowings that were used for Shariah non-compliant purposes complies with the Previous Utilisation of Sukuk Proceeds for Refinancing Conventional Borrowings Resolution.

Resolution
The SAC had, at its 223rd meeting held on 29 August 2019, resolved that the sukuk proceeds may be utilised to refinance (wholly or partly) conventional borrowings provided that the conventional borrowings were not used primarily for activities or purposes that are prohibited by Shariah.

Notwithstanding the above, if a company that carries out Shariah non-compliant business activities is in the process of converting its business into a fully Shariah compliant business, the sukuk proceeds may be utilised to refinance (wholly or partly) its conventional borrowings.

This resolution is applicable to the issuer and the issuer’s group of companies and it shall supersede the Previous Utilisation of Sukuk Proceeds for Refinancing Conventional Borrowings Resolution.
The 219th Shariah Advisory Council Of The Securities Commission Malaysia Meeting (25 April 2019)

1) Guarantee of Profit by a Third Party, Sister Company and Associate Company of the Sukuk Issuer in Sukuk based on `Uqud Ishtirak and `Aqd Wakalah bi al-Istithmar

Background
The Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) had, in series of its meetings, deliberated on the following issues:

(i) guarantee of profit by a third party, sister company and associate company of the sukuk issuer; and

(ii) imposition of ujrah (fee) on such guarantee,

in sukuk based on`uqud ishtirak and `aqd wakalah bi al-istithmar.

Issue
The issue in deliberation was on whether a third party, sister company and associate company of the sukuk issuer may guarantee profit and impose ujrah on such guarantee in sukuk based on `uqud ishtirak and `aqd wakalah bi al-istithmar.
Resolution
The SAC had, at its 219th meeting held on 25 April 2019, resolved that it is permissible for a third party, sister company and associate company of the sukuk issuer:
(i) to provide guarantee on profit; and
(ii) to impose ujrah on such guarantee,
in sukuk based on`uqud ishtirak and ` aqd wakalah bi al-istithmar.

2) Shariah Non-Compliant Assets as Collateral in Islamic Capital Market Products

Background
The Shariah Advisory Council of the Securities Commission Malaysia (the SAC) had, in its 219th meeting held on 25 April 2019, deliberated on the issue of Shariah non-compliant assets as collateral in Islamic capital market (ICM) products.

Issue
The issue in deliberation was on the permissibility of using Shariah non-compliant assets as collateral in ICM products.

Resolution
The SAC resolved the following:

(1) Asset which is valuable and recognised by Shariah may be used as collateral in ICM products. These assets include:
(i) A physical asset that is used to carry out activities which are Shariah compliant and/or Shariah non-compliant.
(ii) A financial asset that is Shariah compliant and/or Shariah non-compliant.
(2) In the case where Shariah non-compliant financial asset is used as collateral, the SAC resolved as follows:
(i) Ordinary Shares and Preference Shares
(a) Shariah non-compliant ordinary shares and preference shares of companies listed on Bursa Malaysia; and
(b) Shariah non-compliant ordinary shares and preference shares of unlisted companies,
may be accepted as collateral provided that the core business of the companies is Shariah compliant based on the confirmation by the Shariah advisers registered with the Securities Commission Malaysia. The total value of the Shariah non-compliant ordinary shares and preference shares may be accepted as the collateral value.
(ii) Shariah Non-Compliant Financial Asset other than Ordinary Shares and Preference Shares
Shariah non-compliant financial asset other than the ordinary shares and preference shares as stated in item (2)(i)(a) and (b) above may be accepted as collateral provided that the value of the collateral is limited to the Shariah compliant portion only. In this regard:
(a) The collateral value of the Shariah non-compliant financial asset which is based on interest such as conventional fixed deposit certificate and conventional bond is limited to the principal amount of such instruments; and
(b) The collateral value of the Shariah non-compliant unit trust fund is limited to the initial investment and any additional investment by the investors.
The 217th Shariah Advisory Council Of The Securities Commission Malaysia Meeting (25 February 2019)
Shariah Screening Methodology for Listed Securities of a Stock Exchange Holding Company (SEHC)

Background
The Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) had, in series of its meetings, deliberated on the Shariah screening methodology for an SEHC. Under the law, the SEHC has the obligation to facilitate capital raising and trading activities which include services for the listing, trading, clearing, settlement and depository of both Shariah-compliant and Shariah non-compliant listed securities (Activities Beyond Control). The SEHC also offers its own products comprising Shariah compliant and Shariah non-compliant products to be listed and traded on the stock exchange as well as other services and activities (Activities Within Control).

Issue
In determining the Shariah status of the SEHC that involved in Activities Beyond Control and Activities Within Control, what is the most appropriate Shariah screening methodology to be applied.
Resolution
The SAC had resolved that due to the nature of the SEHC as a national exchange that undertakes Activities Beyond Control and Activities Within Control, a specific two-tier business activities benchmark would be applicable in determining its Shariah status as follows:
5% Benchmark
For Activities Within Control, the contribution from the Shariah non-compliant activities to the group revenue or group profit before taxation (PBT) must be less than 5%; and
33% Benchmark
For Activities Beyond Control, the contribution from the Shariah non-compliant activities to the group revenue or group PBT must be less than 33%.
The financial ratio benchmark will continue to be applicable to the SEHC.
The 210th Shariah Advisory Council Of The Securities Commission Malaysia Meeting (26 July 2018)
Payment of Debt in the Investment Currency by Using the Alternate Currency Based on the Currency Exchange Rate that is Determined in the Wa`d Arrangement

Background
The Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) has, at its 210th meeting held on 26 July 2018, discussed on an issue arising from the Islamic Dual Currency Investment (IDCI) which is based on the principle of murabahah (via tawarruq arrangement) where the payment of debt in the investment currency (Investment Currency) is made in the selected alternate currency (Alternate Currency) based on the currency exchange rate that is determined in the wa`d (unilateral promise) arrangement.

In the IDCI structure, the investor gives wa`d to the bank where the investor agrees to receive the murabahah sale price in the Alternate Currency on the maturity date of the IDCI based on the exchange rate which was agreed in the wa`d arrangement. In the event that the Investment Currency is stronger than the Alternate Currency, the bank shall exercise the wa`d and consequently, bai` al-sarf (currency exchange) will be executed. The investor will receive the murabahah sale price from the bank in the Alternate Currency based on the exchange rate which was agreed in the wa`d arrangement.

Issue
The Shariah issue which was discussed by the SAC is related to the payment of the murabahah sale price in the Alternate Currency through the execution of bai` al-sarf on the maturity date of the IDCI, based on the exchange rate which was agreed in the wa`d arrangement.

Resolution
The SAC had resolved as follows:

(A) Wa`d for the Execution of Bai` Al-Sarf that is Not Associated with Indebtedness
If wa`d for the execution of bai` al sarf is not associated with indebtedness, the determination of the currency exchange rate may be agreed in the wa`d arrangement by the parties involved based on:

(i) any exchange rate which was agreed in the wa`d arrangement; or
(ii) the prevailing currency exchange rate.

The agreed currency exchange rate may be applied when bai` al-sarf is executed.

(B) Wa`d for the Execution of Bai` Al-Sarf that is Associated with Indebtedness
(1) Determination of the Currency Exchange Rate on the Debt Payment Date
Payment of debt in the Alternate Currency through the execution of bai` al-sarf on the debt payment date is permissible, subject to the following conditions:

(i) The currency exchange rate shall be based on the prevailing currency exchange rate or any rate agreed upon by the parties involved, on the debt payment date; and
(ii) The debt that has been identified for payment in the Alternate Currency shall be fully paid on spot basis on the debt payment date.
(2) Determination of the Currency Exchange Rate at a Pre-Agreed Exchange Rate in the Wa`d Arrangement
Payment of debt in the Alternate Currency through the execution of bai` al-sarf on the debt payment date based on the exchange rate which was agreed in the wa`d arrangement is not permissible unless the following requirements are fulfilled:

(i) The debt in the Investment Currency must be fully paid in the same currency on the specified date; and
(ii) The conversion of the Investment Currency into the Alternate Currency shall only occur on the day of the execution of bai` al-sarf based on the exchange rate which was agreed in the wa`d arrangement, upon the full payment of the debt in the Investment Currency.

Wa`d for the currency exchange that is provided by the promisor shall only be for the purpose of the execution of bai` al-sarf.
The 203rd Shariah Advisory Council Of The Securities Commission Malaysia Meeting (14 December 2017)
Early Redemption Charges
Background
The Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) has, at its 203rd meeting held on 14 December 2017, discussed on the issue of imposing early settlement charges pursuant to early redemption in the context of Islamic capital market (ICM) particularly in sukuk issuance/structuring based on `uqud mu`awadhat (contracts of exchange).

Issue
The issue in deliberation was on the permissibility of imposing early settlement charges in the form of additional amount that may be considered as redemption premium pursuant to early redemption.

Resolution
The SAC has resolved that the sukukholders may impose early settlement charges pursuant to early redemption up to the unearned profit within the deferred sale price subject to mutual agreement.
Inter-Company Advances of Sukuk Proceeds
Background
The Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) has, at its 203rd meeting held on 14 December 2017, discussed on the issue of the proceeds raised from any issuance of sukuk that will be advanced to parent company and/or its subsidiaries or other party as inter-company advances.

Issue
The issue in deliberation was on whether inter-company advances of sukuk proceeds from the issuer to parent company, its subsidiaries, group of companies or other parties may be undertaken either through Shariah-compliant mode of financing or conventional loan with interest.

Resolution
The SAC has resolved that inter-company advances of sukuk proceeds from the issuer to the parent company, its subsidiaries, group of companies or other parties should be executed via Shariah-compliant mechanism only.
The 193rd Shariah Advisory Council Of The Securities Commission Malaysia Meeting (19 January 2017)
Background
The Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) has, at its 193rd meeting held on 19 January 2017, discussed the status of preference shares whose underlying shares are classified as Shariah-compliant securities. Whilst deliberating the issue, the SAC took note of its existing resolution on the permissibility of basic preference shares which are non-cumulative based on tanazul, which was resolved in its 20th meeting held on 14 July 1999 (Existing Resolution on Preference Shares).

Issue
The issue in discussion was whether preference shares whose underlying shares are classified as Shariah compliant would also be classified as Shariah-compliant securities.

Resolution
The SAC has resolved that preference shares are classified as Shariah-compliant securities provided that:
The underlying shares are classified as Shariah-compliant securities; and
The preference shares are non-cumulative in accordance with the Existing Resolution on Preference Shares.
The 192nd Shariah Advisory Council Of The Securities Commission Malaysia Meeting (15 December 2016)
Background
The Shariah Advisory Council of the Securities Commission Malaysia (the SAC) had, in a series of its meetings, deliberated on several issues in relation to qalb al-dayn and its application in sukuk restructuring. The SAC had, at its 192nd meeting held on 15th December 2016, resolved on the permissibility of qalb al-dayn subject to certain conditions. In general, the term qalb al-dayn refers to the conversion of an existing debt into a new debt such as in the following situations:
Restructuring of debt/amount payable via an extension of the payment period which results in an increase of the original amount payable without terminating the existing contract; or
Restructuring of debt/amount payable via termination of the existing contract and entering into a new contract with a new amount payable and an extended payment period.
Issue
The issue in deliberation was on the permissibility of qalb al-dayn in sukuk restructuring.

Resolution
The SAC had resolved that qalb al-dayn is permissible subject to the following conditions:
Execution of a new contract where it creates a new payment obligation and a revised payment period;
Proceeds from the new contract may be used to pay the initial outstanding debt which consequently results in the termination of the existing contract; and The debtor is categorized as musir (solvent) as determined by the sukuk trustee or sukukholders.

The 190th Shariah Advisory Council Of The Securities Commission Malaysia Meeting (27 October 2016)

UTILISATION OF SUKUK PROCEEDS

Background
The Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) has, at its 190th meeting held on 27 October 2016, discussed on utilisation of sukuk proceeds from any issuance of sukuk based on various Shariah principles for various purposes.

Issue
The issue in discussion was whether the utilization of sukuk proceeds raised from any issuance of sukuk based on various Shariah principles for various specified purposes is considered as Shariah-compliant

Resolution
The SAC has resolved that as a general ruling, the proceeds raised from any issuance of sukuk must be utilised for Shariah compliant purposes only. The SAC has further resolved that utilisation of the sukuk proceeds for the following purposes are Shariah compliant:

1) Refinancing of Conventional Borrowings

The sukuk proceeds may be utilised to refinance (wholly or partly) conventional borrowings.

2) General Business
The sukuk proceeds may be utilised for general business of the issuer including for general corporate purposes, working capital requirements and capital expenditures provided that the principal activities of the issuer are Shariah compliant based on the following business activity benchmarks (Benchmarks):

5% in respect of businesses/activities as specified in Appendix 1; or
20% in respect of businesses/activities as specified in Appendix 2

3) Construction of Building Consisting of Shariah Compliant and Shariah Non-Compliant Activities (Building with Mixed Activities)
The sukuk proceeds may be utilised for construction of the Building with Mixed Activities provided that the floor area to be used for the Shariah non-compliant activities is less than 49% of the total floor area.If the construction involves Building with Mixed Activities as well as building with fully Shariah-compliant activities, the denominator for computing the 49% benchmark shall be based on the total floor area of the Building with Mixed Activities only.

4) Refurbishment, Expansion, Repair and/or Maintenance of the Building with Mixed Activities
The sukuk proceeds may be utilised for refurbishment, expansion, repair and/or maintenance of the Building with Mixed Activities subject to the following conditions:

If the revenue received from the Shariah non-compliant activities in the Building with Mixed Activities could be determined, the said revenue computed against the total revenue from the Building with Mixed Activities must be less than the following Benchmarks:

5% in respect of businesses/activities as specified in Appendix 1; or
20% in respect of businesses/activities as specified in Appendix 2; or

5) Operation and Management of the Building with Mixed Activities
The sukuk proceeds may be utilised for the operation and management of the Building with Mixed Activities by the issuer provided that the revenue received from the Shariah non-compliant activities in the said Building with Mixed Activities, computed against the total revenue from the Building with Mixed Activities must be less than the following Benchmarks:

5% in respect of businesses/activities as specified in Appendix 1; or
20% in respect of businesses/activities as specified in Appendix 2.

6) Acquisition of the Building with Mixed Activities

The sukuk proceeds may be utilised for acquisition of the Building with Mixed Activities provided that the revenue received from the Shariah non-compliant activities in the said Building with Mixed Activities to be acquired by the issuer, computed against the total revenue from the Building with Mixed Activities must be less than the following Benchmarks:

5% in respect of businesses/activities as specified in Appendix 1; or
20% in respect of businesses/activities as specified in Appendix 2.

The Benchmarks as specified above are only applicable at the point of issuance of the sukuk.

Appendix 1
Conventional banking; Conventional insurance; Gambling; Liquor and liquor-related activities; Pork and pork-related activities; Non-halal food and beverages; Shariah non-compliant entertainment; Tobacco and tobacco-related activities; and Other activities deemed non-compliant according to Shariah as determined by the SAC of SC.

Appendix 2
Share trading; Stockbroking business; Rental received from Shariah non-compliant activities; and Other activities deemed non-compliant according to Shariah as determined by the SAC of SC.

The 188th Shariah Advisory Council Of The Securities Commission Malaysia Meeting (25 August 2016)
1) PURIFICATION OF TAINTED INCOME BY INVESTORS
Background
The Shariah Advisory Council (the SAC) of the Securities Commission Malaysia has, at its 188th meeting held on 25th August 2016, deliberated on a proposal by the industry pertaining to the purification of dividends received and excess capital gained from the disposal of Shariah non-compliant securities after the date of announcement, as well as capital gained and dividends received from the disposal of Shariah non-compliant securities which were mistakenly invested (“Tainted Income”) to be undertaken by the investors.

Issue
The issue under deliberation was related to the permissibility of the purification of the Tainted Income to be undertaken by investors of the Islamic funds themselves instead of the fund manager of the Islamic funds.

Resolution
After due deliberation, the SAC has resolved that it had no objection to the proposal for the purification of the Tainted Income to be undertaken by the investors subject to the following conditions:
Upon receipt of the Tainted Income, the fund manager shall deposit the Tainted Income into a separate account which is segregated from the account of the Islamic fund;
The fund manager shall distribute the Tainted Income to the investors as soon as practically possible which shall be advised by the Shariah adviser of the Islamic fund;
The fund manager shall inform/notify the investors of their obligations to purify the Tainted Income in accordance with Shariah principles upon distribution of the Tainted Income to the investors; and
The processes and procedures for the purification of the Tainted Income by the investors shall be clearly disclosed in the prospectus/offering document.
The SAC also resolved that it had no objection for the fund manager to utilise a portion of the Tainted Income to pay all cost associated with the distribution of the Tainted Income.

2) COLLATERAL FOR ISLAMIC SHARE MARGIN FINANCING
Background
The Shariah Advisory Council (the SAC) of the Securities Commission Malaysia has, at its 188th meeting held on 25 August 2016, deliberated on an enquiry from the industry in relation to collateral for Islamic share margin financing (SMF) for Islamic stockbroking services.

The current practice by Islamic Participating Organisations (POs) is to accept only Shariah-compliant securities as collateral for SMF. However, when such securities are subsequently reclassified as Shariah non-compliant securities (SNCS) by the Council in its bi-annual review, the Islamic POs would automatically exclude such securities as collateral resulting in margin call and/or forced selling of such securities.

Issues
The issue under deliberation was on the permissibility for the Islamic POs to maintain Shariah-compliant securities, which have been reclassified to SNCS, as collaterals for Islamic SMF.

Resolution
After due deliberation, the SAC has resolved that it is permissible for the Islamic POs to maintain Shariah-compliant securities, which have been reclassified to SNCS, as collaterals until the end of the Islamic SMF tenure.
The 187th Shariah Advisory Council Of The Securities Commission Malaysia Meeting (28 July 2016)
Background
The Shariah Advisory Council (the SAC) of the Securities Commission Malaysia has, at its 187th meeting held on 28 July 2016, deliberated on an enquiry from the industry relating to the applicability of the new SAC ruling on bai` `inah which was resolved at the 157th SAC meeting held on 27 February 2014 (New Bai` `Inah Ruling).

Issue
The issues under deliberation were related to the applicability of the New Bai` `Inah Ruling which took effect on 1 October 2014 in respect of the following:
revision to terms of sukuk that had been issued based on previous SAC ruling on bai` `inah which was resolved at the 5th SAC meeting held on 29 January 1997 (Previous Bai` `Inah Ruling); and
upsizing the limit of an existing sukuk programme.
Resolution
After due deliberation, the SAC has resolved that the implementation of the New Bai` `Inah Ruling is as follows:
For sukuk proposals submitted on or after 1 October 2014, the New Bai` `Inah Ruling shall apply;
For revision to the terms of sukuk which was issued based on the Previous Bai` `Inah Ruling and the revision is not considered as a new submission pursuant to the requirements under the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework and the Guidelines on Issuance of Private Debt Securities and Sukuk to Retail Investors, the New Bai` `Inah Ruling shall not apply; and
For upsizing the limit of an existing sukuk programme which was issued based on the Previous Bai` `Inah Ruling:
if there is provision for upsizing in the Principal Terms and Conditions (PTC)/Details of the Sukuk Facility, the New Bai` `Inah Ruling shall not apply even though the proposal for upsizing is considered as a new submission pursuant to the requirements under the Guidelines on Unlisted Capital Market Products under the Lodge and Launch Framework and the Guidelines on Issuance of Private Debt Securities and Sukuk to Retail Investors; and
if there is no provision for upsizing of the programme limit in the PTC/Details of the Sukuk Facility, the New Bai` `Inah Ruling shall apply to the proposal for upsizing.
The 184th Shariah Advisory Council Of The Securities Commission Malaysia Meeting (28 April 2016)

Background
The Shariah Advisory Council (SAC) of the Securities Commission Malaysia (SC) has, at its 184th meeting held on 28 April 2016, discussed on the issue of Shariah non-compliant activities for companies with hotel and resort operations under the Shariah screening methodology.

Issue
The issue in discussion was on the applicability of the 20-per cent benchmark for contributions from hotel and resort operations under the Shariah screening methodology

Resolution
The SAC has resolved that the 20-per cent benchmark on hotel and resort operations under the business activity benchmarks in the Shariah screening methodology is no longer applicable since the main purpose of hotel and resort operations was to provide accommodation.

Notwithstanding the above, other benchmarks in relation to other Shariah non-compliant activities under the business activity benchmarks in the Shariah screening methodology remain applicable for companies with hotel and resort operations.
The 183rd Shariah Advisory Council Of The Securities Commission Malaysia Meeting (31 March 2016)
Background
The Shariah Advisory Council of the Securities Commission Malaysia (the SAC) had, at its 183rd meeting held on 31 March 2016, deliberated on several issues in relation to wa`d (promise) and muwa`adah (bilateral promise).

Issue
The issues in deliberation were on the following:
Definition of wa`d;
Binding effect of wa`d;
Permissibility of wa`d mulzim;
Implication of breach of wa`d;
Definition of muwa`adah;
Binding effect of muwa`adah;
Permissibility of muwa`adah mulzimah; and
Implication of breach of muwa`adah.
Resolution
The SAC had resolved on wa`d and muwa`adah as follows:
1. Resolutions on Wa`d
Definition of Wa`d
Wa`d is a promise by a person or a party to perform certain task in the future.

Binding Effect of Wa`d
Wa`d is mulzim (unilaterally binding) on the promisor if the wa`d is attached to any of the following:
A particular action which is done by a party including the promisee in the future;
A particular time or date; or
A particular situation which will occur in the future. The bindingness of wa`d shall take effect at the time when the wa`d is expressed.

Permissibility of Wa`d Mulzim
Wa`d mulzim is permissible based on the view of fuqaha’ that wa`d which is attached to conditions is binding. The types of conditions include a particular action, date/time and situation.
This ruling may clarify the types and categories of conditions attached to wa`d that lead to the binding effect of wa`d, especially in the financial instruments that involve promise to enter into contract that is attached to a particular date/time in the future.
Implication of breach of Wa`d
The promisor who breaches his wa`d is liable to pay ta`widh (compensation) based on actual loss suffered (if any) by the aggrieved promisee due to the breach of the wa`d.
2. Resolutions on Muwa`adah
Definition of Muwa`adah
Muwa`adah is a bilateral promise between two persons or two parties to enter into a contract in the future.
Binding Effect of Muwa`adah
Muwa`adah is mulzimah (bilaterally binding) on the promisors if the muwa`adah is attached to any of the following:
A particular action which is done by a party including the promisee in the future;
A particular time or date; or
A particular situation which will occur in the future.
The bindingness of muwa`adah shall take effect at the time when the muwa`adah is expressed.

Permissibility of Muwa`adah Mulzimah
Muwa`adah mulzimah is permissible because muwa`adah is merely a promise and does not tantamount to a contract. Since the contract is yet to be entered into, it does not have the effect of a contract. For example, when muwa`adah is expressed in relation to sale and purchase contract, there is no requirement of delivery of the counter values between the respective promisors because the contract will only be entered into at a time which have been agreed in the future in the muwa`adah arrangement.

Implication of breach of Muwa`adah
The promisor who breaches his promise in the muwa`adah is liable to pay ta`widh (compensation) based on actual loss suffered (if any) by the aggrieved promisee due to the breach of the promise.