What is the legal determination when a creditor authorizes another to collect a debt, and they later dispute whether the instruction constituted agency (Wakala) or assignment (Hawala)?
General Chapter
Al-Mughni
Book of Assignment (Transfer of Debt)
Primary text
When a dispute arises between the creditor (Muheel) and the authorized agent (Mautun Lah) regarding whether the instruction given was authorization for collection (Wakala) or assignment (Hawala), the ruling favors the claimant of agency (Wakala) upon their oath. This is because the claimant of Wakala asserts the continuation of the original legal status (the debt remains owed to the creditor), thereby denying a transfer, and the established principle supports the status quo. If either party possesses clear evidence (Bayyinah), it shall be accepted, as the dispute concerns the precise wording, which is subject to testimonial proof.
Supporting text
If the parties agree that the wording used was 'I have assigned your debt owed from Zayd to you' (Ahaltuka bidaynika 'indi Zayd), and then dispute whether it meant assignment or agency for collection, one view holds that the claimant of assignment (Hawala) prevails because the literal wording supports Hawala over Wakala, following the apparent meaning of the terms. The opposing view holds that the claimant of agency (Wakala) prevails because the underlying principle supports the creditor's right remaining against the original debtor (Al-Mahal 'Alayh), and the claimant of Hawala is attempting to transfer this right, which the creditor denies. If the agent has already collected the debt and it is subsequently destroyed while in their possession, liability is extinguished for all parties, regardless of negligence or not, as it results in mutual offset or the loss of the agent's own presumed right.