Does the working partner (Amil) have the right of preemption (Shuf'ah) when a share in a joint ownership ('share') is sold from the capital used in a Mudarabah (profit-sharing) venture?

General Chapter

Al-Mughni

Book of Preemption (Shuf'ah)

Book 23 · Issue 1 · Bab 1

Open in Qurani

Primary text

The working partner (Amil) possesses the right of preemption over a share sold from the Mudarabah capital if the preemption benefits the venture (if there is 'حظ'—benefit—in it for the venture). If the Amil waives this right, the capital owner (Rabb al-Mal) may then exercise the right, because the Mudarabah capital remains the property of the Rabb al-Mal. The Amil's pardon or relinquishment of his right is not effective because the ownership belongs to another party. This applies similarly to someone granted permission (Ma'dhun lahu). If the scenario is reversed, and the Mudarabah partner purchased a share in a joint venture belonging to the Rabb al-Mal using Mudarabah funds, there are two established legal opinions regarding whether the Rabb al-Mal has the right of preemption, mirroring the established opinions on the Rabb al-Mal purchasing using the Mudarabah funds themselves. Furthermore, if the Mudarabah partner is acting as the pre-emptor, and there is no profit in the capital, the Amil may exercise the right of preemption because the ownership ultimately belongs to another party. If there is profit, and the ruling is that ownership of the profit does not materialize immediately upon emergence, the same rule applies. If the ruling is that ownership of the profit materializes immediately, there are two opinions concerning the Rabb al-Mal's right, similar to the established views regarding the Rabb al-Mal.

Supporting text

The established position of Imam al-Shafi'i regarding all these matters aligns with what has been stated. If the Mudarabah partner sells a share in the joint venture they hold, the partner himself does not have the right to take it back through preemption because he is suspected of acting self-interestedly, which resembles him purchasing from himself.