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THE CONCEPT
OF ISTIHSAN
AND ITS
APPLICATION IN
ISLAMIC
FINANCEA presentation by:
Nabil Bello
Tankertanker Design
Tankertanker Design
Tankertanker Design
Definition
• The term istihsan is derived from the root
word hasuna. Literally it means considering
something good and beautiful.
• It has been loosely translated into English as
Jusritic Preference (or Equity as according to
Hashim Kamali).
Tankertanker Design
Tankertanker Design
Tankertanker Design
Definition
• There are many technical meanings to Istihsan,
some of them are:
–Avoiding Qiyas for a stronger evidence from the
Qur’an, Sunnah or Ijma’
–Leaving Qiyas to a higher Qiyas which is more
evident
–Specifying (Takhsis) Qiyas for a stronger evidence
Tankertanker Design
Tankertanker Design
Tankertanker Design
Definition
• A more general definition given by Al-Ashqar
(2009) states that:
“A methodology whereby in some specific cases the
Mujtahid declines to use Nass, Qiyas or a general
rule but instead he uses another ruling to achieve
public interest, due to necessity, custom, hidden
Qiyas (Qiyas Khafiy) or other reasons that may
warrant that preference”
Tankertanker Design
Tankertanker Design
Tankertanker Design
Basis for Istihsan
• Istihsan must be based on an authority, if not
it will not be accepted. The basis are three:
–Nass: This refers to Qur’an and authentic
Hadith of the Prophet (SAWS).
–Ijma’
–Sound Maslaha (Maslahah mu’tabarah): A public
interest that is genuine and generally accepted
–Hidden Qiyas (Al-Qiyas al-Khafiy)
Tankertanker Design
Tankertanker Design
Tankertanker DesignExample: – Based on Nass
• Bai Salam: It is a sale of what is not in
existence. This falls under the category of Bai
al-Ma’adum, which is a form of Gharar that is
prohibited in sale. But salam has been allowed
based on the Hadith of the Prophet that
Tankertanker Design
Tankertanker Design
Tankertanker Design
Example: - Based on Ijma’
• Istisna’: This is a sale on what is not in
existence, it also falls under the category of
bai’ al-Ma’adum like in salam. It is considered
allowed due to the consensus of its
permissibility since from the period of the
Companions.
Tankertanker Design
Tankertanker Design
Tankertanker Design
Example: - Based on Maslahah
• Imposing a guarantee on losses and damages
caused by an trustee (amin). The general rule
in these types of contracts is that they are
based on trust, hence they are not supposed to
pay for losses or damages. As the Companions
observed that this causes a lot of damages they
preferred a guarantee to be imposed in such
cases.
Tankertanker Design
Tankertanker Design
Tankertanker Design
Example: - Based on Qiyas Khafi
• In the case of waqf, only clearly stated rights
in the contract are considered like in sale.
Other silent rights are not included. In this
case it is better to perform a Qiyas on Ijarah,
which allows the inclusion of unidentified
rights even if they are not clearly stated, like
right to use water, passage and right to flow
water.
Tankertanker Design
Tankertanker Design
Tankertanker Design
Controversies on Istihsan
• Abu Hanifa, Malik and Hambali scholars
permit the application of Istihsan but Shafi’i
did not allow. Shafi’i said: “Whoever
performs istihsan has enacted a new rule in
Islam.”
• Commentators say that he denies istihsan
based on pleasure seeking without any evidence
(dalil).
Tankertanker Design
Tankertanker Design
Tankertanker Design
Istihsan in Islamic finance
• In Islamic finance, it has been a very important
tool in many rulings.
• The concept of corporate business under
limited liability has been allowed under the
concept of istihsan.
• Also, the degree of tolerance of some
forbidden elements in mixed companies has
also been allowed based on istihsan.
Tankertanker Design
Tankertanker Design
Tankertanker Design
Conclusion
• Istihsan is a very important source of shariah
that treats the Islamic rulings with
consideration of inner and hidden social and
ethical issues. The methodology should be
made as a final resort. For instance, when we
mistakenly cut the left hand of a thief, we
should not cut the right hand again. This is to
bring ease to the people.
Tankertanker Design
Tankertanker Design
Tankertanker Design
• There is no istihsan where it clearly
contradicts an authority (dalil). That is why
the Malikiyya consider istihsan as a systematic
way of selecting a ruling were there are many
contradicting authorities (adilla) from either
the primary and secondary sources.
Thank you

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Istihsan presentation

  • 1. THE CONCEPT OF ISTIHSAN AND ITS APPLICATION IN ISLAMIC FINANCEA presentation by: Nabil Bello
  • 2. Tankertanker Design Tankertanker Design Tankertanker Design Definition • The term istihsan is derived from the root word hasuna. Literally it means considering something good and beautiful. • It has been loosely translated into English as Jusritic Preference (or Equity as according to Hashim Kamali).
  • 3. Tankertanker Design Tankertanker Design Tankertanker Design Definition • There are many technical meanings to Istihsan, some of them are: –Avoiding Qiyas for a stronger evidence from the Qur’an, Sunnah or Ijma’ –Leaving Qiyas to a higher Qiyas which is more evident –Specifying (Takhsis) Qiyas for a stronger evidence
  • 4. Tankertanker Design Tankertanker Design Tankertanker Design Definition • A more general definition given by Al-Ashqar (2009) states that: “A methodology whereby in some specific cases the Mujtahid declines to use Nass, Qiyas or a general rule but instead he uses another ruling to achieve public interest, due to necessity, custom, hidden Qiyas (Qiyas Khafiy) or other reasons that may warrant that preference”
  • 5. Tankertanker Design Tankertanker Design Tankertanker Design Basis for Istihsan • Istihsan must be based on an authority, if not it will not be accepted. The basis are three: –Nass: This refers to Qur’an and authentic Hadith of the Prophet (SAWS). –Ijma’ –Sound Maslaha (Maslahah mu’tabarah): A public interest that is genuine and generally accepted –Hidden Qiyas (Al-Qiyas al-Khafiy)
  • 6. Tankertanker Design Tankertanker Design Tankertanker DesignExample: – Based on Nass • Bai Salam: It is a sale of what is not in existence. This falls under the category of Bai al-Ma’adum, which is a form of Gharar that is prohibited in sale. But salam has been allowed based on the Hadith of the Prophet that
  • 7. Tankertanker Design Tankertanker Design Tankertanker Design Example: - Based on Ijma’ • Istisna’: This is a sale on what is not in existence, it also falls under the category of bai’ al-Ma’adum like in salam. It is considered allowed due to the consensus of its permissibility since from the period of the Companions.
  • 8. Tankertanker Design Tankertanker Design Tankertanker Design Example: - Based on Maslahah • Imposing a guarantee on losses and damages caused by an trustee (amin). The general rule in these types of contracts is that they are based on trust, hence they are not supposed to pay for losses or damages. As the Companions observed that this causes a lot of damages they preferred a guarantee to be imposed in such cases.
  • 9. Tankertanker Design Tankertanker Design Tankertanker Design Example: - Based on Qiyas Khafi • In the case of waqf, only clearly stated rights in the contract are considered like in sale. Other silent rights are not included. In this case it is better to perform a Qiyas on Ijarah, which allows the inclusion of unidentified rights even if they are not clearly stated, like right to use water, passage and right to flow water.
  • 10. Tankertanker Design Tankertanker Design Tankertanker Design Controversies on Istihsan • Abu Hanifa, Malik and Hambali scholars permit the application of Istihsan but Shafi’i did not allow. Shafi’i said: “Whoever performs istihsan has enacted a new rule in Islam.” • Commentators say that he denies istihsan based on pleasure seeking without any evidence (dalil).
  • 11. Tankertanker Design Tankertanker Design Tankertanker Design Istihsan in Islamic finance • In Islamic finance, it has been a very important tool in many rulings. • The concept of corporate business under limited liability has been allowed under the concept of istihsan. • Also, the degree of tolerance of some forbidden elements in mixed companies has also been allowed based on istihsan.
  • 12. Tankertanker Design Tankertanker Design Tankertanker Design Conclusion • Istihsan is a very important source of shariah that treats the Islamic rulings with consideration of inner and hidden social and ethical issues. The methodology should be made as a final resort. For instance, when we mistakenly cut the left hand of a thief, we should not cut the right hand again. This is to bring ease to the people.
  • 13. Tankertanker Design Tankertanker Design Tankertanker Design • There is no istihsan where it clearly contradicts an authority (dalil). That is why the Malikiyya consider istihsan as a systematic way of selecting a ruling were there are many contradicting authorities (adilla) from either the primary and secondary sources.