Abdullah, Mohamad Asmadi and Arifin, Mahamad and Omar, Muhammad Naim and Mohd Napiah, Mohammad Deen
(2012)
Is a Nominee a Trustee or a Beneficiary? A Study on the Islamic Legal Maxim “In Contracts Effect is Given to Intention and Meaning and not Words and Forms” and Its
Relevance to the Nomination Concept and Practice in the Administration of a Muslim’s Estate in Malaysia.
Australian Journal of Basic and Applied Sciences, 6 (11).
pp. 153-159.
ISSN 1991-8178
Abstract
In a sale transaction, parties to the contract are allowed to pronounce an offer using words
which do not indicate a sale. He may use the word such as hibah in the offer as long as the nature of
the contract is exchange. Nomination is a means to expedite the process of the administration of a
deceased Muslim’s estate. It is commonly practiced in financial institutions such as insurance and
takaful companies, Pilgrimage Fund and Employee Provident Fund. An issue arises as regard to the
status of nominee, as a trustee or beneficiary. A fatwawas issued by the National Fatwa Committee in
1973 stating that a nominee acts only as a trustee. However, the decisions of the civil courts and the
Shari`ah court show that a nominee could be a beneficiary. This research is undertaken to examine the
Islamic legal maxim and its relevance to the principle of nomination in Malaysia. Here, even though it
is a nomination form and the nominee appointed is merely a trustee according to the 1972 fatwa, the
wordings of the nomination might indicate a different connotation.
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