FRAMEWORK FOR SHARIAH-COMPLIANT FINANCIAL REMEDIES FOR LATE INTERIM PAYMENT FOR CONSTRUCTION WORKS

Video

Abstract

Payment default is perennial in the construction industry. Under Malaysian law, an employer’s failure to make a timely interim payment towards its contractor as agreed in the construction works contracts gives the contractor the right to claim for interest on the delayed interim payment amount. Unfortunately, the striking resemblance of riba’ within this practice is deemed not in compliance with the Shari’ah. In addition, several other conventional principles and practices within the construction works’ contractual provisions and the Malaysian law contradict the teachings of the Al-Quran and the As-Sunnah. Therefore, the Framework for Shariah Compliant Financial Remedies for Late Interim Payment for Construction Works was developed. This framework aims to harmonise the current practices and provisions of late interim payment charges for construction works with the Shari’ah. The framework consists of three main phases: identification, assessment and evaluation and recovery of debt. This framework has great potential and capability to be implemented in Malaysia and globally. It will also serve to promote Shari’ah compliance for the betterment of the ummah.

Keywords: Shariah Compliant, Construction Works, Late Interim Payment

View Poster

Team Member

Result