Case Study: The Shariat Appellate Bench of Pakistan and the Review of the Federal Shariat Court’s Riba Decision

In 1992, the Pakistani Federal Shariat Court (FSC) declared riba[1] un-Islamic.[2] The Shariat Appellate Bench (SAB I) of the Pakistani Supreme Court upheld this decision in 1999,[3] and stated that the government had roughly three years to bring its economic policies in line with Islamic law by eliminating all forms of interest-based banking.[4] In 2000, United Bank Limited (UBL), sponsored by the government,[5] filed a review petition to the SAB urging it to overturn its original 1999 holding.[6] In this commentary, I analyze the various arguments put forth by the petitioners and the appellate powers of the SAB. The SAB’s judgment indicates that the court is sensitive to jurisdictional arguments, and I argue that this is so because FSC jurisdictional issues remain largely unsettled by precedent and hence are a fertile ground of contestation between petitioners and the courts.

The petitioners made two types of arguments: those taking issue with the court’s definition of riba and those attacking the court’s jurisdiction to hear the case. Generally, arguments of the first category fault the FSC for not undertaking a nuanced linguistic analysis of the term “riba.” For example, `petitioners argued that SAB I did not properly distinguish “usury,” “riba,” and “interest.”[7] Further, they argued that only that which is “doubled and multiplied” is prohibited, whereas present-day banking in Pakistan is covered by the term bay’ (which refers to lawful sale, business, or trade).[8] In a third argument, petitioners contended that the FSC did not broach the topic of riba al-fadl (usury of surplus), which, unlike riba al-nasiyah (usury of delayed (re)payment), is not prohibited.[9]

As for the second category, petitioners attacked the Court’s jurisdiction on three different bases. The first argument states that the FSC acted beyond its jurisdiction because, according to Article 38(f)[10] of the Constitution, only the Government has the power to regulate riba.[11] The second jurisdictional argument faulted both the FSC and SAB for not examining the FSC’s jurisdiction under the relevant articles[12] of the Constitution.[13] The FSC simply asserted its jurisdiction on the grounds that the 1956 Pakistan Constitution required the government to endeavor to eliminate riba as soon as possible, and the government’s failure to act forced the court to step in.[14] The SAB agreed, affirming that on initial review it did not “examine all the jurisdictional aspects of the case.”[15] The final attack on the SAB’s jurisdiction faulted it for “amalgamat[ing] legal and moral aspects of Riba,” and that doing so somehow[16] took the FSC’s judgment outside the jurisdiction of the SAB because it violated the injunctions of Islam.

Ultimately, the petitioners prevailed and the Court overruled previous judgments outlawing riba. It is unclear from the opinion which argument the Court found most persuasive. In its holding, the Court simply states that there were “errors floating on the surface of the record” of the FSC and SAB I judgments, and that the issues required further “thorough and elaborate research and comparative study of the financial systems” of other Muslim-majority countries.[17]

A great portion of the judgment consists of claims against the FSC and SAB I courts’ jurisdiction. The SAB is sensitive to these claims, especially when it comes to revising its own jurisdiction. It is unclear why petitioners would rely so heavily on jurisdictional arguments. With regard to the first two such arguments, it may be because jurisdictional arguments are relatively easy to make when it comes to the separation of powers issue. Based on the constitutional text, there is not a clear demarcation between the legislature and judiciary’s respective roles in establishing a riba-free financial system. Furthermore, the SAB does not articulate the standard by which it would review the legislature’s action (or inaction) on this matter.

With regard to the third jurisdictional argument, the term “injunctions of Islam” used in the Constitution is similarly nebulous and not clearly defined, which means that petitioners could make the general claim that the FSC’s failure to consider certain (supposedly permissible) aspects of riba violate an injunction of Islam. Interestingly, just as the FSC relies on creatively interpreting certain terms (i.e. hudood and “injunctions of Islam) in order to expand its jurisdiction (see my first and second commentaries), petitioners used these very same arguments to do the exact opposite. Petitioners’ third jurisdictional argument asserted that the FSC lacked jurisdiction because it collapsed the legal and moral aspects of riba. However, in the Prison Laws case of 2009 <link to Commentary 2>, the FSC broadened the definition of “injunction of Islam” to include both the “letter and the spirit” of the law. This broader interpretation allowed it to expand its own jurisdiction. There seems to be an awareness by both petitioners and the FSC and SAB that jurisdiction is a malleable and fluid concept. Hence, it seems to be a primary site of legal contestation between the two groups.

Petitioners advanced two further arguments that, while not fitting into the definitional or jurisdictional categories, nonetheless alert us to the composition of the SAB and how it situates itself within the other similar courts in Muslim majority countries. One petitioner accused the court of judicial bias, stemming from the fact that the judge who delivered the opinion of the FSC relied on a report from the Council of Islamic Ideology[18] of which he was concurrently Chairman. The SAB relied on the same report when rendering its appellate decision. Another petitioner argues that the views of eminent Egyptian Islamic law scholars—such as Rashid Rida and Muhammad Abduh—had been misread.[19] This statement is interesting because, in its order for remand, the SAB directs the FSC to undertake “thorough and elaborate research and comparative study of the financial systems which are prevalent in the contemporary Muslim countries.”[20] Such references show that the Pakistani courts are consciously learning from other jurisdictions facing similar challenges in implementing Islamic law.

Just as the FSC is sensitive to jurisdictional arguments, so too is the SAB sensitive to similar arguments. This prevalence of jurisdictional arguments in both courts indicates that the constitutional provisions relating to jurisdiction that govern the FSC and the SAB are unsettled and are subject to frequent expansion and constriction.



[1] Roughly translated as “usury” or “excessive interest” and often confused with simple interest. More specifically, riba refers to unjust or exploitive gains made in trade or business. See generally Mahmoud A. El-Gamal, “Overview of Islamic Finance.” U. S. Department of Treasury, Office of International Affairs, Occasional Paper Series #4. Available at The following are some prominent Quranic verses that reference riba: 2:275-280; 3:130; 4:161; 30:39.

[2] United Bank Ltd. v. Messrs Farooq Brothers, 2002 PLD 800 (Pak.).

[3] The Shariat Appellate Bench was exercising appellate jurisdiction under Article 203(F) of the Constitution. Only the SAB has jurisdiction to review judgments issued by the FSC.

[4] For clarifying purposes, I have labeled the first SAB judgment “SAB I” and the UBL judgment that this commentary is analyzing “SAB.”

[5] It is unclear what it means for the government to “sponsor” a petition. Judging from the case, it seems like the government was a co-petitioner along with UBL.

[6] The Civil Shariat Review Petition was filed under Article 188 of the Constitution, which states: “The Supreme Court shall have power, subject to the provisions of any Act of Majlis-e-Shoora (Parliament) and of any rules made by the Supreme Court, to review any judgment pronounced or any order made by it.” Pak. Const. art. 188, sec. II. Although it is not clear what action may trigger a review by the Supreme Court of one of its previous decisions, it seems like the filing of a petition by an interested party (as occurred in this case) suffices. Unlike the United States, Pakistan does not require a case or controversy to be present before the Supreme Court can review a case.

[7] United Bank Ltd. v. Messrs Farooq Brothers, 2002 PLD 800, 9 (Pak.).

[8] Id.

[9] Id. at 16. The Court does not define either of the terms is defined, but specifies that it deems riba al-nasiyah to be prohibited.

[10] Pak. Const. art. 38(f), sec. II (“Promotion of social and economic well-being of the people- The State shall…eliminate riba as early as possible.”)

[11] 10.

[12] Pak. Const. art. 29, sec. II (adherence by each branch to the “principles of policy”); Id. at 30(2) (a law cannot be called into questions simply because it is not in accordance with the “principles of policy”); Id. at 38(f) (the state shall eliminate riba as early as possible); Id. at 81(c) (outlining provisions dealing with the federal expenditure); 121(c) (outlining provisions dealing with the provincial expenditure).

[13] 2002 PLD 800 at 17-18.

[14] Id. at 18 (citing the FSC judgment).

[15] Id. at 18.

[16] Petitioner does not explain why or how the amalgamation has taken the ruling out of the SAB’s jurisdiction, and neither does the Court. United Bank Ltd., 2002 PLD 800 at 12.

[17] Id. at 23.

[18] The Council for Islamic Ideology (CII) is a constitutional body responsible for giving legal advice on issues implicating Islam to the government and the Parliament. It is established in Articles 228-231 of the Constitution. Its functions include: (a) to make recommendations to Majlis-e-Shoora (Parliament) and the Provincial Assemblies as to the ways and means of enabling and encouraging the Muslims of Pakistan to order their lives individually and collectively in all respects in accordance with the principles and concepts of Islam as enunciated in the Holy Quran and Sunnah; (b) to advise a House, a Provincial Assembly, the President or a Governor on any question referred to the Council as to whether a proposed law is or is not repugnant to the Injunctions of Islam; (c) to make recommendations as to the measures for bringing existing laws into conformity with the Injunctions of Islam and the stages by which such measures should be brought into effect; and (d) to compile in a suitable form, for the guidance of Majlis-e-Shoora (Parliament) and the Provincial Assemblies, such Injunctions of Islam as can be given legislative effect. Pak. Const. art. 230, sec. IX.

[19] United Bank Ltd., 2002 PLD 800 at 13. It is interesting to note that the petitioners cite past Egyptian scholars as opposed to contemporary Pakistani ones. It is unclear from the opinion why they do so.

[20] Id. at 23.

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