Sukuk Ijarah: To What Extent They Comply or Contradict the Ijarah Contract and Bay’ ‘Inah?

The purpose of this paper is to identify and compare the characteristics and rulings of ijarah contract, the contract of ‘inah and sukuk ijarah. the identification of their characteristics and rulings is a necessity to determine whether these contracts are similar to, or different from one another, and the extent of their compliance with the shariah. furthermore, if the characteristics of these contracts could be ascertained, the rulings could be extended to the actual contracts in practice. this study analyses the characteristics and rulings of ijarah and ‘inah contracts based on views of hanafis, malikis, shafi’is and hanbalis. the findings are then compared with the characteristics of sukuk ijarah as standardized by aaoifi. the analysis is also focused on the terms and conditions of senaidesaru express berhad (sdeb) as an example of sukuk ijarah practice. the result suggests that sukuk ijarah as defined by aaoifi has some differences from the original ijarah contract. sukuk ijarah also has a few characteristics of ijarah contract. to certain extent, sukuk ijarah has similarities with the ‘inah contract. this study suggests that the terms represented in a particular contract may not truly represent the real characteristics of an original shariah contract. a particular contract may contain characteristics belong to different form of contracts. it may even be undesirably similar to the characteristics of the controversial contract of ‘inah.