The role of legal doctrine in the decline of the Islamic waqf: a comparison with the trust.

• Author: Schoenblum, Jeffrey A.
• Position: Inheritance system - Symposium: The International Trust, part 2

1. INTRODUCTION

   An intriguing question related to this symposium's focus on the international trust is whether other legal systems have developed similar legal constructs to facilitate the intergenerational management of family wealth. In this regard, there are a number of methods for accomplishing these goals in the European civil law system.(1) However, they are not nearly as efficient as the trust. Not surprisingly, then, the trust is making enormous inroads, as the civil law is reworked domestically and by international convention to allow for trust or quasi-trust arrangements.(2)

   The trust has had no such success with respect to another system of law--Islam. Legal historians have long recognized that the origins of the trust may actually be traceable to an Islamic legal construct, the waqf.(3) However, whereas the trust has expanded its domain in the modern economy, the waqf has experienced a precipitous decline throughout the Islamic world. To some degree, this has been attributable to factors that point less to inefficiencies with respect to waqf legal doctrine itself than to consolidation of power by political movements intent on gaining control of private capital.(4) To a large degree, however, it is ascribable to the legal doctrine associated with the waqf.

   The starting point of this article is that the same impulses present in societies with Western legal systems to manage family wealth over time have been present in Islamic societies as well.(5) But unlike other legal regimes regulating such impulses, waqf law has been largely unresponsive, especially in light of changing typologies of wealth and socio-economic conditions. A number of factors explain the failure of legal doctrine to respond. The first of these is the religious or divine grounding of waqf law,(6) making it difficult for the law to evolve in a responsive and uncontroversial manner, one that does not represent a threat to the fundamental structure of Islamic law itself. Second, the related social norms observed by constituents of Islamic societies have deterred individuals from aggressively planning in ways that contradict "divine" precepts of the law.(7) Furthermore, these norms have fostered an ethos of not taking seriously alternatives to the rules of inheritance. A third consideration has been the statutory response to the problem.(8) Legislative reforms in countries with sizeable Muslim populations have differed strikingly from the legislative reforms with respect to trusts. Trust legislation has progressively eliminated many of the significant impediments to its more efficient, worldwide use. Legislation addressing the waqf has tended more to its overregulation or outright prohibition, sometimes accompanied by expropriation of property currently held in existing waqfs.

   The origins of waqf legal doctrine may, in fact, be divine, or no more than the outgrowth of certain practical accommodations made and then concretized more than a thousand years ago. In either event, detailed operational rules exist just as in the case of trust law.(9) These more detailed operational rules of waqf law have had a particularly destructive impact on the waqfs utility as a family wealth management tool in Islamic societies.

   The foregoing is not intended to suggest that ad hoc accommodations have not been made to allow long-standing waqfs to cope with altered social, political, and economic conditions. In numerous instances and at various times in history this has occurred. However, occasional or even recurrent accommodations do not augur well for widespread resort to an outdated legal construct. By way of contrast, trust law has effectively and formally responded to meet changed circumstances.

   There have been various explications of the detailed rule regime of the waqf. However, there has not been a concerted attempt to demonstrate how the legal doctrine, along with the process of enforcement, have played instrumental roles in the downfall of the waqf. The premise of this article is that doctrine matters, and this is true in all legal systems. While ad hoc adjustments can sustain the system for some time, it must ultimately falter when it can no longer efficiently serve the interests of the consumers. This is not the case, however, where the legal process itself permits adaptation in response to inevitably changing conditions and needs.

2. A BRIEF INTRODUCTION TO ISLAMIC LAW AND THE WAQF

   The waqf has its source in the shari`a, or religious law of Islam.(10) Islam is generally divided between the Sunni and Shiite traditions. With regard to the Sunnis, there are four prominent schools of jurisprudence.(11) The prevalence of one school or another in a particular geographic area contributes to somewhat different approaches depending on whether the relevant jurisdiction is Sudan or Africa west of Egypt,(12) Saudi Arabia,(13) part of Central Asia,(14) or within a band stretching from Egypt and East Africa through parts of the Persian Gulf area and on to southern Asia.(15) In addition, various schools in Iran and Iraq of the Shiite tradition have developed their own coherent systems of law.(16)

   Although the Qur'an does not directly mention the institution of waqf,(17) the significance it attained is exemplified by the fact that at the time of the dissolution of the Ottoman Empire three-quarters of the land and buildings in Turkey were waqf properties.(18) The genesis of this powerful institution can be traced back to the Prophet Mohammed, who apparently directed a caliph, Farouk Omar ibn al-Khattab, to make his property inalienable so that the income could forever be distributed for charity.(19)

   This philanthropic foundation of the waqf is an important one and helps explain the institution's role through the centuries as a means of disposing of property for what would be perceived in the common law as "charitable purposes." But a family waqf concept also developed. Providing for family members was deemed a worthy purpose.(20) The family waqf, commonly known as waqf ahli, or waqf dhurri, is the principal focus of this article.(21)

   The actual creation of the waqf, superficially, does indeed resemble that of the trust. The settlor, or wakif, typically transfers property to the analogue of the trustee, the mutawalli.(22) Not uncommonly, the waqf instrument will name the mutawalli and provide for successors, just as in the case of a trust.(23) If no such provision is made, either the wakif or the supervisory judge, the qadi,(24) may appoint a successor. If no mutawalli is originally appointed, the waqf may fail altogether. This would certainly seem to be the case in much of the Islamic world, though not everywhere.(25) Interestingly, Shiite jurists have upheld the validity of the waqf under these circumstances, but have considered the beneficiaries to have become the mutawallis.(26) The mutawalli generally has power to administer the property held in waqf, although only upon the express approval of the court or the creating instrument may he actually sell the property. If sold, the proceeds may have to be reinvested in like-kind property.(27)

   From a family wealth management and distribution standpoint, the waqf's role is comparable to that of certain trusts--restrictions otherwise imposed by the law of inheritance are bypassed and a structure for intergenerational administration is established. Thus, apart from the waqf, the testator is required under Islamic inheritance law to leave various heirs, including distant relatives, specified percentages of his wealth. The decedent usually is left with one-third of the estate to devise, but he cannot increase the share of one heir without the consent of the other heirs. This rule of the shari`a may prevent a man from adequately providing for the needs of his immediate family.(28)

   When attempts were made to bypass the restrictive succession laws through the use of a family waqf, Islamic jurisprudence approved of it, so long as the ultimate beneficiary was a religious, pious, or charitable purpose.(29) The waqf, therefore, affords a means of avoiding the undesirable division of property resulting from application of the succession laws, which tends to produce inefficient fractionation of family wealth in the Islamic world.(30)

3. THE WAQF VERSUS THE TRUST

   1. Fundamental Differences in the Sources and Evolution of the Law, Norms as to Utilization, and State Regulation

      There are certain fundamental differences between the waqf and the trust in terms of the sources and evolution of the law, norms as to utilization, and state regulation. These differences help explain the trust's success and the waqf's failure as a legal construct to keep apace of changing social and economic conditions.

      1. The Religious Versus Secular Foundations of the Two Legal Constructs

         While there have indeed been differences of interpretation and practice by various schools of Islam, fundamentally, the parameters within which the waqf may evolve are narrow. This is true despite radical social, financial, and technological change in the Islamic world as elsewhere.(31) The waqf derives from religious authority and furthers what are perceived to be religious, pious, and charitable goals.(32) As previously explained, the waqf is considered to have been authorized directly by the Prophet Mohammed.(33) This authorization extends to the family waqf.(34) While there are variations depending on the particular school of Islam, there has been little evolution in the law of waqf for more than a thousand years.(35) The fact is that the law of waqf is arguably "the most important branch of Muhammadan law, for it is `interwoven with the entire religious life and social economy' of Muslims."(36)

         As a result of the foregoing, the waqf had to remain a largely static construct for disposing and managing of wealth. As one leading commentator has noted: "In the case of waqf, there was, generally speaking, no evolution until the present time. It retained the...