Is what the questioner did—terminating the Mudarabah and Inan partnerships and returning the money—correct and in accordance with the rulings of Islamic Sharia?

The resolution of dispute cases falls to the judicial authorities, due to their ability to hear the parties, understand the claims and evidence, and issue a verdict. As for the Mufti (definition), he only hears from one party and cannot issue an accurate ruling in such cases.

If a loss occurs in a legitimate Mudarabah (definition) (profit-sharing) due to the negligence or transgression of the Mudarib (investing partner), then he guarantees it. However, if it occurs without any transgression or negligence on his part, the loss is borne solely by the capital provider, and the Mudarib loses his effort. This ruling does not change even if the capital provider stipulates to the Mudarib that he should share in the loss, as this condition is invalid by the consensus of jurists, and the contract remains valid according to the majority.

Al-Khiraqi said: "If the capital provider and the Mudarib agree that the profit is between them, and the loss is upon both of them, then the profit is between them, and the loss is on the capital." Ibn Qudamah said in "Al-Mughni": "Whenever it is stipulated to the Mudarib to guarantee the capital, or a share of the loss, the condition is invalid, and we know of no disagreement on this, and the contract is valid. Ahmad explicitly stated this, and it is the view of Abu Hanifa and Malik."