Am I obligated to return the capital of my friend who invested it in my shop based on a profit guarantee, knowing that the shop incurred losses and he recovered his capital within two years of operation?
If what transpired between you was a contract and you stipulated a guaranteed, known profit, then the Mudarabah is invalid ().
If the Mudarabah becomes invalid, then the owner of the capital is entitled to all of the capital (or what remains of it) and all of the profit, if any was earned. All losses, if any occurred, are also borne by the owner of the capital. The Mudarib (the working partner) is entitled to a fair wage (ajr al-mithl).
Therefore, if the capital was lost entirely, he does not have the right to claim it from you. All previous profits belong to him, and you are entitled to a fair wage from him for the past period.
Summary from Ftawy's records · added here
Reviewed by El Fatwa's sharia committee.
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Where this answer came from
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- Original fatwa ID
- 152711
- Added here
- . This is when the answer was added to El Fatwa, not the fatwa's date.
- Text
- Summary from Ftawy's records, reviewed by El Fatwa's sharia committee.
- Read the full ruling
- Read the full answer on Ftawy