The Supreme Court of Appeal gave judgment last month in Lodhi 5 Properties Investments v Firstrand Bank Limited (170/14) [2015] ZASCA 72: see here (pdf). A summary of the decision is available here (pdf). The court held that a debtor was liable to pay mora interest in respect of its delayed payment of an outstanding debt to a bank, under a loan agreement governed by Sharia law. The court found that mora interest was not interest payable in respect of the loan of money: it was instead the damages that arose because of the debtor's failure to perform an obligation and was not, therefore, subject to the Sharia law prohibition on the charging of interest on loan debts.
Friday, 5 June 2015
South Africa: Sharia law and mora interest
The Supreme Court of Appeal gave judgment last month in Lodhi 5 Properties Investments v Firstrand Bank Limited (170/14) [2015] ZASCA 72: see here (pdf). A summary of the decision is available here (pdf). The court held that a debtor was liable to pay mora interest in respect of its delayed payment of an outstanding debt to a bank, under a loan agreement governed by Sharia law. The court found that mora interest was not interest payable in respect of the loan of money: it was instead the damages that arose because of the debtor's failure to perform an obligation and was not, therefore, subject to the Sharia law prohibition on the charging of interest on loan debts.
No comments:
Post a Comment