Explanation of Article 564
The first paragraph refers to the obligation of the mudarib, upon the termination of the mudaraba, to return the share of the capital owner from the mudaraba funds, meaning the principal along with any profit due to the capital owner or any loss incurred. The mudarib must return the capital owner's share immediately upon the termination of the mudaraba contract, taking into account what is stated in Article (563) of the provisions; such as if the situation requires converting some non-cash assets into cash, or if it requires bringing some mudaraba funds to a state where they are not exposed to damage or loss.
The second paragraph explains the consequence of the mudarib's delay in fulfilling this obligation, which can be divided into two scenarios:
The first scenario: The funds suffer a loss due to the mudarib's delay in returning them, making the mudarib liable for the loss and responsible for this deficiency due to his breach of obligation.
The second scenario: The funds generate a profit, in which case the capital owner is entitled to his share of the profit; not based on the mudaraba contract but as compensation, according to the rules of unjust enrichment.
For instance, if the mudaraba funds were goods at the time of termination and the mudarib delayed without acceptable justification in the procedures of converting them into cash, resulting in their damage or depreciation, the mudarib would be liable for this damage or depreciation. If the value of the goods increased, the capital owner would be entitled to his share of that increase not based on the mudaraba contract, as the contract has ended, but as compensation.
The article indicates that if the mudarib's delay is justifiably acceptable, such as being unable to liquidate the mudaraba funds for reasons beyond his control, he would not be liable, as the mudarib's obligation is one of exerting effort, not achieving a result.
Related To
Article 564
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A mudaraba agent shall, upon the termination of the mudaraba contract, return to the capital owner his share of the mudaraba capital.
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If the mudaraba agent fails to return the capital without an acceptable justification and such capital suffers a loss, he shall be liable for such loss. If, however, a profit is realized, the capital owner shall be entitled to recover from the agent the realized profit until the capital is returned to him.