The Application of Al-Rahn Contract Using Future Asset under Debenture Structure: Analysis on the Aspect of Prohibition of Gharar

One of the essential conditions to conclude al-Rahn (pledge) contract is to ensure that the pledged asset (Mal al-Marhun) is available during contract execution. The absence of this aspect may trigger the issue of Gharar (uncertainty) which would affect the validity of al-Rahn contract. This paper will look into the application of al-Rahn contract under debenture structure where the asset used as security for the debenture may include future asset which shall only be determined during crystallisation stage. The analysis will focus on the concept of Gharar and whether the issue of non existence of pledged asset may tantamount to element of excessive Gharar which is prohibited under Islamic commercial law (Fiqh al-Muamalah).