Abstract

Compliance of a contract with Sharia is a major concern of parties, or at least one party to a contract, who chooses Islamic finance instead of conventional banking. In relation to dispute resolution, the same concern could exist. Despite the enormous development that has taken place in the Islamic banking industry, the issue of dispute resolution has remained underexplored and experienced serious challenges. A number of those challenges concern the choice of Sharia as the applicable law. This paper addresses the issue of Sharia as the applicable law in Islamic finance disputes in two parts. In the first part, the challenges when Sharia is chosen as the applicable law is spotted in light of the available case law from the English courts. The second part provides a proper solution to those challenges by proposing the application of the principles of Sharia concerning commercial transactions together with a complementary law.

This paper will be part of the TDM Special Issue on "Islamic Finance and Dispute Resolution". More information here www.transnational-dispute-management.com/news.asp?key=1832