Islamic Finance and Dispute Resolution: Part 2

Author: Nadar, Aisha

Source: Arab Law Quarterly, Volume 23, Number 2, 2009 , pp. 181-193(13)

Publisher: BRILL

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Abstract:

The Islamic Financial Industry is an industry that organises financial services in accordance with Islamic Law, in the same way as the traditional financial industry is organised in accordance with secular law. The unique challenges facing the industry in terms of compliance with Islamic law have been internationally recognised in relation to capital adequacy, risk management, corporate governance, transparency and disclosure. The same, however, has not been true in the area of dispute resolution. The purpose of this paper is to identify the unique challenges facing Islamic finance in compliance with Islamic law in the ambit of English courts, evaluate the features of international commercial arbitration as they relate to overcoming these challenges, and provide some suggestions for going forward. The paper is structured as follows. Section 1 will provide a discussion on governing law of contract and the limitations imposed by English courts on party autonomy. Section 2 discusses International commercial arbitration as an alternative dispute resolution forum. Section 3 presents some ideas for going forward, within the context of historical lessons. Finally the paper presents some conclusions in Section 4.

Keywords: CONTRACT LAW; CONVENTIONAL FINANCE; DISPUTE RESOLUTION; FINANCIAL INTERMEDIATION; INTERNATIONAL COMMERCIAL ARBITRATION; ISLAMIC FINANCE; PARTY AUTONOMY

Document Type: Research article

DOI: http://dx.doi.org/10.1163/157302509X415701

Affiliations: 1: Ph.D. Student, School of Law, Queen Mary, University of London, London, UK

Publication date: 2009-03-01