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Shariah Litigation & Arbitration in Malaysia (continued..) banking disputes and they may even become the preferred methods. Other jurisdictions It would not be possible to discuss the dispute resolution process in other jurisdictions, but the position in England may be taken as an example. It has long been the practice of the business community to specify English law as the choice of law to govern the contract and English courts as the courts of jurisdiction over the disputes, especially in cross-border transactions. This practice is now being adopted for Islamic financing contracts. While the suitability of English law and the integrity of English courts cannot be questioned in these matters, yet for contracts governed by Islamic law there is a danger. Now, where the transaction is an Islamic banking transaction the parties to the contract would naturally want it to be governed by Islamic law. Even so, an English court will not apply Islamic law to the contract. This was the decision in the Shamil Bank of Bahrain versus Beximco Pharmaceuticals and others, [2004] All E R 1072 (CA). One of the issues in that case was the governing law of the contract. The governing law of the agreements in that case was stated to be: “Subject to the principles of glorious Shariah, this agreement shall be governed by and construed in accordance with the laws of England”. In the High Court the judge said that the reference to Shariah was no more than a reference to the fact that the bank purported to conduct its affairs according to the principles of Shariah. But that did not mean, he continued, that Shariah law was applicable to the contract in an English court. On appeal the CA said that the statement as to the governing law was “intended simply to reflect the Islamic religious principles according to which the bank holds itself out as doing business rather than a system of law intended to ‘trump’ the application of English law as the law to be applied in ascertaining the liability of the parties under the terms of the agreement...”. There was another reason why Shariah law could not be applied in an English court. The trial judge in dealing with the question of the applicable law referred to the Rome Convention on the Law Applicable to Contractual Obligations 1980 (to which England was a party). He said it only made provision for the choice of the law of a country but did not provide for the choice of law of a non-national system of law, such as Shariah law. It has been suggested that one way to overcome the problem is to set out in extenso the principles of Shariah that will govern the contract in the contract itself. If that is done, the courts will apply those principles as terms of the contract agreed by the parties. While this may appear to provide some comfort it cannot be a viable solution to the problem. It would simply be not possible to set out all the terms that will govern a contract within the contract itself since there is a vast body of statute and common law and equity that will apply to contracts whether they are expressed in the contract or not. The message is clear. Parties that wish to apply Shariah law to their contracts have to choose a jurisdiction that will apply such law, otherwise their intentions will not be carried out. Malaysia is one such jurisdiction. Mohamed Ismail Mohamed Shariff is a partner at Skrine in Kuala Lumpur, Malaysia. Refer to his profile on page 16. 42
All Nominated Lawyers in the Category of Islamic Litigation & Arbitration • • Amel Al Aseeri Zeenat Al-Mansoori & Associates Mohamed Ismail Mohamed Shariff SKRINE Also Nominated in Islamic Dispute Resolution, Islamic Corporate Finance, Shariah Investment Funds, Islamic Banking & Finance See Full Profile on Page 16 43
Page 3 and 4: EDITOR’S NOTE Spotlight on the Le
Page 5 and 6: CONTENTS Islamic Energy Finance Dev
Page 7 and 8: Global Legal Islamic Finance Indust
Page 9 and 10: The Development of Islamic Banking
Page 11 and 12: IN THE CATEGORY OF Islamic Banking
Page 23 and 24: All Nominated Lawyers in the Catego
Page 25 and 26: Convertible Sukuk in Kuwait: A Lega
Page 27 and 28: IN THE CATEGORY OF Islamic Corporat
Page 29 and 30: IN THE CATEGORY OF Islamic Corporat
Page 31 and 32: Islamic Finance Dispute Resolution
Page 33 and 34: Islamic Finance Dispute Resolution
Page 35 and 36: IN THE CATEGORY OF Takaful, Securit
Page 37 and 38: Structuring Shariah Compliant Funds
Page 39 and 40: Structuring Shariah Compliant Funds
Page 43: Shariah Litigation & Arbitration in
Page 47 and 48: A New Dawn For Islamic Project Fina
Page 49 and 50: IN THE CATEGORY OF Islamic Project
Page 53 and 54: Developments in Islamic Energy Fina
Page 55 and 56: Opportunities in Islamic Real Estat
Page 57 and 58: Opportunities in Islamic Real Estat
Page 61 and 62: Transportation Finance (continued..
Page 63 and 64: IN THE CATEGORY OF Islamic Transpor
Page 65 and 66: Securitization and Shariah Law By J
Page 67 and 68: Securitization and Shariah Law (con
Page 69 and 70: IN THE CATEGORY OF Islamic Securiti
Page 71 and 72: International Islamic Finance Vehic
Page 73 and 74: International Islamic Finance Vehic
Page 77 and 78: The Opportunities for Growth in Tak
Page 79 and 80: INDEX BY LAWYERS Page in BOLD refer

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