Consequences of the International Character of Islamic Finance Contracts: An Analytical and Comparative Study in the Light of the Shari’ah, Comparative Legislation and International Case Law

Abstract

The study tackles a vital topic “International Consequences of Islamic Finance Contracts”. Despite the spread of these contracts, international transactions related to them continue to clash with a legal obstacle, which is non- application of Shariah (Islamic law) to a contract that is essentially an Islamic contract. This issue has become the focus of contracting parts and others, who fell for the elastic text "complies with Islamic law". The study reveals the meaning of Islamic law being an applicable law as well as judicial jurisdiction since they are the most important consequences of international Islamic financing contracts. Otherwise, transactions related to such contracts will collide with the lack of knowledge of its parties of the basics that should be initially followed to avoid subsequent immersion in the clutches of non-Islamic transactions. Based on the aspirations of Islamic finance, its desire to develop the present and future of its contracts, and its hope that the world economy understands the need for it, the study is divided into two main parts and an introduction. The first part explains the mechanisms aimed at applying Islamic law to international Islamic finance contracts, practically by explaining the pretexts of a famous English case law that refused to apply Islamic law to an Islamic finance contract. Later, judicial, regulative, and jurisprudence arguments used by that law were refuted. Next, this part will highlight the elements promoting the application of Islamic law to these contracts from a legal perspective. The second part clarifies ways of ensuring a sustainable future for Islamic finance contracts by identifying the three main categories. It then points out to arbitration as a model for alternative means of settling disputes relating to these contracts. Afterward, this part describes the situation of Islamic finance contracts using Islamic fintech focusing on two of them: Blockchain and smart Islamic financing contract.