response from the Bar to the FT

Robin Wigglesworth’s analysis ‘By the Book’ omits one important respect in which London’s position as a centre of global Islamic finance is already rather assured. That is, from the perspective of the adjudication and enforcement of shari‘ah compliant financial contracts. These contracts are governed more often by English law than by any other.

Although few cases have come before English courts and there are a mere handful of landmarks among these (the first a dozen years ago), the preference for English law and courts over those of Malaysia or any Arab Gulf state represents one reason why the competitive advantage of those acknowledged centres (whether measured by volume of deals, or size of proximate Muslim populations) is less absolute than it might appear.

The preference for English (and secular) law as the choice of law pertains precisely to reasons stated in Wigglesworth’s analysis: the legal uncertainty potentially (and sometimes actually) resulting from the pluralistic quality of Islamic law — even as the diversity of Islamic legal schools and rulings could (in contexts other than modern finance and the harmonisation of standards) be seen as virtues.

The sought after inward investment into the United Kingdom then will arise not out of the appreciation of ‘appreciative Muslim countries and financiers’ but out of the fact that the UK as a jurisdiction offers (at least) this one crucial advantage that London’s competitors for global Islamic finance market share are not very likely to match in the foreseeable future.

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