Conflict of Laws?

Formerly practising barrister Dominic Selwood gives a straightforward explanation of the position with regard to Islamic law in England:

‘The Shari‘a is Islamic law, and English law is conventional law, so how does a modern transactional lawyer juggle the two sets of legal principles? This is a classic conflict of laws puzzle.

The solution the Common Law judges have arrived at has been to make a clear distinction between the Shari’a and the contractual governing law. As a result, they say. [sic] the Shari’a is no justiciable in a conventional court. As such, a Common Law judge will settle a contractual dispute according to the ordinary principles of English contract law, but he or she will not rule upon whether a particular act, event, or course of conduct has breached any provisions of the Shari’a.

This is not to undermine or undervalue the Shari’a element to the contract. Rather, it places the Shari’a aspects of the transaction into the realm of the commercial agreement rather than the legal agreement. As judges only intervene to apply the law, they are not required to involve themselves with the Shari’a. Consequently, the extent to which the deal is or is not in compliance with the Shari’a is not a matter of law, but a matter of commercial judgement of the parties. It is thus similar to whether a party buying a house deems the house suitable for his needs. Or whether a person borrowing on a mortgage things that a 25-year term is the most beneficial for his circumstances. There may well have been discussion and agreement between the parties on these topics, but the issues are not matters of law – they are matters of commercial judgement. As such, they are beyond the jurisdiction of the judge.

In practical terms, this means that the parties to an Islamic financial transaction must satisfy themselves as to the validity and applicability of the fatwa [the Islamic legal opinion — here, approval of their transaction] before they enter into the contract. If at a later date either party decides there is a problem with the fatwa, the courts are unlikely to be inclined to help.’[1]



[1] Dr Dominic Selwood, ‘Islamic Contracts in a Modern Legal Context’ in Dr Humayon A. Dar and Umar F. Moghul, eds, The Chancellor Guide to the Legal and Shari’a Aspects of Islamic Finance (London 2009), 25-56 at 35-36