Ijtihad Network Being Wise and Faithful Muslim in the Contemporary World
This book was written by Jonathan Ercanbrack over the course of seven years in which his principle research interest resided in understand the role of law in inspiring, facilitating regulating Islamic finance.
The role of global capital in relation to human social systems has assumed enormous proportions in liberalised, deregulated markets. States attempt to nationalise it, financial centres spring up in its wake, and INGOs attempt to deal with its de-territorialising, supranational characteristics. A global adjudication system (arbitration) has been introduced to safeguard and buttress its flow. The power of Islamic capital has generated numerous sites of legal contestation and negotiation, ranging from gateway financial centres, international law firms and transnational financial institutions, all of which interact in the production of Islamic financial law (IFL). The process of producing IFL illustrates complex fields of action driven by power dynamics, neoliberal paradigms and the institutional momentum of the global economy. The municipal legal systems under study in this book (the United Kingdom, Bahrain, United Arab Emirates and the Dubai International Financial Centre) illustrate globalisation’s acceleration of legal, economic and social production.
- Case studies encourage readers to assess the different regulatory approaches to Islamic finance and the ways in which these differences contribute to the developing legal system
- Provides readers with a comparative perspective of the way in which legal systems interact and are reproduced in global markets
- Suggests that diversity in the global economy takes place within a dynamic power structure in which leading economies largely dictate the rules, standards and best practices of financial markets
Table of Contents
- Introduction
Sharia and the nation state
The globalisation of commercial law
The role of context in the analysis of IFL
Structure
Technical matters
- The sharia: sources, legal theory and unofficial sources of law
The formal sources of Islamic law
The theory of Islamic law
The epistemology o f acts
The textualism of the Usū l Al-Fiqh
Maslahah and rationalising legal tools 34
Legal stratagems (hiyal)
The role of custom as a legal source
The sharia in pre-modern legal practice
Concluding remarks
- Islamic commercial doctrine and classical commercial transactions
God covenant with mankind
The role of intention (Qasd)
The system of Islamic nominate contracts
The conditions necessary for the general validity of contract
Appending shurūt (conditions) to contracts
Conditions and the four schools of law
Gharar
The sale of an on-existent object
The sale of debt (bay‘al-dayn)
Gharar and the four schools of law
Avoiding the rigidities if gharar
The prohibition of usury: ribā
The Islamic origins of the prohibition of ribā
The differentiation of the ribā concept: money, time and
Historical commercial practice
The partnership (sharikah)
The use of interest in commercial transactions
Concluding remark
- Global financial markets and legal transformation
The globalisation of financial services
Liberal values in the global economy
Globalisation and financial in notation
Transnational corporations and Islamic financial law
Commercial pressures for standardised Islamic financial contracts
The religious and ethical aspects of standardisation
The methods and organisations of international legal convergence
Standard terms and conditions in cross-border financial transactions
Standard terms in a syndicated murābahah facility
Islamic financial ijtihād
The limits of Islamic financial innovation
Concluding remarks
- Vehicular legal systems: the legislative implementation of sharia principles
Islamic finance and the United Kingdom
The transmission of Islamic finance to the United Kingdom
Retail markets
The inclusion of the sharia in English law
The legislative and regulatory approach to Islamic financial transactions
The legislative implementation of Islamic financial transactions
IFIs and the benefits of sovereign sukuk issuance
U K sovereign sukuk issuance
The implementation of sukuk
Concluding remarks
- The regulation of Islamic financial institutions in the United Kingdom
The regulation of financial markets
The objectives of financial services regulation
Islamic financial intermediation
The FSA/PRA regulatory approach to Islamic finance
The regulatory classification of Islamic financial products
The regulatory classification of sukuk
The regulatory classification of mudārabah
The sharia audit process
The risks of sharia non-compliance
The impact of EU regulatory harmonisation
Global regulatory in initiatives
The impact of Basel II
Basel III capital and liquidity reforms
Islamic financial transactions in English courts
The Symphony Gems case
The Beximco case and the Rome Convention
The Investment Dar case
Concluding remarks
- The regulation of Islamic financial institutions in Bahrain
Islamic finance and GCC financial centers
The role of the sharia in the legal system of Bahrain
Bahrain: an Islamic financial centre
The authorisation of Islamic banking services
Types of licensee
The regulatory definition of Islamic financial services
Capital adequacy requirements or IFIs
Minimum capital adequacy ratios
Minimum capital requirements for a murābaḥah to the purchase orderer
Governance standards for sharia supervisory boards
A hands-on approach to sharia governance
Approved persons criteria
Concluding remarks
- The regulation of Islamic financial institutions in the United Arab Emirates
The role of the sharia in the judicial systems of the UAE
The Central Bank of the UAE and its regulatory approach to Islamic finance
The authorisation of IFIs
The regulatory classification of Islamic financial products
Capital adequacy standards for IFIs
Governance standards for IFIs
Concluding remarks
- The regulation of Islamic financial institutions in the Dubai International Financial Centre (DIFC)
The legal and regulatory system of the DIFC
The DFSA and its regulatory approach to Islamic finance
The authorisation of IFIs
The regulatory classification of Islamic financial products
Capital adequacy standards for IFIs
Governance standards for IFIs
Concluding remarks
- The enforcement of non-national legal systems: the arbitration of Islamic financial disputes
Arbitration and Islamic financial transactions
The nature of arbitration
The compatibility of sharia and modern arbitration
Arbitration in the Arab world
The enforcement of arbitral awards
The enforcement of arbitral awards in English courts
The enforcement of arbitral awards in GCC states
Concluding remarks
- Conclusion.
Jonathan G. Ercanbrack is Lecturer in the Law of Islamic Finance and Assistant Director of the Centre for Islamic and Middle Eastern Law at SOAS, University of London.
