Legal documentation in Islamic finance: the courts’ approach in reconciling contractual inconsistencies

One of the emerging challenges in the practice of Islamic banking and finance in the modern world relates to legal documentation. The practice of Islamic banking and finance is often subjected to the prevailing laws and regulations in a particular jurisdiction. Accordingly, there are situations whe...

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Main Author:	Oseni, Umar Aimhanosi
Format:	Conference or Workshop Item
Language:	English English
Published:	2015
Subjects:	HG1501 Banking K Law (General) KBP Islamic Law
Online Access:	http://irep.iium.edu.my/42480/ http://irep.iium.edu.my/42480/ http://irep.iium.edu.my/42480/1/10_ICIEF_-_Conference_Programme_-_22.03.2015.pdf http://irep.iium.edu.my/42480/2/Legal_Documental_in_IF_-_Courts_approach_in_Reconciling_Contractual_Inconsistencies.pdf

id	iium-42480
recordtype	eprints
spelling	iium-424802015-05-25T00:38:45Z http://irep.iium.edu.my/42480/ Legal documentation in Islamic finance: the courts’ approach in reconciling contractual inconsistencies Oseni, Umar Aimhanosi HG1501 Banking K Law (General) KBP Islamic Law One of the emerging challenges in the practice of Islamic banking and finance in the modern world relates to legal documentation. The practice of Islamic banking and finance is often subjected to the prevailing laws and regulations in a particular jurisdiction. Accordingly, there are situations where complex commercial agreements utilized in the Islamic finance industry create some contractual inconsistencies due to the number of contractual documents used in a single transaction. To this end, this paper examines the court’s approach in reconciling such contractual inconsistencies without jeopardizing the original philosophy underlying the contract. The study adopts a conceptual approach while utilizing content analysis for some samples of relevant Islamic finance contracts and case law. It is argued that striking a fair balance between the Sharī‘ah clause in the Master Agreement and the ‘hierarchy’ clause is paramount. Absolute reliance on the ‘hierarchy’ clause as held recently in CLP Holding v. Singh [2014] EWCA Civ 1103, might pose some potential Sharī‘ah-compliance issues in Islamic finance documentation. The paper concludes that if the hierarchy clause is fundamentally premised on Sharī‘ah compliance as the governing principle underlying the entire contract, the clause will be considered the first resort, and there would not be any last resort as opposed to the prevailing practice under the English law. 2015 Conference or Workshop Item NonPeerReviewed application/pdf en http://irep.iium.edu.my/42480/1/10_ICIEF_-_Conference_Programme_-_22.03.2015.pdf application/pdf en http://irep.iium.edu.my/42480/2/Legal_Documental_in_IF_-_Courts_approach_in_Reconciling_Contractual_Inconsistencies.pdf Oseni, Umar Aimhanosi (2015) Legal documentation in Islamic finance: the courts’ approach in reconciling contractual inconsistencies. In: 10th International Conference on Islamic Economics and Finance, 23rd - 24th March 2015, Hamad bin Khalifa University, Student Center, Doha, Qatar. (Unpublished) http://conference.qfis.edu.qa/
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English English
topic	HG1501 Banking K Law (General) KBP Islamic Law
spellingShingle	HG1501 Banking K Law (General) KBP Islamic Law Oseni, Umar Aimhanosi Legal documentation in Islamic finance: the courts’ approach in reconciling contractual inconsistencies
description	One of the emerging challenges in the practice of Islamic banking and finance in the modern world relates to legal documentation. The practice of Islamic banking and finance is often subjected to the prevailing laws and regulations in a particular jurisdiction. Accordingly, there are situations where complex commercial agreements utilized in the Islamic finance industry create some contractual inconsistencies due to the number of contractual documents used in a single transaction. To this end, this paper examines the court’s approach in reconciling such contractual inconsistencies without jeopardizing the original philosophy underlying the contract. The study adopts a conceptual approach while utilizing content analysis for some samples of relevant Islamic finance contracts and case law. It is argued that striking a fair balance between the Sharī‘ah clause in the Master Agreement and the ‘hierarchy’ clause is paramount. Absolute reliance on the ‘hierarchy’ clause as held recently in CLP Holding v. Singh [2014] EWCA Civ 1103, might pose some potential Sharī‘ah-compliance issues in Islamic finance documentation. The paper concludes that if the hierarchy clause is fundamentally premised on Sharī‘ah compliance as the governing principle underlying the entire contract, the clause will be considered the first resort, and there would not be any last resort as opposed to the prevailing practice under the English law.
format	Conference or Workshop Item
author	Oseni, Umar Aimhanosi
author_facet	Oseni, Umar Aimhanosi
author_sort	Oseni, Umar Aimhanosi
title	Legal documentation in Islamic finance: the courts’ approach in reconciling contractual inconsistencies
title_short	Legal documentation in Islamic finance: the courts’ approach in reconciling contractual inconsistencies
title_full	Legal documentation in Islamic finance: the courts’ approach in reconciling contractual inconsistencies
title_fullStr	Legal documentation in Islamic finance: the courts’ approach in reconciling contractual inconsistencies
title_full_unstemmed	Legal documentation in Islamic finance: the courts’ approach in reconciling contractual inconsistencies
title_sort	legal documentation in islamic finance: the courts’ approach in reconciling contractual inconsistencies
publishDate	2015
url	http://irep.iium.edu.my/42480/ http://irep.iium.edu.my/42480/ http://irep.iium.edu.my/42480/1/10_ICIEF_-_Conference_Programme_-_22.03.2015.pdf http://irep.iium.edu.my/42480/2/Legal_Documental_in_IF_-_Courts_approach_in_Reconciling_Contractual_Inconsistencies.pdf
first_indexed	2023-09-18T21:00:33Z
last_indexed	2023-09-18T21:00:33Z
_version_	1777410594502082560

Legal documentation in Islamic finance: the courts’ approach in reconciling contractual inconsistencies

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