Finance transactions in the Middle East are governed by a mix of complex domestic and foreign laws. Depending on the location, structure of financing and nature of the parties, the documentation could be governed by a number of different laws with recourse to a number of dispute resolutions available in various jurisdictions.
The choice of English law as the governing law of the principal legal documents in the Middle East is common. Banks and financial institutions take comfort from the legal certainty that English law affords and the English courts are generally viewed as “creditor-friendly’. While for security arrangements, they are typically governed by the laws of the jurisdiction in which the secured assets are located.
Drafts of any Islamic documents are also commonly presented to a panel of Shariah scholars, who review the structure and detail of the documents to ensure their compliance with the principles of Shariah. As such, it is not unusual to see principles of English law governing the underlying “debt’ obligations, local law governing the security and an overarching precept that the transaction should not contravene Shariah.
ISRA THOMSON REUTERS ISLAMIC COMMERCIAL LAW REPORT 2016 (Pg 143 - 145)
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