The Path of Eastern Arbitration to Take Islamic Finance Disputes from the Hands of English Litigation

Over the last decades the exponential growth in Islamic finance and the globalization of the industry has resulted in the disputes amongst international entities arising out of Sharia-compliant agreements to be more commonplace. It has been a common practice amongst the parties of Islamic finance transactions to choose English law as the governing law. This paper, after examining the limitations in the applicability of Islamic law in English courts, focuses on the critics that the current practice of choosing English law as the governing law faces and discusses the potential of arbitration to provide a more advantageous dispute resolution method for the parties that agree on resolving their issues compliant with Islamic law. Finally, this paper explains the adventure of Eastern arbitration to take Islamic Finance disputes from the hands of English courts by examining the initiatives taken by the arbitral institutions so far, as well as the ideas that came from scholars to create better solutions for the parties of Islamic finance transactions in their disputes