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This paper explores the experience of “Shari’a” as non-state law in the English courts through a historical analysis of past Islamic finance dispute resolutions (IFDRs). This paper aims to propose a conceivable scenario relating to the law applicable in international commercial contracts in the English courts with the emergence of the Hague Principles 2015.

This paper addresses several issues that have been raised in English case law: doubts about the legal nature of “Shari’a” as non-state law; the limits placed on freedom of choice of “Shari’a” law by the application of a single legal system; and the distinction between application of law and incorporation by reference of “Shari’a” in IFDRs. The paper then analyses the conformity of “Shari’a” with the provisions now used to resolve Islamic finance disputes (trade and investment) in the English courts, using an empirical analysis of The Accounting and Auditing Organization for Islamic Financial Institutions standards.

The paper provides that, in theory, “Shari’a” standards could play a significant role in IFDRs after Brexit, even though a gap persists in practice because the Hague Principles 2015 have not yet been adopted by the English legal system.

The study focuses on the English courts and shows how the IFDRs could be resolved with the emergence of Hague Principles 2015 in the post-Brexit era.

To the best of the author’s knowledge, this paper appears to be the first paper to provide a conceivable scenario relating to the future of the IFDRs in the English courts.

This is the first of two papers which examine whether Arab securities regulations can be the subject of a methodological study in comparative securities regulation, especially with reference to EU regulations. Little is known about Arab securities regulation in European academic discourse on financial regulation. Needless to say, the sociopolitical dynamics of Shari'a (Islamic law) have occasionally been decontextualised by Western researchers in a manner that has often resulted in obfuscating a balanced projection of Shari'a's juridical impact. In order, therefore, to provide a fuller analysis, this first paper starts by explaining the importance of examining Shari'a juridically in the broader context of commercial legislation, as despite the relatively stable regulatory status quo, Shari'a still poses juridical risks to imported Western legal concepts. It also examines Shari'a's juridical impact on Jordan, Kuwait and Oman. The second paper, which will appear in a future issue of the Journal, addresses the specific juridical impact of Shari'a on capital markets, before looking at its impact on capital market laws of Jordan, Kuwait and Oman. In order to provide an insight into existing Arab securities regulations, it then moves to survey the securities and company laws in the aforementioned countries. The discussion also includes a brief examination of market conditions, especially the early factors that accompanied the genesis of such Arab securities markets, notably in Kuwait. The second paper concludes by addressing the question of the suitability of the case study Arab markets to comparative studies in EU securities regulation. It explains in the process why the European experience is relevant (particularly in light of the many EU—Arab association agreements due to take effect from 2010, together with EU ‘harmonisation’, ‘minimum standards’, and ‘single Passport’ regulatory concepts).

The governance structure of Islamic financial institutions (IFIs) implements Islamic canon law (Shari'a) into business transactions through Shari'a supervision processes. This paper aims to define Shari'a supervision and examine Shari'a supervisory councils (both within and outside the Central Bank), Shari'a consulting firms, Shari'a advisors, and Shari'a Supervisory Boards (SSB). It also discusses the importance of the hierarchical position of SSBs and evaluates their objectives and functions.

The paper reviews a wide range of theoretical literatures especially recent proceedings of relevant conferences in the Gulf Cooperation Council (GCC) countries along with the standards of the Accounting and Auditing Organization of Islamic Financial Institutions (AAOIFI). A framework for understanding the role of the SSB is developed suggesting a set of objectives and functions for the SSB.

The paper finds a lack of standardization among the IFIs concerning the position of the SSB within the corporate hierarchy. Moreover, the SSB is found to control the IFIs activities more than the other types of Shari'a supervision such as Shari'a consulting firms and Shari'a advisors.

The research focuses exclusively on the GCC countries and excludes the other Middle East and Far East countries where Shari'a supervision might have different forms.

The research provides guidelines for IFIs in defining the SSB role in their governance structure and recommends the SSB among the other forms of Shari'a supervision (Shari'a consulting firms and Shari'a advisors) in controlling the IFIs activities.

This study contributes to the literature gap about the governance of IFIs. It is one of the first studies that provide a conceptual foundation for the SSB role in the governance structure of IFIs.

The purpose of this paper is to illuminate issues surrounding executive compensation as it relates to current understandings of Islamic business law.

The emerging bodies of literature in the fields of executive compensation and opinions of stock options under Shari'a law are reviewed.

It appears that the trend in offering employee stock options as part of a Shari'a compliant compensation package is acceptable in most cases, yet because of its close association with the more problematic idea of derivative transactions, the company must be vigilant in obtaining the approval from its Shari'a Standards Board before offering it as part of an overall compensation package.

Existing quantitative data in this area are limited. Given the qualitative, exploratory nature of the design, generalizability is not as robust as other designs.

The paper makes recommendations about the inclusion of employee stock options as part of a Shari'a compliant executive compensation package.

This paper advances the extant literature on the ethics of executive compensation in general as well as adding to the extant literature on Shari'a compliance of executive compensation packages.

There has been much controversy, if not dispute, especially among non-Muslims over the attitude of Islam to tourism. One may claim that this debate is mainly due to non-Muslims' misunderstanding of the true nature of the religion and its Shari'a or Islamic law. This chapter attempts to show in some detail tourism from the perspective of the Islamic creed and to demonstrate that the religion does encourage tourism and regards it as legal. To do this the chapter reviews a number of sources including the holy Qur'an.

Islamic financing is based on the ideology of Islam, proposing a different economic system than capitalism. The essence of Islamic financing lies in trading of goods, provision of services and/or investment under profit and loss sharing. This study aims to examine legal forms and economic substance of the contracts used by the Islamic financial industry.

To conclude on the objectives of the study, five most widely used contracts (modes/products), including Murabaha, Ijarah, Diminishing Musharaka, Sukuk and Mudaraba (deposits), were selected to test against the theory of the Islamic financial system.

It is found in the process that legally (legal form) contracts/products are in line with theory; however, economic substance is not very different from conventional counter parts.

Through application of alternative calculation measures/methods and proper training of human resources, Islamic financial institutions can shift economic substance of contracts in line with the theory of Islamic finance.

Islamic finance is an emerging area, and reasonably good amount of literature is available; however, perhaps, this is the only piece of work focusing on calculation methods, contributing in economic substance of contracts, being used in modern Islamic finance in addition to legal form as per essence of Islamic financial system.

The Islamic financial institutions (IFIs) maintain better control over their transactions than conventional financial institutions (CFIs) through the existence of Shari'a Supervisory Board (SSB) and Shari'a Control Department (SCD). The purpose of this paper is to highlight the superiority of Shari'a supervision over external audit and Shari'a audit over internal audit. The study identifies five independent variables that affect the SSB control: ex‐ante Shari'a audit; ex‐post Shari'a audit; SCD reporting to the SSB; corrective actions of SSB towards the management violations; and the number of SSB members.

The variables are articulated in five hypotheses, which are tested by ordinary least square regression. The data are collected via a questionnaire which was sent to the SSB members of 219 IFIs in the Gulf Cooperation Council (GCC) countries.

The results indicate that ex‐ante Shari'a audit, ex‐post Shari'a audit, and reporting of SCD are significantly related to the SSB control, whereas corrective actions and the number of SSB members have insignificant relation.

The research is focused on internal factors only, without considering other external factors such as stakeholders and regulators. Also, the research covered the GCC region alone.

The research recommends testing the hypotheses in other geographies to generalize the results, and including external factors as well as shareholders and board of directors.

The research provides practical implications for the SCD role and calls for merging the SCD with the traditional internal audit department to reduce the excessive work of controlling.

The paper contributes to the literature gap about the SSB. It is believed to be one of few studies that provide empirical evidence about the SSB control in the IFIs of the GCC region.

The purpose of this study is to identify the relation between the conflicts of interest in the Shari'a Supervisory Board (SSB) in the Islamic financial institutions (IFIs) and six independent variables: the SSB executive position, the SSB remuneration, the relation between the SSB members and the Board of Directors (BoD), and the multiple memberships in Islamic funds, issuers of Islamic bonds (Sukuk), and companies trading in capital markets.

The variables are articulated in six hypotheses and tested by ordinary least square regression. The data were collected via a questionnaire which was sent to the shareholders, the BoD, and the SSB members of all of the IFIs in the Gulf Cooperation Council (GCC) countries.

The results indicate that the SSB executive position, the relation between the SSB members and the BoDs, and the membership in Islamic funds and issuers of Islamic bonds are significantly related to the conflicts of interest, whereas remuneration and membership in companies trading in capital markets have insignificant relation.

The paper does not address the impact of SSB ownership in the IFIs, or the relation between the SSB and the shareholders, or the impact of the corporate governance codes on the relationship between the IFI and the SSB.

The study recommends testing the hypotheses in other geographies to generalize the results, and measuring the impact of the SSB ownership on the conflicts of interest as well as its relation with shareholders, regulators, and clients.

The paper provides practical implications to the SSB members and the BoD in the IFIs and calls for setting a maximum number of SSBs for each SSB member.

This study contributes to the literature gap of the SSB role in the governance of IFIs. It is believed to be one of first studies that provide empirical evidence about the SSB conflicts of interest in the IFIs of the GCC region.

The purpose of this paper is to examine and illustrate how a relatively young Islamic financial institution has successfully gone international. Despite the fact there are many larger financial institutions in the Arabian Gulf, they either failed to identify the opportunity or were reluctant to go international. But Arcapita seem to have capitalized on this apparently untapped niche market in the international arena through its unique policies and strategies.

Relevant data and literature have been collected from publicly available sources. Basic company information was collected from company annual reports, press releases, and web sites. The Bankscope database has been used to generate the bank's comparative financial performance.

Islamic Investment banking is a relatively new development. This is essentially a niche market and Arcapita has not only identified this opportunity but also has become internationally successful within a short period of time. The case illustrates how the company raises funds from the Middle East region and then invests in the USA, Europe, the Middle East and Asia.

Being the first of its kind in conforming to the Shari’a Principles (Islamic Law) fully in its business, Arcapita's progress to date is quite spectacular. This comprehensive teaching case study provides the company history and background, as well as insights into its operational and organizational realities, strategies and management practices. Academics, students and practitioners from the region and beyond will find this case study interesting and useful.

Gives an account of Islamic Banking practice, and the implications of Islamic law for Islamic and Western banks. The growth in Islamic fundamentalism presents problems for Islamic banks and Western banks in serving Muslim states and countries with sizeable Muslim populations. Shows the techniques available to Islamic banks and considers some of the marketing problems they face in non‐Muslim countries. Also considers the international banking market and the role Islamic banks have there, and reviews the problems of bank recognition. A forward view examines what the future may hold for Islamic Banking. The appendix presents the principal concepts of banking under Islamic Law.