The Principles of Glorious Sharia’a

Shamil Bank of Bahrain EC v Beximco Pharmaceuticals Ltd and others CA TLR 3 February

It was a term of the contract that ‘this agreement shall be governed by and construed in accordance with the laws of England subject to the principles of Glorious Sharia’a’. For general reference, the principles of Sharia’a afforded no reference to, or identification of, those aspects of Sharia’a law which were intended to be incorporated into the contract, let alone the terms in which they were framed. One principle expressly stated in the Qur’an and Sunnah was that the charging of interest upon a loan, in whatever form, was Riba and was contrary to the Sharia’a. A Morabaha Agreement was a sale contract recognised as valid by Islamic law and the bank’s claims were made under two Morabaha Agreements. The principle defence advanced was that the various agreements amounted to unlawful agreements to pay Riba and were thus void or unenforceable or both.