Andrew Cunningham of the Financial Times recently penned an column that would make any dhimmi proud.
He actually sees the solution to Shariah Finance’s woes to be an expanded role “in the boardroom” for Shariah scholars.
Worse yet, the context in which he made this proposal was in response to a Kuwaiti Shariah-Compliant company trying to weasel its way out of its financial obligations by claiming that it had mistakenly entered into an arrangement that was “unislamic.”
“It is an extraordinary sight. A Sharia-compliant finance company is arguing in an English court that it should not have to make good on one of its financial obligations because the obligation was never Islamic.
Yet that is exactly what Kuwait’s The Investment Dar (TID) company is arguing as it tries to avoid paying Lebanon’s Blom Bank a return on deposits placed with it.
TID’s argument is that, since its articles of association permit it to engage only in business that is Sharia-compliant, if the way in which it calculated the returns to Blom breached Sharia law, the contract with Blom is void. As the lawyers say, TID would have acted ultra vires — beyond its powers — in entering the transaction.”
http://gulfnews.com/business/opinion/sharia-boards-should-play-strategic-role-1.617178
The case of TID v Blom is ridiculous at best. TID’s Sharia board originally signed off on the deal as Sharia compliant and now they are arguing they were wrong. They want to avoid returning principal to Blom as well because Blom didn’t take any risk. As my recent article noted there is meant to be risk for investors/banks but that gets drafted out of the deals as Banks really don’t want to take it! What’s disgraceful in this case is that the English court is actually permitting a Sharia compliant argument. This means the contract may be determined as unenforceable in an English court because it wasn’t Sharia compliant even though it is otherwise enforceable under English contract law.
That’s 500 years of the development of the world’s finest legal system thrown down the toilet to suit Islam…