Gharar in Islamic Law Assignment Example | Topics and Well Written Essays - 2250 words

Gharar in Muslim Law - Assignment Exampleanother(prenominal) major contri neverthelession of the Islamic fixs is that being under supervision of their Shariah Boards they presented a wide ambit of questions concerning modern business to Shariah Scholars, hence, providing them an opportunity to understand the contemporary business practice and trade but also to evaluate it in the light of Shariah and to find out other alternatives which may be acceptable according to the Islamic principles (Vogel and Samuel, 1998). Islamic Laws Islam is a complete code of life and encompasses everything in life. It influences families as much as international relations and certainly includes all in all financial issuings. It sources are the Quran and the hadith and the consensus of the opinion of the great jurists and interpreters of Islamic Law. If none of cited provide guidance on a particular matter then there is qiyas or analogy by which jurists and scholars compare an issue of today with a analogous one described in the Quran or Sunnah and draw conclusions from the principles involved (Usmani, 2001). In all mattes of finance, the essence of Islamic law is perhaps based on a verse from the Quran that says Do not usurp one another possessions. The object of Islamic finance is to eliminate injustice and ontogenesis in financial dealings and to create an equitable distribution of wealth by encouraging parkway and mutual co operation. It is believed that this, in turn, will increase productivity and goodwill, alleviate economic hostility and barrack all the members of a society with a feeling of having common economic goals (Al-Qardawi, 2001). However, because the law is derived from writings that introduce modern life, the interpretations can be difficult. In the finance sector, banks appoint Shariah boards to consider transactions that the bank wishes to engage in and decide whether they meet the Shariah requirements. However, boards in different banks may often dumb found to different conclusions (Obaidullah, 2005). Almost all transactions entered into by banks are based on legal contracts that align to local law (or in many cases, English Law) and often add Shariah compliance as an additional requirement. This has not proven to be an easy legal basis for business, although only a hardly a(prenominal) cases have come to the courts, the courts have ruled that only one law can be employ (Ghafoor, 1995). London Rulings Two cases are worth studying a) Islamic Investment Company of Gulf Ltd v Symphony Gems & others (London High Court 13.02.02) b) Beximco Pharmaceuticals Ltd & others v Shamil Bank of Bahrain EC (Royal Courts of Justice, London 11 & 12 December, 2003) In the later case, the banking expert on Islamic Law and former director, Center of Islamic and Middle easterly Law on the invitation of the court gave following observations (Usmani, 2001) The precise scope and content of Islamic Law in general, and Islamic banking in particular are marked by a degree of controversy at bottom Islamic world, best exemplified by the fact that the actual practice of Islamic banking differs widely within the Islamic world (Usmani, 2001). In the absence seizure of any agreement on the boundaries of Islamic Banking or indeed on what ought to be the precise ingredients of a Morabaha agreement, it is in practice up to the individual banks to determine the issue. In the absence of any legal prescription as to what does and what does not constitute Islamic banking or finance, most Islamic banks, including those in Bahrain, seek the advice of Islamic Scholars who examine and approve