Islamic Law (Sharia) as Applicable Law on Commercial Contracts: A Legal Tragedy or Interaction Between Legal Systems

Studies on Islamic law potential in international Commerce and Comparative research on ethical code of commerce have increased in recent decades. Two cases brought to English court titled, Shamil Bank of Bahrain v. BeximcoandMusawi v RE International (UK) Ltd (2007) raises the question of how the parties of contract could choose Islamic law to serve as applicable or proper law of the commercial contract and financial disputes. This article tries to review some rules and principles of Islamic Commercial law, such as principle of consent, foredoom of commerce and its limitations and protecting of merchants. It also analysesMamluk Commercial Treaty with Republic of Florence in 1488 and two recent cases brought to English courts based on Glorious Sharia as applicable law and governing law. For comparative study purposes, this article discuses legal and ethical code of commerce in Islamic teaching in order to introduce similar conception in other major legal system. The outcome of this study is that it is necessary for comparative law centers in Islamic countries and International Islamic Fiqh Academy at the Organization of Islamic Cooperation, to introduce Islamic commercial rule and principles in the model commercial law frameworks. This approach will facilitate choices of Islamic law as applicable law and considered a step toward interaction between Islamic and Western legal systems in the realm of commerce.