IslamicFinance.de

Increasing number of defaults will lead to test the legal framework and stability of the Islamic finance structures in centres such as Dubai, Bahrain and Malaysia. Judges will have to weigh conventional law and sharia (Islamic law) used in contracts, and legal uncertainty over key contract provisions could hurt the industry's ability to bounce back when the global economy recovers. The industry will be watching to ensure any legal disputes are settled in a transparent manner which gives certainty to the contract terms entered into, said Davide Barzilai, a London-based Islamic finance lawyer with Norton Rose.