Lex mercatoria islamica: Shari’a as choice of law under Regulation Rome I in a murabahah transaction agreement

Abstract

The worldwide growth of Muslim population and GCC's booming economies have turned Islamic finance into an ever more popular practice area in jurisdictions of Africa, the Middle East, Southeast Asia and —though less intense— Europe and North America. This paper describes the complexities deriving from Shari'a as choice of law and Shari'a as a legal system capable of being chosen under closest connection principles. Special attention will be paid to a financing scheme named murabaha, which accounts for roughly 80% of the Islamic financing market.