* D.K.K.L.* - Dari Keramat ke Leeds

The development of Islamic banking in the UK: the application of Sharia principles under English law.

2011-05-03T01:58:00.002+01:00

salam,

sorry for the lack of update. being busy with preparation of final year exam and mostly my dissertation. just finished it today. below is the draft of my dissertation. please be informed that the draft below is part of my final year law dissertation. enjoy your reading! =)

The development of Islamic banking in the UK

Prepared by:

Mohd Shazli Mohd Zaini

200329152

(8312 words)

Supervised by:

Mrs. Judith Dahlgreen

Contents

1. Abstract 3

2. Introduction 4

3. Chapter 1: The development of Islamic banking in the UK 6

- The reasons for the growth of Islamic banking

- The principles of Islamic finance

- The products of Islamic banking

4. Chapter 2: The applications of Sharia law in English courts 16

- Why English law is chosen to govern Islamic banking contracts?

- Analysis on the case of Islamic Investment Company of the Gulf (Bahamas) Ltd. v Symphony Gems NV & Ors

- Analysis on the case of Shamil Bank of Bahrain v Beximco Pharmaceuticals Limited and Others

5. Chapter 3: The regulation of Islamic banking in the UK 32

- The government’s objectives for Islamic banking

- How Islamic banks fit into the UK regulatory system

- Alternative finance arrangement under Finance Act

6. Concluding remarks 39

7. Bibliography 43

Abstract

The aim of this dissertation is to analyse the development of Islamic banking in the UK focusing on the applications of the sharia principles under English courts and the regulations of Islamic banking products under the UK legislations. The research is important, as the Islamic banking is rapidly being developed in the UK, it is essential to identify whether the UK has the necessary regulatory and supervisory framework to accommodate the growth of Islamic banking. Arguably, it is suggested that the UK has the capacity to further develop the Islamic banking because of its effective legal, regulatory and the supervisory framework as well as the efficient court system that can effectively deal with the Islamic banking disputes. The methods of the research will primarily based on the analysis on the articles and publications by the government’s agencies, academic’s journals’, textbooks on Islamic finance and the relevant websites. At the end, the result of the research suggested that although the UK has great potential for the growth of Islamic banking, the fundamental aspects of Islamic banking i.e. the sharia principles posses’ great challenges for the further development of Islamic banking in the UK.

Introduction

The aim of the first chapter is to provide with the theoretical aspects of Islamic banking in the UK. Firstly, the chapter will discuss on the reasons for the increase in demand of Islamic banking in the Western area especially in the UK. Next, it will define what is meant by Islamic banking and then goes to examine the main features of Islamic banking such as prohibition on maisir (speculation), riba (interest), gharrar (uncertainty) and the role of Sharia board. The final part of the first chapter will analyse several Islamic banking products which are murabaha (cost plus financing), ijara (lease) and sukuk (Islamic bond) that commonly used by parties on their contracts involving Islamic banking transactions.

Next, the objective of the second chapter is to analyse whether the English courts would consider the sharia principles when dealing with Islamic banking disputes. This is because, as the Islamic banking has been expanding, it is inevitable that the English court will be required to deal with the commercial disputes especially when the parties have designated the English law as the law governing the transactions.[1] The first part of the chapter will briefly examine two reasons for Islamic banks to designate the English law as the governing law of an Islamic banking contract and the position of the Rome Convention under English law, that fundamentally effect the judgements of these disputes. The chapter will then analyse two international Islamic banking disputes where English law has been chosen as the governing law namely Islamic Investment Company of the Gulf (Bahamas) Ltd. v Symphony Gems NV & Ors[2] and Shamil Bank of Bahrain v Beximco Pharmaceuticals Limited and Others[3]. The final part of the chapter will summarise on the legal principles established from these cases and the difficulties faced by the English courts, which tied by the Rome convention, in dealing with Islamic banking disputes.

Finally, the aim of the third chapter is identify whether the UK has the effective regulatory and supervisory framework to support the growth of Islamic banking. The first part of the chapter will analyse the UK’s objectives and guiding principles for Islamic banking in the UK. The chapter will then look at how the Islamic banks fit into the current UK regulatory system and the challenges of regulating Islamic banking in the UK. Finally, the chapter will discuss on alternative finance arrangement, which was introduced under the Finance Act, and whether the UK has adequate facilities to further promote the development of Islamic banking.

Chapter 1: The development of Islamic banking in the UK

Introduction

Islamic banking has seen rapid growth in the last decade, with the annual average growth rate of some 10 to 20 per cent and the current global Islamic finance assets stand at US $800 billion. [4] Norton Rose for instance, predicted that the Islamic finance industry would reach US $4 trillion by 2015.[5] The United Kingdom has huge potential on Islamic banking because of its 1.8 million Muslims population and about half a million regular Muslim visitors to the UK and approximately 12 million Muslims living in the EU such as in France and Germany.[6] Although the UK has been providing Islamic Financial Services for 30 years, the recent developments via government support and a favourably regulatory environment has encouraged Islamic banks to set up operations in the UK and has created the largest and most liquid market for Islamic banking product outside the Middle East and Asia.[7] For instance, in 2004, the Financial Services Authorities UK (FSA) authorised the first wholly Sharia compliant retail bank in the West, Islamic Bank of Britain,[8] which then followed by European Islamic Investment Bank[9] to cater the niche opportunities on Islamic banking.

As a result, the UK has become the key Western centre for Islamic banking with over $19 billion in sharia-compliant assets and comes eight in The Banker’s league table of Islamic assets worldwide ahead of other Islamic countries such as Egypt and the highest of all Western countries.[10]

The growth of Islamic banking in the UK

Initially, the increase in demand for Islamic banking is due to combination of sustained high oil prices from Middle East resulted a growth in wealth of a number of Islamic states.[11] Consequently, this has led to greater demand from Muslims especially from those living in Western countries such as in the UK for opportunities to invest in accordance with their personal beliefs and the manner prescribed by the rules of sharia.[12]

In addition, the excess liquidity in Middle East due to sharp rise in oil prices has lead to surge in demand for both conventional and Islamic financial assets. However, the local financial market was unable to accommodate the excess liquidity resulting in a significant spill over into international market.[13] In this case, the UK, with its established history of financial openness, is the suitable alternatives for Middle Eastern investor such as the acquisition of Aston Martin by Kuwait’s Investment Dar for $925 million, using sharia-compliant financing.[14]

Having said that, the FSA and HM Treasury has produced several working papers to identify the recent growth of Islamic banking in the UK.[15] The first reason is because of the strong markets and skills base in the UK due to the London strong history of financial innovation of being willing to innovate and respond flexibly to new idea, which in this case, the idea of Islamic banking.[16] Furthermore, the deep and liquid markets combined with a friendly EU business environment and large pool of legal, accounting and financial engineering skills also have played an important role for the domestic expansion of Islamic finance.[17]

In addition, many international institutions such as Deutsche and HSBC have had regional present in Middle Eastern and South Asian markets for decades, allowing them to develop considerable knowledge and experience of local markets, including Islamic finance.[18] In order to accommodate the rising demand for Islamic financial services, they have established sharia-compliant sections known as ‘Islamic windows’, some of which are based in the UK. Consequently, these Islamic windows have contributed significantly to the development of Islamic finance for the UK market due to these financial institutions experience in product development and access to far greater resources than those available to local institutions in the Middle East and South East Asia.[19]

The final reason is due to the establishment of the FSA in 1997 through combination of 11 different regulators into a single body under a single piece of legislation.[20] This has resolved many of the complications and conflicting views from previous regulatory system and allows the FSA to look across the system as a whole, including the Islamic financial institutions and products.[21] In particular, it will be easier for the government to introduce certain tax and legislative changes specifically designed to promote the development of Islamic banking such as in the Finance Act 2003 that abolished the double stamp duty land tax applicable to Islamic mortgages in the UK.[22]

Definition of Islamic banking

Having seen the development of Islamic banking in the UK, it is important to understand as what is meant by Islamic banking and most importantly, to determine the difference between Islamic banking and conventional banking. Generally, Islamic banking is any financial transactions that adhere with Islamic law (sharia) and Islamic jurisprudence (fiqh).[23] The sharia is not a codified rule of law but consisting of general rules and principles derived from the Quran and the practices (sunnah) and sayings (hadith) of Prophet Muhammad.[24]

Moreover, the general sharia principles relating to Islamic banking has been supplemented by Islamic jurisprudence (fiqh) developed by four main schools of thought in Islam (which are the school of Shafi, Hanbali, Maliki and Hanafi).[25] Thus, this explains the wide range of definitions for Islamic banking range from the very narrow (interest-free banking) to the very broad (financial operations conducted by Muslims).[26]

Main features of Islamic banking

Having said that, any Islamic banking transactions will be based on few main sharia principles such as prohibition on interest (riba), speculation (maisir), uncertainty (gharrar) and the role of Sharia boards.

Prohibition on riba means that it is not permissible to charge, pay or receive interest as Islamic principles require that any return on funds provided must be based on profit derived from a commercial risk taken by the financier. [27] This is because the sharia does not recognise the time value of money and it is seen merely as a means of exchange to create real economic value by investing in a permissible commercial activity that has the element of risk-taking by financier.[28]

Prohibition of maisir in Islamic banking effectively means that under the sharia, contracts which involve speculation which akin to gambling are not permissible (haram) and considered void.[29] The test is based on whether the revenue gained by chance rather than by productive effort. However, the sharia considers the elements of speculation in commercial arrangements, based on the degree of speculation involved and whether the intention of the transaction is to realise a gain from some productive effort or purely speculation. [30] For instance, the speculation involved in conventional over the-counter derivative is not permitted because the gain is being regarded as deriving from chance rather than the necessary productive effort.

The prohibition on gharar or uncertainty is based on Islamic principles of equity and efficiency in transactions.[31] Essentially, the existence of unacceptable gharar, particularly on the fundamental terms of the contract, such as the subject matter, price or time for delivery are considered void.[32] For examples, options, forward contracts and futures and conventional insurance.[33] Conventional insurance for instance, is not permitted on the basis, amongst other things; the gharar exists on the probability of occurrence of the insured event.[34]

The last feature is the roles of sharia boards in Islamic banks or conventional banks with Islamic windows. Sharia boards comprise a number of imminent Islamic scholars or legal practitioners to ensure that the products or the transactions comply with the legal requirement and most importantly, the rules of sharia. [35] Interestingly, under some jurisdictions, Islamic banks or financial institutions with Islamic windows are not required to establish a sharia board.[36] Thus, in some cases, the financial arrangements involving sharia boards may be voluntary to review and approve the proposed transactions as being sharia-compliant. Nonetheless, it is important for them to appoint a sharia board in order to have the necessary credibility with potential investors and customers.[37]

Arguably, these prohibitions in Islamic banking are the main driving force behind the development of modern Islamic banking as Islamic banks must use a different paradigm of financing, namely asset-based financing and profit-loss sharing, which distinguish Islamic banking from conventional banking.[38]

Islamic banking products

With regards to the general principles outlined above, a number of Islamic banking products have been developed such as murabaha (cost plus financing), ijara (lease) and sukuk (Islamic bond) to meet the demands of modern financial transactions.

Murabaha involves the purchase of a specific commodity by a financial institution upon the request of a client. Then, the client purchases the commodity from the financier on a deferred payment basis at an agreed mark-up that is structured to cover the cost of the commodity, the underlying risk and the profit margin.[39] The profit is usually defined in reference to an interest rate index such as the LIBOR (London Inter-Bank Offered Rate).[40] Arguably, the profit obtained is not riba, as the market value of assets and the interest rate index are indicative of one another and this method of determining profit in a murabaha sale is a natural outcome of a dual financial system.[41]

The second type of Islamic banking product is sukuk or Islamic bond. A sukuk is a certificate or note, which represents a proportionate beneficial ownership in an underlying asset for a defined period with the risk and returns associated with the cash flow generated by the asset belonging to the investors (sukuk holders).[42] Besides, the standard by Accounting and Auditing Organisations for Islamic Financial Institutions (AAOIFI) stated that sukuk must be asset backed and subject to sharia compliant contract.[43] Fundamentally, the difference between sukuk and conventional bond is the latter does not give any ownership rights in an underlying asset but a contractual claim against the issuer.[44]

The last product to consider is an ijara contract that allows the transfer of usage of an asset in return for rental payment; as such it is similar to a conventional lease contract. Under an ijara principle, the rent payable must be determined as a fixed sum prior to the commencement of the relevant rental period and it is possible to specify the rate based on conventional benchmark rate such as the Libor, plus a margin.[45]

Conclusion

To sum up, although Islamic banking is a relatively young industry, the industry has been growing at a phenomenal rate, especially as it is making its way into markets with significant Muslim populations but where there is little or no provision of sharia-compliant financial products and services at present.[46] Besides, the market for Islamic products also has potential to attract non-Muslim population as it provides unique alternative to the conventional banking.

Briefly, the reasons for the growth of Islamic banking in the UK are the global expansion of Islamic finance, the markets and skills base in London, the establishment of Islamic window by major international institutions and the formation of the FSA. Having said that, as the UK positions itself for the anticipated worldwide growth of Islamic banking, it is increasingly important to understand the legal position of contracts of Islamic banking products under English law. This is because, mostly, the Islamic banking contracts have reference to English law, with subjects to sharia principles, in the case of dispute of the agreement. Otherwise, the future growth of the industry could be hindered due to the absence of clear legal standing of Islamic banking contracts especially as the UK is becoming the Islamic finance centre in the Europe.

Chapter 2: Sharia principles and English law

Introduction

Generally, there is no requirement in Islam to designate sharia law as the governing law of a financial contract. The basic principle is that the contractual freedom is recognised as long as the contract adhere with Islamic rules and principles.[47] Thus, the common practice is to designate the national law as the governing law of a contract, with the following proviso incorporated: “… for long as it does not conflict with sharia laws”.[48]

Sharia principles and English law

Having said that, there are two main reasons on why the Islamic banking contracts are often constructed with reference to the English law. Firstly, the choice of English law is common in international financial transactions because it provides high degree of certainty for commercial disputes[49] and the international respect for English judges and their decisions.[50] Arguably, the problem with sharia law is that the law is far from a cohesive body of rules because different sharia schools of law take different positions to certain key points in a financial contract.[51] Moreover, the sharia law lacks certainty, as the sharia principles are capable of different interpretation by different Islamic jurists and scholars based on their school of laws. For example, the Shafie jurists such as in Malaysia authorise debt discounting in which Hanbali jurists in the Persian Gulf region may have different views. [52]

Besides, some commentators have argued that the wide interpretation of the freedom of contract principle under English law will enable transactions to be structured according to sharia laws.[53] Under English law, subject to certain limitation, section 2(1) of Contracts (Applicable Law) Act 1990,[54] which gives statutory effect to the Convention on the Law Applicable to Contractual Obligations 1980 (Rome Convention),[55]provides the parties with the freedom to choose the law applicable to their contract. Article 3 of the Rome Convention states:[56]

‘A contract shall be governed by the law chosen by the parties. The choice must be expressed or demonstrated with reasonable certainty by the terms of the contract or the circumstances of the case. By their choice the parties can select the law applicable to the whole or a part only of the contract’

However, later in the analysis of these cases, the Article 1.1 of the Rome convention delimits the parties choice of law to govern their contract to law of a state and did not provide sanction for the choice or application of a non-national system of law i.e. the sharia law. In other words, the sharia, which is not the law of a specific state but rather than a set of general rules as elusive to the English courts as lex mercatoria is excluded by the Rome Convention from being the governing law.[57]

Islamic Investment Company of the Gulf (Bahamas) Ltd. v Symphony Gems NV & Ors

In the first case, the Bahamas-based Islamic Investment Company entered a Murabaha agreement to supply valuable gems to Symphony Gems (SG) - the defendant company, which was incorporated in Belgium.[58] Briefly, Murabaha works through the bank buys the goods i.e. a large quantity of rough diamonds from the supplier, a company called Precious (HK) Ltd in Hong Kong, and re-sells them to the defendant on a deferred basis, adding an agreed profit margin. The defendant then agreed to pay the sale price for the diamonds over three instalments, effectively obtaining credit without paying interest. The mark-up here represents the bank's profit margin, but this is a reward for risk, not merely for providing finance, as the bank owns the goods until the resale occurs.[59] The resale process occurs after the banks paid the supplier (Precious Ltd) the cost in each case, which is US$7.5m and then re-sells them to the purchaser for US$7, 917,450 upon receiving the item.[60] The risk that the bank takes is the probability of default in payment by the defendant as the bank initially takes the title to the commodity, and paid the cost to the supplier before re-sells them to the buyer. This type of agreement is the most popular method of sharia-compliant financing because it is relatively simple to structure and has no element of riba (interest) as the profit margin is justified by the element of risk to the bank.[61]

In a nutshell, the issue in this case concerns with the amount of the balance due by the defendant since the bank already paid the a total of US$15 million to the designated account of the supplier, yet, no instalments had at any time been paid by the defendant as set out in the contract.[62] One of the reasons, because the defendant inclined to keep the liquidity at their disposal for other business purposes and requested to extend the maturity date for another few weeks.[63] The claimant already recovered US$7.5 million from a bank guarantee set up by the defendant but they now seeking action for the remainder of the cost.

To start with, under the term of the contracts, both parties agreed that ‘this agreement and each purchase agreement ‘shall be governed by, and shall be construed in accordance with, English’ law and ‘… the courts of England shall have exclusive jurisdiction to hear and determine any suit …’.[64] In addition, the agreement also includes the purchaser wishes to deal accordance with the sharia law through a Murabaha financing agreement. [65]

As a result, the judge, Mr. Justice Tomlinson, was confronted on three issues on this case; firstly, the application of the Murabaha principles on the agreement. The defendant, represented by Mr. Joseph, argued that the bank could not recover the claim because it is a claim to recover the sale price, and the absence of delivery of the 92,500 carats of assorted rough diamonds has also resulted loss and damage for the defendant.[66] The defendant then submitted their complaints not to the claimant, but to the supplier, Precious (HK) Ltd and received a reply from the supplier, about the payment of USD$15 million by the banks and the delay of shipment due to long execution and sourcing of the roughs diamonds.[67] Nevertheless, the claimant argued that the absence of delivery was justified because of the first instalments was due and the contract did not contain any obligation for the seller to deliver the item before the advance of the US$15 million.[68]

In his judgement, Mr. Justice Thompson did not consider Islamic law in his decision. Instead, the judge viewed the agreement as a normal purchase agreement with two distinct sales, which are from the supplier to the seller and from the seller to the purchaser and agreed with the claimant that the absence of delivery of goods because the purchaser has not made the necessary arrangements.[69] The judge’s view was supported by clause 4.4 in the contract, which stated that the payment by the purchaser, SG, should take place ‘… in all cases notwithstanding any defect, deficiency or any loss or any other breach of any supply contract … by the supplier’, which in this case, the failure the deliver the gems.[70]

Some commentators have argued that if the court were to consider Islamic law in the court, under Murabaha principle, the term releasing the bank from its responsibility will not be accepted.[71] As Murabaha is a purchase agreement, the seller must not get paid until the supplies have reached their destination i.e. the defendant company (SG) and the risk of failure to deliver should be borne by the bank, as sharing this risk justifies the bank’s margin of profits.[72]

The second issue is based on the principles of illegality on the ground that the contract contradicted with the rules of Islamic law. Article 10 (2) of the Rome Convention[73] encourages the courts, in finding the governing law of a contract, to consider the law of the jurisdiction in which the performance take place. In other words, as argued by the defendant, the contract is illegal under Islamic law because it was a law of the land in Saudi Arabia and the contract, at least in part, was to be performed there.

Having said that, the judge rejected the argument because the fact that the claimant’s base of operations is apparently in Saudi Arabia was irrelevant as the only obligation for the sellers was to make payment to Precious, the supplier, to the bank account in Zurich.[74] The court was also informed of the non-Islamic nature of the Murabaha agreement based on an advice from Dr. Yahya Al-Samaan who concluded that ‘… the agreement in issue does not have the essential characteristics of a Murabaha contract’.[75]

As such, both parties agreed to govern the Murabaha agreement without any restrictions or limitation under English law. Briefly, the principle of illegality under English law is defined in the case of Regazzoni v. Sethia.[76] The case established that the illegality doctrine is when both or one of the parties may intend to perform a contract in illegal manner.[77] With regards to this principle, the court declined to accept the illegality defence because the contract did not call for any performance by the sellers in the Saudi Arabia and the agreement was not to be applied in part in a country where sharia law was the law of land such as in Saudi Arabia especially when English law has been chosen to govern the contract.[78]

The final issue in this case is the claim of the ultra vires doctrine. By entering this particular contract, the claimant has contradict the bank’s Memorandum of Association, which stated that ‘“to carry out in a manner which is consistent with Islamic laws, rules, principles and traditions…”[79]. This is because the Murabaha agreement contained the condition to guarantee the payment regardless of any circumstances – which clearly contradicts with Sharia law principle that requires parties to share risk in order to gain profit.

However, the Company Act of Bahamas, where the bank was established, protected the third parties acting in good faith from any limitations in the bank’s memorandum.[80] In fact, the court concluded that having reviewed the documents provided and considered the applicable Bahamian law, found that ‘at the time the Murabaha agreement was executed by the claimant, the company was no longer subject to the ultra vires doctrine… unless it can be proved that the claimant was aware that the contract was ultra vires its objects’.[81]

On the other hand, some commentators argued that the English court has always been reluctant to apply the ultra vires doctrine because it has been considered as a ‘technical rule’ and companies by abusing this doctrine, would use it to avoid their contractual responsibilities which eventually could undermine the unique financial standing of London in international markets.[82]

To summarise, although the agreement in this case stipulated that it was governed by English law subject to compliance with Sharia principles, the court clearly stated that only English law was capable of being the governing law of a contract. This is because the parties agreed to use the English law on the agreement subject to Sharia principles. However, the court would only determine the validity of the contract under the exclusive jurisdiction of English law and it was not for the court to determine the validity of the contract under Sharia principles.[83]

Shamil Bank of Bahrain v Beximco Pharmaceuticals Limited and Others

In the second case, the claimant, Shamil Bank of Bahrain (the Bank), is a bank incorporated under the laws of Bahrain and operates in accordance with the principles of Sharia law as an Islamic financial institution.[84] Accordingly, the Religious Supervisory Board (the Board) is established under the Articles of Association (the Articles) of the Bank to ensure its commercial activities conform to the principles and provisions of Sharia law.[85]

Briefly, the primary role of the Board is to examine on a test basis each type of transaction entered into by the Bank for sharia compliance and later, submit an annual report to the shareholders as provided by the clauses 35 and 36 of the Articles that require the Board of the Directors to ensure that all the investment and other business transactions have been referred to the Board for approval prior of carrying out the transactions.[86] As such, the Board has certified that the activities of the bank, which include the transactions giving rise to the current dispute, that the bank’s business, were in full compliance of the sharia law.[87] This is because, prior to the action taken by the claimant, the defendant had never given any indication to the bank that the arrangement did not comply with the principles of sharia.[88]

Conversely, the first two defendants are Bangladeshi companies (part of the Beximco group) involved in the manufacture, import and export of the pharmaceuticals. [89] The third and fourth defendants are directors of the first two defendants and of the fifth defendant, which is the parent company.[90]

In 1995, the Beximco group wished to raise additional working capital to be used in its commercial activities and after some negotiations, the Bank and the first and second defendants entered into a Murabaha agreement. The structure of the agreement was that the Bank agreed to purchase, through the second defendant acting as its agent, certain goods from specified sellers for immediate onward sale to the first defendant and the parties also entered into a market rate agreement. The first defendant then agreed to pay to the Bank the Murabaha price that included a profit element and if any payment due remained unpaid for any period after its due date, the defendant would have to pay compensation to the Bank.[91]

In April 1996, the parties entered into a second Murabaha agreement whereby the Bank extended a further facility of US$15 million to the second defendant in which, the terms, and the repayment terms were essentially the same.[92]

Later, the first two defendants defaulted on the payments on these two Murabaha agreements, and following negotiations, they entered into the new ‘exchange agreements’ whereby the Bank agreed to discharge the outstanding amount in return for the right to receive unencumbered title to certain assets that currently owned by the them.[93] In addition, for the defendants’ use of the assets, the companies were required to pay a user fee while the third, fourth and fifth defendants would be the new personal new guarantees for them.[94]

Having said that, the dispute then arises due to the default in payment by the defendants on the instalments of the user fee only, which amounted to US$46. 86 million, as the exchange agreement has discharged the earlier Murabaha agreements.[95]

The main argument raised by the defendant was whether on a true construction of the governing law clause, the finance agreements were enforceable only if they were valid and enforceable both in accordance with the principles of Sharia and in accordance with English law.[96] This is because, as part of the terms of the agreement, the parties decided that jurisdiction over any legal action on these Murabaha agreements would be governed by the English law with term of ‘subject to the principles of Glorious Sharia’.[97] The defendants argued that the obligations of the balance due only enforceable if they are enforceable both under English law and sharia law respectively. Furthermore, the defendants claimed that loan was ‘dressed up as a disguise for an otherwise undocumented interest bearing loan’ via the Murabaha principles under the sharia law.[98]

The court at first instance, ruled that the governing law could not be the Sharia because of two reasons. Firstly, even if Sharia law were to be considered in the contract, the judge mentioned that when dealing with the applicable law on the agreement referred to the Article 1.1 of the Rome Convention that delimits the parties choice of law to govern their contract to law of a state and did not provide sanction for the choice or application of a non-national system of law i.e. the sharia law.

Furthermore, the wording of Article 5 of the Rome Convention[99] impliedly excluded the choice of law other than the law of state. The court described sharia law as a set of general rules and principles, which will definitely be excluded by the Convention from being the governing law. As such, the judge also agreed with the claimant’s submission that the words ‘ subject to the principles of Glorious Sharia’ refers to the Bank’s intention to conduct its affair according to sharia principles under the supervision of the Board.[100]

Nevertheless, even the sharia principles in the agreement were to be taken as state law, English law will still be chosen as a governing law because there could not be two separate systems of law governing the agreements. This is because the Rome Convention would not permit a situation where two laws simultaneously govern the question of the questionability of a contract.[101]

In addition, Mr Justice Morrison at first instance, stated that:

‘… It cannot have been the intention of the parties that it would ask this secular court to determine principles of law derived from religious writings on matters of great controversy...’^[102]

Thus, in order for the court to decide a sharia law issue in this case, it needs to have ‘its own view of the position under the sharia law’.^[103] However, the task will be difficult, if not impossible, for a secular court that lacks of required knowledge to apply Islamic law, as Lord Justice Potter observed in his significant speech in the decision of the Court of Appeal in the case, ‘most of the classical Islamic law on financial transactions is not contained as “rules” or “law” in the Qur’an and Sunnah but is based on the often divergent views held by established schools of law formed in a period roughly between 700 and 850 CE’.^[104]

The judge in the court of appeal also mentioned because of varieties of form and content of Murabaha agreements, thus, as long the Bank’s Religious Supervisory Board was satisfied with the nature of the transactions are in accordance with sharia law, that ‘concludes the matter’ and even if the agreements amounted to agreements to pay Riba, the defendants still liable for the principal sums of the transactions.^[105]

To sum up, in both cases, the results would have been totally different if the court had considered Sharia law principles in both agreements. The latter case^[106] shows that court can dismiss the Sharia law to govern the disputed contract due to the difficulty in applying Islamic law by a secular court.[107] Having said that, although the court chose not to recognise the Sharia as an independent body of law capable of governing the relationships between parties, there are few important concessions such as the court recognised that Sharia principles may be relevant to the intentions of parties when entering the contract and the court may have regards to expert evidence from Sharia scholars for advices regarding commercial disputes involving Sharia principles.[108]

Conclusion

In conclusion, with the UK positions itself for the anticipated worldwide growth in Islamic finance, it is increasingly important to understand how the English courts will approach matters where non-sharia compliance is alleged to destroy the essence of the bargain created.

As noted by Dr Akhtar, Governor of the Central Bank of Malaysia, during the Third Annual Islamic Finance Summit in 2004:

“…pre-condition to sustain the continued growth of Islamic banking and finance is a comprehensive legal structure for legal redress arising from financial transactions. The legal infrastructure needs to comprise both effective regulatory and substantive laws … for parties to resolve disputes relating to Islamic financial transactions…”[109]

Having said that, these two cases also illustrated how difficult it is for English courts to deal with disputes involving Islamic law principles due to several issues such as the sophisticated nature of Islamic law and the lacks of any recognised body or agency that the court can consult in relation to Islamic finance principles. Nevertheless, the courts in both cases rely on the Rome Convention as guidance to their decisions. Arguably, the Court decision for sole reference on English law for governing the contracts involving Islamic commercial disputes is ‘pragmatic solution for now’.[110] It is important for the financial services regulators such as the FSA, to establish clear and comprehensive legislative framework involving Islamic banking without compromising its growth. It is suggested that the contracts used by Islamic banks can be incorporated into the English law without the need for Islamic law to be part of English law.[111] As such, the next chapter will analyse whether the current legislatives and regulations frameworks are sufficient for the development of Islamic banking in the UK.

Chapter 3: The regulation of Islamic banking in the UK

Introduction

The hallmark of a well-developed financial infrastructure is a combination of an effective legal, regulatory and supervisory framework, as these factors would underline the stability of the financial system.[112] As such, the rapid growth of Islamic banking and the unique set of religious rules that govern it have given rise to a number of legal and practical issues that affect the providers of sharia-compliant products and services.[113] For the Islamic banking system, the framework needs to be consistent with the requirements of the sharia principles such as the establishment of sharia council, which provides assurance that the strategic direction, the formulation of policies and the conduct of financial transactions are in compliance with the sharia principles.[114]

UK objectives and guiding principles for Islamic banking

As banking regulators, the Bank of England and, from 1998, the FSA have been open to the growth of Islamic banking in the UK for some time. The first important signal was given in a speech by Lord Edward George, then Governor of the Bank of England, in September 1995 at a conference organised by the Islamic Foundation whereby he recognised ‘the emergence of Islamic banking on the international stage’ and the potential supervisory issues due to the unique features of Islamic banking.[115] Later, the issues were taken forward by Sir Howard Davies, Chairman of the FSA, during the Conference of Islamic Banking and Finance in Bahrain on 2003, who told the audience that he had ‘no objection in principle to the idea of Islamic bank in the UK’ as long as the Islamic bank met the FSA’s regulatory requirements.[116] In addition, he stated that a soundly financed and prudently managed Islamic institution would be ‘good for Muslim consumers, good for innovation and diversity in our markets and good for London as an international financial centre’.[117]

According to the report by HM Treasury, the UK’s objectives for supporting the development of Islamic banking are to enhance the UK’s competitiveness in financial services by establishing the UK as a gateway for international Islamic finance and to ensure that everybody, irrespective of their religious beliefs, has access to competitively priced financial products.[118] Therefore, the UK believes that in order to achieve these objectives, there are few key principles to guide the government’s approach which are fairness, collaboration and commitment.[119]

Firstly, under the fairness principle, the UK is not extending special favours, nor is it supporting one minority over another and wishes to see a level playing field established for Islamic finance.[120] The tax and regulatory system should not distort the investors or consumers wishing to choose sharia-compliant products. Besides, the UK believes that many non-Muslim consumers may benefit from an extended choice of financial products as the UK becoming a global centre for Islamic finance.[121]

The second principle is based on the idea of the collaboration between the government, the industry and the third sector to solve the problems facing the Islamic banking in the UK. [122] For instance, the government can support the industry by changing certain regulations to establish a playing field between Islamic and conventional financial products. Nevertheless, there is a limit to what the government can do before the intervention might distort the practices of the market and be anti-competitive. Therefore, a collaborative approach between the Government, industry and the third sector is essential if Islamic finance in the UK is to continue to develop.[123]

The final principle is based on the idea of commitment by the government. Based on this principle, the UK has established the Islamic Finance Experts’ Group (IFEG)[124] and Tax Technical Working Group to promote the industry and engage more closely with the practitioners. Besides, since 2003, the UK has introduced a number of legislative measures to remove tax and regulatory barriers to Islamic banking in the UK.[125] To sum up, the government’s support for Islamic banking is characterised by an approach of equal treatment for both Islamic and conventional banking. On a broader level, the government believes that the growth of Islamic banking in the UK is beneficial to all UK citizens.[126]

How Islamic banks fit into UK regulatory system

Traditionally, the UK government took no steps to accommodate Islamic banking within its body of laws.[127] The FSA operates under single piece of legislation that applies to all sectors: the Financial Services and Markets Act 2000 (FSMA).[128] Briefly, all the financial institutions authorised by the FSA are subject to the same standards regardless of their country of origin, the sectors or their religious beliefs, in line with the FSMA’s six Principles of Good Regulation such as to facilitate innovation and to remove any barriers to entry or expansion within the financial markets.[129] Under section 19 of the FSMA, any person carry on the regulated activity in the UK, must be authorised by the FSA and the breach of the section 19 may be a criminal offence.[130] The activities that are subject to regulation are specified in the Financial Services and Markets Act 200 (Regulated Activities) Order 2001 (RAO) that includes activities such as accepting deposits, insurance and dealing in investments as principal.[131] So far, most of the Islamic applications received by the FSA have been to establish Islamic banks with regards to the regulation under the FSMA and the ROA.[132]

The challenges of regulating Islamic banking in the UK

Having said that, due to the way Islamic financial services and products are structured, there have been a number of hurdles for the regulatory and tax authorities to overcome. As a matter of fact, in applying the FSMA to Islamic banking, the FSA has identified few main areas of potential difficulties relating to Islamic applications such as the regulatory definition of products.

Concisely, the definition of products offered by Islamic firms is a key factor that the FSA will consider as part of the authorization. Although the economic effect of Islamic products may be similar to or the same as conventional products, the underlying structure may be significantly different as Islamic products are based on a set of contracts acceptable under sharia principles.[133] For example, under the Chapter 5 of the RAO, with regards to the accepting deposit, there is an ‘unconditional obligation on the part of a bank to repay the amount received’.[134]

However, the sharia principles prohibit for ‘unconditional obligation’ as it against the fundamental tenet of Islamic finance, which is to ‘share in the risks of productive enterprise’.[135] Thus, the main challenge for the regulators i.e. the FSA, the HM Treasury and the Bank of England if possible, is to apply both the regulatory requirements and that of sharia law.

Alternative Finance Arrangements under the Finance Act

Arguably, the UK government has skillfully created an Islamic sub-economy, by enacting certain legislative and regulatory measures designed to facilitate Islamic financial transactions via the ‘alternative finance”.[136] In the last two Finance Acts in 2005 and 2006 (FA 2005 and FA 2006), the government has introduced a new direct tax code for so-called alternative finance arrangements, aiming to cater the growing Islamic financial market.[137]

The term was first introduced in section 72 and 73 of Finance Act 2003.[138] Previously, when Islamic mortgages on property transactions first arrived on the scene, it would typically attract double stamp duty land tax (SDLT) – once by the Islamic bank and then by the end consumer. Briefly, the SDLT refers to the tax payable on the purchase or transfer of property or land in the UK.[139]

As such, the transactions under this structure would involve the property to be bought and sold twice (that is, the vendor sells to Islamic bank which then, sells to the customer) to ensure that the lender can charge a ‘profit element’ rather than the interest.[140] Consequently, the providers of Islamic mortgages were faced with an additional cost and this would definitely affect the growth of Islamic banking. Hence, the Finance Act 2003 removed this double stamp duty requirement thereby ensuring that Islamic mortgages are treated on an equal footing with the conventional mortgages.[141]

Further developments were introduced under the Finance Act 2005 to equalise the tax treatment of the murabaha (cost plus financing) and the mudaraba (participation financing) with their conventional counterparts.[142] Under the Finance Act 2005, the murabaha and mudaraba arrangements, which are considered to be an ‘Alternative Finance Return’ and ‘Profit Share Return’ respectively, any payments under both arrangements will each be treated as if such payment is one of interest.

Therefore, such payment will be afforded the same rights and obligations as an interest payment under the tax.[143] Then, the provisions in the Finance Act 2007 looked to help facilitate sukuk issuance in the UK, known as alternative finance investment bonds, legislation also seeks to apply the same tax treatment that would be applicable to a conventional debt instrument.[144] To date, the legislative measures largely focuses on amending tax provisions for Islamic financial structures as these contracts typically involve multiple transfer of title in property.[145]

Conclusion

The potential for the future growth of Islamic banking is clear and the government seems to have taken the necessary actions to establish a strong foundation for the growth of Islamic banking in the UK. Besides, the UK authorities’ support for Islamic banking is characterised by an approach of equal treatment for conventional and Islamic finance and both institutions are regulated by the same high standards by the FSA.[146]

In other words, the government’s position on Islamic banking in the UK is ‘no obstacles, no special favours’ while ensuring a ‘level playing field’ between the Islamic finance and the conventional banking. This is because the government believes that the development of Islamic banking in the UK is beneficial to all UK citizens because the consumers have a wider choice of financial products, particularly those whose religious beliefs prevent them from accessing conventional finance.[147] In fact, the entire country also benefits from the success of the UK financial services industry as the leading Western centre for Islamic banking.[148] Having said that, looking for the future, it is suggested that the UK has great potential to continually become the ‘Islamic Gateway’ for the Islamic finance in the Western area and to compete with the other Islamic financial centre around the world.

Concluding remarks

In conclusion, the research shows that the UK, despite being a ‘non-Muslim’ country, has made numerous efforts via the changes on the regulatory and supervisory framework, to accommodate the unique features of Islamic banking transactions. The UK government’s objective for supporting Islamic banking in the UK is to establish Islamic financial centre in London, which in return, the UK will benefits from the further investment, jobs and indirect tax revenues in the economy. [149] Besides, the government also seeks to include a large domestic Muslim minority in the financial marketplace who may involve in the unregulated Islamic financial activities and deprives from the regulatory and consumers protections.[150] To sum up, the UK has played an important part in shaping the role of Islamic banking Western world because of its effective legal system, regulatory and supervisory framework particularly the measures taken by the government to consider the sharia principles for Islamic banking transactions.

However, does the current UK government’s policy on Islamic banking sufficient to further develop the market in the UK? This is because based on the few important findings on the research; there are few areas, which might limit the growth of Islamic banking in the UK. For instance, the second chapter shows that the English courts have been unwilling to apply the sharia law when dealing with the commercial disputes involving Islamic banking transactions mainly because of the Rome Convention that precludes parties’ choice of a non-state body of law as the governing law of their contract.[151] In other words, the English law would still solely govern the contract of Islamic commercial agreement that contained the term ‘according to sharia principles and subject to English law’. Some commentators argued that ‘it is the pragmatic solution for now’, due to the fact of the English laws itself, which may be definitely be incompatible with some of the provision of sharia law. As such, this may due to a lack of flexibility by secular courts to accommodate religious law. Arguably, it is suggested that these decisions might adversely influence some clients of Islamic banks who genuinely wish to adhere with the Islamic principles as the main purposes of the ‘reference to English law’ is because of the certainty that the English law provided and most importantly, the flexibility of the law that allows the contracts to be construed according to the sharia principles.

This is notwithstanding that the mandatory principles of sharia are the pillars on which Islamic finance.[152] Equally, as the judge on the Court of Appeal stated in the Shamil bank case,[153] the quoted words were no more than a reference for the bank to follow the principles of sharia on the transactions but that did not meant that sharia law was applicable to the contract in English court. In fact, the application of sharia principles was still a matter of debate, even in Muslim countries.[154]

In addition, with regards to the public awareness of Islamic banking products, some commentators argued that the regulators particularly the FSA, has not done enough to achieve their objective with regards to the Islamic banks. For instance, there is a common belief regarding Islamic finance that Islamic banks are restricted to the Muslims whereby the reason that these banks have their Islamic title is not due to the religions of their clients but the mechanism of their products.[155]

In addition, compared to the conventional products, the FSA has not taken enough measures to explain the new financial products introduced by the Islamic banks as most of these products are relatively new in the UK and these products tend to have complicated structures, which may be unfamiliar for the consumers.[156] As such, the continuous presence of this presumption may affect the growth of Islamic banking in the UK, as the Islamic banks may not after all, compete on the same ‘fair playing field’ with the other conventional banks.

Finally, on the regulatory front, the last chapter shows that the government has enacted very few regulatory provisions that address the unique contractual features of Islamic finance as found in the provisions of the Finance Act. It may be argued that whether these ‘few changes’ might be able to boost the UK’s position as the leading Islamic financial centre globally.

Finally, should the UK consider introducing a comprehensive legislative framework specifically on the ‘alternative finance arrangement’? Arguably, this will certainly improve the development of Islamic banking as the current ‘few enactments’ may be insufficient to attract potential investments of Islamic finance into the UK’s economy especially if the UK wants to compete with other global Islamic financial centre such as Malaysia which benefits from having a legislation that specifically dealing with the Islamic banking transactions.[157]

Besides, by having a specific comprehensive legal framework on ‘alternative financing’, it allows for the parties of Islamic banking transactions to conduct themselves with the sharia principles, and yet, benefited from the certainty that provided by the English law. In addition, the regulators also need to increase the public awareness on Islamic banking products to ensure that potential consumers are not deterred from subscribing Islamic banking products due to their misunderstanding on the current position of Islamic banking in the UK. As a result, the UK will definitely have a greater opportunity to compete with other major Islamic financial centres in the world.

Bibliography

Books:

1. Maha-Hanaan Balala, ‘Islamic Finance and Law’ (1^st edn, I. B. Tauris Co. Ltd, Wiltshire, 2011)

2. M. Kabir Hassan and Mervyn K. Lewis, Islamic Finance (1^st edn, Edward Elgar Publishing Limited, Glos, 2007)

3. Chris Skinner, The Future of Banking in Globalised World (1^st edn, John Wiley & Sons Ltd, West Sussex, 2007)

4. Saiful Azhar Rosly, Critical Issues on Islamic Banking and Financial Markets (1^st edn, AuthorHouse, Indiana, 2005)

5. Mike Buckel and John Thompson, The UK Financial System; theory and practice (3^rd edn, Manchester University Press, Manchester, 2004)

6. Ibrahim Warde, Islamic Finance in the Global Economy (1^st edn, Edinburgh University Press, Wiltshire, 2007)

Cases:

1. Islamic Investment Company of the Gulf (Bahamas) Ltd. v Symphony Gems NV & Ors (2002) WL 346969 (QBD (Comm Ct))

2. Shamil Bank of Bahrain v Beximco Pharmaceuticals Limited and Others (2003) EWHC 2118 (Comm)

Legislations:

1. Finance Act 2003

2. Finance Act 2005

3. Contract (Applicable Law) Act 1990

4. Financial Services and Markets Act 2000

5. Financial Services and Markets Act 2000 (Regulated Activities) Order 2001

Journals:

1. Jonathan Ercanbrack, ‘The regulation of Islamic finance in the United Kingdom’ (2011) Ecclesiastical Law Journal 69

2. Nima Mersadi Tabari, ‘Islamic finance and the modern world: the legal principles governing Islamic finance in international trade’ (2010) Company Lawyer 249

3. Siti Faridah Abdul Jabbar, ‘Adjudication of disputes relating to Islamic financial contracts in non-Sharia courts: BIMB v Lim Kok Hoe’ (2010) Company Lawyer 94

4. Abdul Karim Aldohni, ‘the challenge of Islamic banking disputes in the English courts: the applied law’ (2009) 6 Journal of International Banking and Financial Law 350

5. Aisha Nadar, ‘Islamic finance: potential implications for dispute resolution’ (2009) Arbitration 296

6. Mohamed Ismail Mohamed Shariff, ‘Specific issues in Islamic dispute resolution’ (2009) Arbitration 213

7. Abdul Karim Aldohni, ‘The UK prudential banking regulation and Islamic banks: has the Financial Services Authority achieved its regulatory objectives’ (2008) Journal of International Banking Law and Regulation 382

8. Atif Hanif, ‘Islamic finance – an overview’ (2008) International Energy Law Review 9

9. Karim Djaraouane, Churi Joseph Serhal, ‘Choice of governing law in Islamic finance agreements’ (2009) International Business Law Journal 115

10. Antony Hainsworth, ‘Retakaful, regulation and risk: developing the Islamic insurance market in the UK’ (2009) 4 Journal of International Banking and Financial Law 193

11. Anthony Hainsworth, ‘Islamic financial institutions and Islamic finance: a new division in the Butterworths Encyclopedia of Banking Law’ (2008) 9 Journal of International Banking and Financial Law 495

12. Antony Hainsworth, ‘New letters of the law’ (2008) 158 New Law Journal 1382

13. Charles Goddard, ‘Finance Act notes: alternative finance arrangements - sections 53 and 54’ (2007) British Tax Review 518

14. Qudeer Latif, ‘Islamic Finance’ (2006) 1 Journal of International Banking and Financial Law 10

15. Richard Iferenta, John Bain and Kelly Eland, ‘An Introduction to Islamic Banking’ (2005) Tax Journal, Issue 808, 24

16. Rodney Wilson, ‘The issue of interest and the Islamic financing alternatives’ (1997) Journal of International Banking Law 23

Publications and Articles:

1. Andrew Cunningham, ‘Role of sharia boards needs modernisation’ Financial Times (London 21 April 2010) accessed 21 Feb 2011

2. Graham Lovett, ‘Islamic finance: when will an English court consider Shari'a compliance?’ (2010) < http://www.cliffordchance.com/publicationviews/publications/2010/03/islamic_finance_whenwillanenglishcour.html> accessed 21 February 2011

3. Ministry of Justice, ‘Guidance on the law applicable to contractual obligations (Rome I)’ (February 2010) accessed 18^th April 2011

4. Norton Rose, ‘The implications for the Islamic finance market of The Investment Dar Company KSCC v Blom Developments Bank Sal [2009] EWHC 3545 (Ch)’ (March 2010) accessed 16^th April 2011

5. Farmida B., ‘The Election Briefing: Islamic finance’ (2010) < http://www.nortonrose.com/knowledge/publications/2010/generalelection/pub27214.aspx?lang=en-gb&page=all> accessed 27 November 2010

6. HM Revenues and Custom, ‘Impact Assessment for Stamp Duty Land Tax, Capital Gains Tax & Capital Allowance tax reliefs for Alternative Finance Investment Bonds’ (London, 2009), , accessed on 24^th April 2011

7. Guardian, ‘What is the London Interbank Offered Rate?’ (17^th August 2009) accessed 16^th April 2011

8. The Banker, ‘Top 500 Islamic Financial Institutions’ (2009) accessed 11 April 2011

9. Reuters, ‘Islamic banks launch standard wakala agreement, eye uniformity’ (Reuters 24 November 2009), accessed on 16^th April 2011

10. Emily B. and Bhasker S., ‘The steady rise of Islamic finance’ BBC News (London 23 September 2009) < http://news.bbc.co.uk/1/hi/business/8270490.stm> accessed 27 November 2010

11. HM Treasury, ‘The development of Islamic finance in the UK: the Government's perspective’ (2008) < http://webarchive.nationalarchives.gov.uk/+/http://www.hm-treasury.gov.uk/d/islamic_finance101208.pdf> accessed 27 November 2010

12. The Economist, ‘Friends and Rival’ (13 September 2007) accessed 13 April 2011

13. Will Rasmussen, ‘Islamic finance demand rising, but depth lacking’ Reuters (Dubai 27 March 2007) accessed 13 April 2011

14. Islamic Bank of Britain, ‘How the Wakala Treasury Deposit Account Works’, accessed on 16^th April 2011

15. Michael A., Ali M., Robert H., Arshadur R., and Ali R., FSA, ‘Islamic Finance in the UK: Regulation and Challenges’ (2007) accessed 5 November 2010

16. UK Trade and Investment, ‘The City: UK Excellence in Islamic Finance’ (2007) URN 07/1657 < http://www.londonstockexchange.com/specialist-issuers/islamic/downloads/ukti-uk-excellence-in-islamic-finance.pdf> accessed 27 November 2010

17. HM Treasury, ‘A Regulatory Impact Assessment for the 2006, Alternative Finance Products’ (2006) accessed 15 November 2010

18. Freshfields Bruckhaus Deringer, ‘Islamic finance: basic principles and structures’ (2006) accessed 18^th April 2011

19. FSA, ‘Islamic Banking in the UK’ (2006) Briefing Note BN016/06 < http://www.fsa.gov.uk/pages/About/Media/notes/bn016.shtml> accessed 5 November 2010

20. Dan Waters, ‘Home reversions and Islamic mortgages get new consumer protections’ (2006) FSA/PN041/2006 accessed 21 February 2011

21. HSBC UAE, ‘About HSBC UAE’, accessed 13 April 2011

22. Speech by Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, ‘Ensuring Stability in the Islamic Financial System’, paper presented at the 3tf Annual Islamic Financial Summit (London, England: January 13, 2004), accessed on 23 April 2011

23. Fazl Syed, ‘Report on Islamic Finance Experts Group (IFEG)’, , accessed on 24^th April 2011

24. Shibeer Ahmed, ‘Shariah law in the English Courts’ (2004) < http://www.yasaar.org/pubs/20259%20Shariah%20Law%20in%20the%20English%20Courts%20brochure1.pdf> accessed on 21 February 2011

25. Speech by Howard Davies, Chairman of the FSA, , accessed on 24^th April 2011

26. FSA, ‘Principles of Good Regulation’, <http://www.fsa.gov.uk/Pages/About/Aims/Principles/index.shtml>, accessed on 24^th April 2011

27. HM Revenue and Customs, ‘Stamp Duty Land Tax (SDLT): the basics’, , accessed on 24^th April 2011

Others:

1. Islamic Finance Council UK (IFC) accessed 27 November 2010

2. Islamic Bank of Britain accessed 12 April 2011

3. European Islamic Investment Bank, accessed 12 April 2011

[1] Abdul Karim Aldohni, ‘the challenge of Islamic banking disputes in the English courts: the applied law’ (2009) 6 JIBFL 350

[2] (2002) WL 346969 (QBD (Comm Ct))

[3] (2003) EWHC 2118 (Comm). The Appeal decision is reported in (2004) 2 Lloyd’s Rep. 1

[4] Farmida B., ‘The Election Briefing: Islamic finance’ (2010) < http://www.nortonrose.com/knowledge/publications/2010/generalelection/pub27214.aspx?lang=en-gb&page=all> accessed 27 November 2010

[5] Farmida B., Ibid

[6] FSA, ‘Islamic Banking in the UK’ (2006) Briefing Note BN016/06 < http://www.fsa.gov.uk/pages/About/Media/notes/bn016.shtml> accessed 5 November 2001

[7] UK Trade and Investment, ‘The City: UK Excellence in Islamic Finance’ (2007) URN 07/1657 < http://www.londonstockexchange.com/specialist-issuers/islamic/downloads/ukti-uk-excellence-in-islamic-finance.pdf> accessed 27 November 2010, p. 2

[8] Islamic Bank of Britain, ‘About Us’, accessed 12 Apr 2011

[9] European Islamic Investment Bank, ‘About Us’, accessed 12 April 2011

[10] The Banker, ‘Top 500 Islamic Financial Institutions’ (2009) accessed 11 April 2011, p. 4

[11] Atif Hanif, ‘Islamic finance – an overview’ (2008) I.E.L.R. 9, p. 9

[12] Qudeer Latif, ‘Islamic Finance’ (2006) 1 JIBFL 10

[13] Michael A., Ali M. and others, FSA, ‘Islamic Finance in the UK: Regulation and Challenges’ (2007) accessed 5 November 2010, p. 9

[14] Will Rasmussen, ‘Islamic finance demand rising, but depth lacking’ Reuters (Dubai 27 March 2007) accessed 13 April 2011

[15] HM Treasury, ‘The development of Islamic finance in the UK: the Government's perspective’ (2008) < http://webarchive.nationalarchives.gov.uk/+/http://www.hm-treasury.gov.uk/d/islamic_finance101208.pdf> accessed 27 November 2011

[16] Michael A. and others, supra n. 13, p. 9

[17] The Economist, ‘Friends and Rival’ (13 September 2007) accessed 13 April 2011

[18] HSBC, ‘About HSBC UAE’, accessed 13 April 2011

[19]UK Trade and Investment, ‘The City: UK Excellence in Islamic Finance’ (2007) URN 07/1657 < http://www.londonstockexchange.com/specialist-issuers/islamic/downloads/ukti-uk-excellence-in-islamic-finance.pdf> accessed 27 November 2010, p. 2

[20]Financial Services and Markets Act 2000

[21]UK Trade and Investment, supra n. 19, p. 2

[22] Section 71 - 73 Finance Act 2003

[23] Qudeer Latif, supra n. 12, p. 10

[24] Atif Hanif, supra n. 11, p. 9

[25] Ibid

[26] Ibrahim Warde, Islamic Finance in the Global Economy (1^st edn, Edinburgh University Press, Wiltshire, 2007), p. 5

[27] Qudeer Latif, supra n. 12, p. 10

[28] Atif Hanif, supra n. 11, p. 9

[29] Qudeer Latif, supra n. 12, p. 10

[30] Atif Hanif, supra n. 11, p. 9

[31] Maha-Hanaan Balala, ‘Islamic Finance and Law’ (1^st edn, I. B. Tauris Co. Ltd, Wiltshire, 2011), p. 26

[32] Qudeer Latif, supra n. 12, p. 10

[33] Mahmoud E.El-Gamal, ‘ A Basic Guide to Contemporary Islamic Banking’, accessed 16 April 2011

[34] Atif Hanif, supra n. 11, p. 9

[35] Atif Hanif, supra n. 11, p. 10

[36] Atif Hanif, Ibid

[37] Atif Hanif, Ibid

[38] Nima Mersadi Tabari, ‘Islamic finance and the modern world: the legal principles governing Islamic finance in international trade’ (2010) Comp. Law. 249, p. 250

[39] Nima Mersadi Tabari, supra n. 38, p. 252

[40] Guardian, ‘What is the London Interbank Offered Rate?’ (17^th August 2009) accessed 16^th April 2011

[41] Nima Mersadi Tabari,supra n. 38, p. 252

[42] Maha-Hanaan Balala, supra n. 31, p. 30

[43] Articles (2) 1 and (5/1/2) 2 of the AAOIFI Shari'ah Standard (17), AAOIFI, accessed 16^th April 2011

[44] Qudeer Latif, supra n. 12, p. 10

[45] Atif Hanif, supra n. 11, p. 112

[46] Atif Hanif, Ibid, p. 15

[47] Karim Djaraouane and Churi Joseph Serhal, ‘Choice of governing law in Islamic finance agreements’ (2009) I.B.L.J. 115, p. 119

[48] Karim Djaraouane and Churi Joseph Serhal, Ibid, p. 119

[49] Nima Mersadi Tabari, supra n. 38, p. 253

[50] Anonymous, ‘Dispute Resolution: England and Wales Prompted as

Jurisdiction of Choice’ (2008) 29, 1 Company Lawyer, p 16

[51] Karim Djaraouane and Churi Joseph Serhal, supra n. 47, p. 115

[52] Karim Djaraouane and Churi Joseph Serhal, supra n. 47, p. 118

[53] Nicholas HD Foster, ‘Islamic Finance Law as an Emergent Legal System’ (2007) 21, 2 Arabic Law Quarterly, p. 173

[54] Section 2(1) of Contracts (Applicable Law) Act 1990

[55] Rome Convention on the Law Applicable to Contractual Obligations 1980 (80/934/EEC)

[56] The Rome Convention, Article 3

[57] Nima Mersadi Tabari, supra n. 38, p. 253

[58] (2002) WL 346969 (QBD (Comm Ct))

[59] Rodney Wilson, ‘The issue of interest and the Islamic financing alternatives’ (1997) J.I.B.L. 23, p. 27

[60] (2002) WL 346969 (QBD (Comm Ct)), p. 14

[61] Maha-Hanaan Balala, supra n. 31, p. 28

[62] (2002) WL 346969 (QBD (Comm Ct)), p. 16

[63] Ibid, p. 19

[64] Ibid, Terms 25 - 26.1, p.10

[65] Ibid, Clause A and B, p. 3

[66] (2002) WL 346969 (QBD (Comm Ct)), p. 18-19

[67] Ibid, p. 18

[68] Ibid, p. 18

[69] Ibid, p. 23

[70] ibid, Clause 4.2(b)

[71] Abdul Karim Aldohni, n. 45, p. 350

[72] Ibid

[73] The Rome Convention, n. 53, Article 10(2)

[74] (2002) WL 346969 (QBD (Comm Ct)), p. 25

[75] (2002) WL 346969 (QBD (Comm Ct)), p. 13

[76] (1958) A.C. 301

[77] (2002) WL 346969 (QBD (Comm Ct)), p. 25

[78] Abdul Karim Aldohni, n. 45, p. 350

[79] (2002) WL 346969 (QBD (Comm Ct)), p. 26

[80] Ibid, p. 27

[81] (2002) WL 346969 (QBD (Comm Ct))

[82] Abdul Karim Aldohni, supra n. 1, p. 350

[83] Karim Djaraouane and Churi Joseph Serhal, supra n. 47, p. 119

[84] (2003) EWHC 2118 (Comm), p. 2

[85] (2004) 2 Lloyd’s Rep. 1, p.4

[86] Ibid, p.4

[87] Ibid, p. 5

[88] Ibid, p. 5

[89] (2003) EWHC 2118 (Comm), p. 2

[90] (2004) 2 Lloyd’s Rep. 1, p.5

[91] Ibid, p.5

[92] Ibid, p.6

[93] (2003) EWHC 2118 (Comm), p. 3

[94] Ibid

[95] Ibid, p. 4

[96] Ibid, p. 5

[97] Ibid, p. 2

[98] Ibid, p. 4

[99] Convention on the Law Applicable to Contractual Obligations (1980), Article 5

[100] (2003) EWHC 2118 (Comm), p. 8

[101] (2003) EWHC 2118 (Comm), p. 10

[102] (2003) EWHC 2118 (Comm), in para 36

[103] Mr Jusctice Khan, ibid in para 25

[104] LJ Potter, (2004) 2 Lloyd’s Rep. 1 para 55

[105] LJ Potter, Ibid, p. 10

[106] (2003) EWHC 2118 (Comm),

[107] Abdul Karim Aldohni, supra n. 1, p. 350

[108] Antony Hainsworth, ‘New letters of the law’ (2008) 158 New Law Journal 1382

[109] Zeti Akhtar Aziz, Governor of the Central Bank of Malaysia, ‘Ensuring Stability in the Islamic Financial System’, paper presented at the 3tf Annual Islamic Financial Summit (London, England: January 13, 2004), accessed on 23 April 2011

[110] Nima Mersadi Tabari, supra n. 38, p 254

[111] Abdul Karim Aldohni, supra n. 1, p. 350

[112] Zeti Akhtar Aziz, supra n. 109

[113] Atif Hanif, supra n. 11, p. 14

[114] Zeti Akhtar Aziz, supra n 109

[115] Michael A. and others, supra n. 13, p. 19

[116] Howard Davies, Chairman of the FSA, (2 March 2003), , accessed on 24^th April 2011

[117] Howard Davies, Ibid

[118] HM Treasury, supra n. 15, p. 13

[119] HM Treasury, Ibid

[120] HM Treasury, Ibid

[121] HM Treasury, supra n. 15, p. 13

[122] HM Treasury, Ibid

[123] HM Treasury, Ibid

[124] Fazl Syed, ‘Report on Islamic Finance Experts Group (IFEG)’, , accessed on 24^th April 2011

[125] HM Treasury, supra n. 15, p. 14

[126] HM Treasury, Ibid, p. 12

[127] Qudeer Latif, supra n. 12, p. 10

[128] Financial Services and Markets Act 2000 (FSMA)

[129] FSA, ‘Principles of Good Regulation’, <http://www.fsa.gov.uk/Pages/About/Aims/Principles/index.shtml>, accessed on 24^th April 2011

[130]FSMA 2000, Section 19(1)(a) and (b)

[131] Financial Services and Markets Act 200 (Regulated Activities) Order 2001 (RAO)

[132] Michael A. and others, supra n. 13, p. 12

[133] Michael A. others, Ibid, p. 13

[134] Financial Services and Markets Act 200 (Regulated Activities) Order 2001, Chapter 5 (2)

[135] Richard Iferenta and others, ‘An Introduction to Islamic Banking’ (2005) Tax Journal, Issue 808, p. 24

[136] Jonathan Ercanbrack, ‘The regulation of Islamic finance in the United Kingdom’ (2011) Ecc. L. J. 69, p. 69

[137] Charles Goddard, ‘Finance Act notes: alternative finance arrangements - sections 53 and 54’ (2007) B.T.R.518, p. 518

[138] Finance Act 2003, Section 72 and Section 73

[139] HMRC, ‘Stamp Duty Land Tax (SDLT): the basics’, , accessed on 24^th April 2011

[140] Richard Iferenta and others, supra n. 135, p. 24

[141] Section 72 – 73 Finance Act 2003, amended by Finance Act 2005, Schedule 8, Part 2

[142] Finance Act 2005, section 47-50

[143] Qudeer Latif, supra n. 12, p. 10

[144] Finance Act 2007, section 53

[145] Jonathan Ercanbrack, supra n. 138, p. 69

[146] Jonathan Ercanbrack, supra n. 138, p. 69

[147] HM Treasury, n. 12, p. 12

[148] Ibid

[149] Jonathan Ercanbrack, supra n. 138, p. 72

[150]HMRC, ‘Impact Assessment for Stamp Duty Land Tax, Capital Gains Tax & Capital Allowance tax reliefs for Alternative Finance Investment Bonds’ (London, 2009), , accessed on 24^th April 2011

[151] Jonathan Ercanbrack, supra n. 138, p. 77

[152] Aisha Nadar, ‘Islamic finance: potential implications for dispute resolution’ (2009) Arbitration 296, p. 299

[153] (2004) All E.R. 1072

[154] Michael A. and others, supra n. 13, p. 17

[155]Abdul Karim Aldohni, ‘The UK prudential banking regulation and Islamic banks: has the Financial Services Authority achieved its regulatory objectives’ (2008) JIBFL 382, p. 383

[156]Abdul Karim Aldohni, Ibid

[157]Central Bank of Malaysia, ‘Islamic Banking Act 1983’, , accessed on 24^th April 2011

Remove system tool virus 2011.

2011-03-04T20:24:00.002Z

I helped my friend to remove system tool virus. the virus wont let you to run applications without popping their window saying they are many malware/virus in your pc and you must buy their software, which is a scam. after googling for hours, this is the best way to delete the file. the idea is you must go to the safe mode ( press f8 while restarting your pc) then, follow this simple instruction. credit to this guy below which I found his comment on youtube:

Hi, this is actually VERY easy to remove, please follow these steps:

1. Boot your system into Safe Mode (Press F8 after the computer first turns on)

2. When in Windows, press the Windows button + R to open a Run window, type in: regedit

3. Browse to KEY_CURRENT_USER\Software\MicrosoftWindows\CurrentVersion\RunOnce

You should see something like: C:\ProgramData\IDFH324980G\IDH3498.exe - make a note of this path and then physically delete the folder, THEN delete the registry key.

4. Finished!

shuffler2j 4 days ago 35

the file may be different but the location will be exactly the same. C - program data (usually its hidden) - delete the file that under run once!. simple as that.

hope someone will find it useful.

Islamic banking disputes in English courts.... chapter 2 of my dissertation

2011-02-21T11:11:00.007Z

salam,

below is the draft for my 2nd chapter. put it here in case sth happened to my Imac. at least, got a back up here. for some reasons, the blog did not include the referencing I have for each points. friendly warning, this is heavy reading. for those interested to know about how English courts will deal with Islamic banking disputes. will they apply Shariah law or otherwise. Happy reading!...

Chapter 2: Critical analysis on Islamic banking under English law

Introduction

The second chapter of the dissertation will focus on critical analysis of the Islamic banking transactions in the UK. The aim of this chapter is to examine the legal principles, which was established by English court based on their judgments on Islamic banking disputes. There have not been any reported local cases as the sector is still relatively new in the UK. However, the English courts have dealt with three international Islamic banking disputes where English law was chosen as the governing law. The three main cases are Islamic Investment Company of the Gulf (Bahamas) Ltd. v Symphony Gems NV & Ors, Shamil Bank of Bahrain v Beximco Pharmaceuticals Limited and Others and the recent case of Investment Dar Co KSCC v Blom Developments Bank Sal.

Islamic banking cases in the English courts

To start with, there are several reasons on why the Islamic banking contracts are often constructed with reference to the English law. This is because of international respect for English judges and their decisions and most importantly, the fact that the wide interpretation of the freedom of contract principle under English law will enable transactions to be structured according to Shariah principle. In fact, there is no requirement in Islam to designate Shariah law as the governing law of a financial contract. The contractual freedom is recognised as long as the contract adhere with Islamic rules and principles.

Besides, due to the presumed high degree of certainty that English law provides for commercial disputes, it is common for Islamic banks using English law as the governing law of their Islamic transactions agreements such as Murabaha, which will be illustrated by these two cases; Islamic Investment Company of the Gulf (Bahamas) Ltd. v Symphony Gems NV & Ors, Shamil Bank of Bahrain v Beximco Pharmaceuticals Limited and Others

Islamic Investment Company of the Gulf (Bahamas) Ltd. v Symphony Gems NV & Ors

In the first case, the Bahamas-based Islamic Investment Company entered a Murabaha (cost plus financing) agreement to supply valuable gems to Symphony Gems (SG) - the defendant company, which was incorporated in Belgium. Murabaha works through the bank buys the goods for the customer and re-sells them to the customer on a deferred basis, adding an agreed profit margin. The customer then pays the sale price for the goods over instalments, effectively obtaining credit without paying interest. The mark-up represents the bank's profit margin, but this is a reward for risk, not merely for providing finance, as the bank owns the goods until the resale occurs.

The issue in this case concerns with the amount of the balance due. Under the term of the contracts, both parties agreed that ‘this agreement and each purchase agreement shall be governed by, and shall be construed in accordance with, English law’ and ‘… the courts of England shall have exclusive jurisdiction to hear and determine any suit …’. In short, as stated on the terms of the contract, ‘the agreement and each purchase agreement made pursuant thereto shall be governed by and shall be construed in accordance with English law’. Having said that, the agreement also clearly stated that ‘the purchaser wishes to deal with the seller for the purpose of purchasing supplies under this agreement in accordance with the Islamic Shariah’.

As a result, the court was confronted on three issues namely to determine the affect of Murabaha agreement on the risk of a failure to deliver, the illegality of the transactions and the application of the ultra vires doctrine. Firstly, with regards to the application of the Murabaha agreement, the defendant argued that its payment default was due to an alleged delivery failure by the supplier. According to Murabaha principle, the seller must not get paid until the supplies have reached their destination (the defendant company SG). This will justify the bank’s margin of profits, as the failure to deliver will be borne by the bank.

However, the judge, Mr Justice Tomlinson viewed the agreement as a normal trade financing transaction where the risk of failure to deliver was borne by the purchaser. The judge’s view was supported by the term in the contract, which stated that the payment by the purchaser, SG, should take place ‘… in all cases notwithstanding any defect, deficiency or any loss or any other breach of any supply contract … by the supplier’. In addition, the clause 4.4 stated that ‘…such payment shall not be conditional upon the happening of any event …’. Thus, the decision was justified because ‘… it is a contract governed by English law…’ and ‘… must simply be construe it according to its term as an English law contract’. Conversely, if the court were to consider Islamic law in the court, under Murabaha principle, the term releasing the bank from its responsibility will not be accepted.

The second issue is based on the principles of illegality on the ground that the contract contradicted with the rules of Islamic law. However, based on the report from two experts, Dr. Yahya Al-Samaan and Dr. Martin Lau, the court was informed of the non-Islamic nature of the Murabaha agreement. Dr. Yahya for instance, after examining the nature and the terms of the contract, concluded that ‘… the agreement in issue does not have the essential characteristics of a Morabaha contract’. Nevertheless, despite this, the court will decline the illegality defence because the English law has been chosen to govern the agreement without any restrictions or limitation. In short, after considering illegality doctrine found in Sethia case - referring to English law, the court found that ‘the defendants do not have arguable defence of illegality’.

The final issue in this case is the claim of the ultra vires doctrine. The Murabaha agreement contained the condition that ‘…such payment shall not be conditional upon the happening of any event …’. In other word, the bank was guaranteed the payment regardless of any circumstances – which clearly contradicts with Shariah law principle that requires parties to share risk in order to gain profit. Moreover, the condition also conflicted with the claimant’s Memorandum of Association, which stated that ‘“to carry out in a manner which is consistent with Islamic laws, rules, principles and traditions…”

However, the Company Act of Bahamas, where the bank was established, protected the good faith of third parties from any limitations in the bank’s memorandum. In fact, the court concluded that having reviewed the documents provided and considered the applicable Bahamian law, found that ‘at the time the Morabaha Agreement was executed by the claimant, the company was no longer subject to the ultra vires doctrine… unless it can be proved that the claimant was aware that the contract was ultra vires its objects’. Furthermore, the English court has always been reluctant to apply the ultra vires doctrine because it has been considered as a ‘technical rule’ that could undermine the unique financial standing of London in international markets. The court also worried for the fact that parties, by abusing this doctrine, would use it to avoid their contractual responsibilities and could impact upon the interests of international commerce.

To summarise, although the agreement in this case stipulated that it was governed by English law subject to compliance with Shariah principles, the court clearly stated that only English law was capable of being the governing law of a contract. This is because the parties agreed to use the English law on the agreement subject to Shariah principles. However, the court would only determine the validity of the contract under the exclusive jurisdiction of English law and it was not for the court to determine the validity of the contract under Shariah principles. Arguably, even if the court were to consider the contract under the Shariah, the contract is still not voidable because of the non- Islamic nature of the Murabaha agreement. Thus, English law shall be chosen to govern the contract.

Shamil Bank of Bahrain v Beximco Pharmaceuticals Limited and Others

In the second case, the lender was the Shamil Bank of Bahrain (the Bank), which holds itself out as applying Islamic principles in the course of its banking business. In common with many Islamic banks, it has a Religious Supervisory Board comprising Shariah scholars, who specialise in Islamic jurisprudence. The Religious Supervisory Board reviews all of the Bank's investments and other business activities to determine whether or not these comply with Shariah.

Beximco Pharmaceuticals Ltd and the other borrowers (together the Borrowers) were Bangladeshi companies involved in the manufacture, export and import of pharmaceuticals to and from Bangladesh.

In 1995 the Bank agreed to provide the Borrowers with a working capital facility. So as not to offend against the prohibition under Shariah of the charging of interest (Riba) the financing took the form of Murabaha contracts under which interest was not payable but with the Bank utilising other techniques to extract profit.

Similar with the previous case, the dispute arises due to the default in payment by the defendants and after the occurrence of various termination events under the agreements, the Bank issued formal court proceedings and made an application to the Court for summary judgment. As part of the terms of the agreement, the parties decided that ‘jurisdiction over any legal action or proceedings arising out of or in connection with this agreement’ and the parties’ choice of law was stated in the following way:

"Subject to the principles of glorious Sharia'a, this agreement shall be governed by and construed in accordance with the laws of England."

In short, the parties had stated that in a choice of law clause that the English law would apply to their contract subject tot the principles of Shariah. As a result, the main issue in this case, is the difficulties imposed on the English court where it is instructed by the parties to consider Islamic law principles. The question before the Court raised by the Borrowers' defence was whether on a true construction of the governing law clause, the finance agreements were enforceable only if they were valid and enforceable both in accordance with the principles of Shariah and in accordance with English law.

The Borrowers' also argued that the effect of the governing law clause was to select English law as the governing law but at the same time stipulating as a condition precedent that the contract would be enforceable only if consistent with the principles of Shariah. While the Borrowers acknowledged that the application of Shariah gave rise to disputes between different jurists as to the content of Shariah itself, they argued that it was uncontroversial that Shariah prohibited interest being charged on loans. As a consequence these Murabaha agreements were invalid and unenforceable because they were in truth disguised loans charging at interest declare it void.

The courts ruled that the governing law could not be the Shariah because of two reasons. Firstly, even if Shariah law were to be considered in the contract, English law will still be chosen as a governing law because there could not be two separate systems of law governing the agreements. Then, the parties themselves had not chosen the Shariah law as the governing law because it was not the law of a country and there was no provision for the application of a non-national system of law. Furthermore, the wording of Article 5 of the Rome Convention impliedly exclude the choice of law other than the law of state, which in this case, Shariah law seems to be understood as a set of general rules and principles, will definitely be excluded by the Convention from being the governing law.

In addition, Mr Justice Morrison stated that:

‘… It cannot have been the intention of the parties that it would ask this secular court to determine principles of law derived from religious writings on matters of great controversy...’

Thus, in order for the court to decide a Shariah law issue in this case, it needs to have ‘its own view of the position under the Sharia’a law’. However, the task will be difficult, if not impossible, for a secular court that lacks of required knowledge to apply Islamic law, as Lord Justice Potter observed in his significant speech in the decision of the Court of Appeal in the case, ‘most of the classical Islamic law on financial transactions is not contained as “rules” or “law” in the Qur’an and Sunnah but is based on the often divergent views held by established schools of law formed in a period roughly between 700 and 850 CE’. As a result, many of the commercial issues are still quite debatable as it is made up of ‘conflicting pronouncements’.

To sum up, in both cases, the results would have been totally different if the court had considered Shariah law principles in both agreements. The latter case shows that court can dismiss the Shariah law to govern the disputed contract due to the difficulty in applying Islamic law by a secular court. Having said that, although the court chose not to recognise the Shariah as an independent body of law capable of governing the relationships between parties, there are few important concessions such as the court recognised that Shariah principles may be relevant to the intentions of parties when entering the contract and the court may have regards to expert evidence from Shariah scholars for advices regarding commercial disputes involving Shariah principles.

Investment Dar Co KSCC v Blom Developments Bank Sal

In the last case, a Lebanese bank, Blom Developments Bank SAL (Blom), provided The Investment Dar Company KSCC (TID) (a Kuwaiti company) with funding totaling approximately US$10million (the Principal Amount) through a wakala (or agency) based deposit / investment structure. The wakala was structured as a 'master' arrangement under which Blom as muwakkil (or depositor) would, from time to time, deposit funds with TID as wakeel (or agent). TID instigated each of these investments through 'investment offers' (i.e. funding requests). TID was required to invest those funds in a pre-agreed manner, and any such investment was to be in accordance with Shari'a.

The intention behind this arrangement was that TID would ultimately return the Principal Amount along with an expected amount of profit based upon an anticipated profit rate for each investment transaction (the Expected Profit). The documentation was drafted so as to create – using a series of complicated contractual provisions – an unconditional obligation on TID to pay the Expected Profit and to return the Principal Amount when required, irrespective of the performance of the investments themselves. This was what Blom expected to receive, subject to non-performance by TID. Similar with the previous two cases, it is quite common for governing cross-border Islamic finance transactions by using English law. Then, TID failed to pay the Expected Profit and to return the Principal Amount at the end of the investment period, which resulted in Blom brought a summary judgment application in the English courts.

Blom’s application was based on two claims which are TID had acted in breach of the terms wakala arrangements and TID held Blom’s funds on trust for Blom. On the contrary, TID argued that is should not pay the Blom a fixed return on deposits invested with it insofar as its constitutional documents prevent it from engaging in forbidden activities and the wakala arrangements did not comply with the Shariah. Then, TID argued that they did not have the proper legal capacity at the outset to enter into the wakala (or agency) arrangements – and that such arrangements went beyond the corporate power and authority of TID and should therefore be considered ultra vires.

Ironically, the TID Shariah board had approved the transaction and even attempted to persuade an English judge that it did not do its job properly. Eventually, the court refused to try the case according to the Shariah as the contract expressly designated English law as the governing law of the contract.

Having said that, some commentators argue that this case can be distinguished from the Shamil bank litigation. In the former case, the Court refused to take into account Shariah principles on the basis that English law should determine on the issue of enforceability. In this case however, the Court expands their view by saying that the decision of the Court also rests upon an analysis of capacity and authority. Thus, they argued that it is necessary to consider the relevant Kuwaiti laws as they apply to TID and to consider underlying issue of Shariah compliance in order to determine whether TID had proper legal capacity.

Conclusion

In conclusion, with the UK positioning itself for the anticipated worldwide growth in Islamic finance, it is increasingly important to understand how secular English laws and regulations will be applied to Shariah-compliant products and services. These three cases illustrated how difficult it is for English courts to deal with disputes involving Islamic law principles due to several issues such as the sophisticated nature of Islamic law and the absence of any recognised body or agency that the court can consult in relation to Islamic finance principles. Arguably, the Court decision for sole reference on English law for governing the contracts involving Islamic commercial disputes is ‘pragmatic solution for now’. It is suggested that the contracts used by Islamic banks can be incorporated into the English law without the need for Islamic law to be part of English law. For instance, the FSA plans on Islamic mortgage requirements to be recognised under English law as Home Purchase Plans. Although the regulation has tried to cater all Islamic finance requirements, the Home Purchase Plan transaction is still part a part of conventional banking regulation, which means in case of disputes the English courts will be applying UK banking regulation, taking into account of Islamic finance conditions – rather than applying Islamic law itself.

Bibliography

Books:

M. Kabir Hassan and Mervyn K. Lewis, Islamic Finance (1st edn, Edward Elgar Publishing Limited, Glos, 2007)

Chris Skinner, The Future of Banking in Globalised World (1st edn, John Wiley & Sons Ltd, West Sussex, 2007)

Saiful Azhar Rosly, Critical Issues on Islamic Banking and Financial Markets (1st edn, AuthorHouse, Indiana, 2005)

Mike Buckel and John Thompson, The UK Financial System; theory and practice (3rd edn, Manchester University Press, Manchester, 2004)

Ibrahim Warde, Islamic Finance in the Global Economy (1st edn, Edinburgh University Press, Wiltshire, 2007)

Cases:

Islamic Investment Company of the Gulf (Bahamas) Ltd. v Symphony Gems NV & Ors (2002) WL 346969 (QBD (Comm Ct))

Shamil Bank of Bahrain v Beximco Pharmaceuticals Limited and Others (2003) EWHC 2118 (Comm)

Investment Dar Co KSCC v Blom Developments Bank Sal (2009) EWHC 3545 (Ch)

Journals:

Jonathan Ercanbrack, ‘The regulation of Islamic finance in the United Kingdom’ (2011) Ecclesiastical Law Journal 69

Nima Mersadi Tabari, ‘Islamic finance and the modern world: the legal principles governing Islamic finance in international trade’ (2010) Company Lawyer 249

Siti Faridah Abdul Jabbar, ‘Adjudication of disputes relating to Islamic financial contracts in non-Sharia courts: BIMB v Lim Kok Hoe’ (2010) Company Lawyer 94

Abdul Karim Aldohni, ‘the challenge of Islamic banking disputes in the English courts: the applied law’ (2009) 6 JIBFL 350

Atif Hanif, ‘Islamic finance – an overview’ (2008) International Energy Law Review 9

Karim Djaraouane, Churi Joseph Serhal, ‘Choice of governing law in Islamic finance agreements’ (2009) International Business Law Journal 115

Antony Hainsworth, ‘Retakaful, regulation and risk: developing the Islamic insurance market in the UK’ (2009) 4 Journal of International Banking and Financial Law 193

Anthony Hainsworth, ‘Islamic financial institutions and Islamic finance: a new division in the Butterworths Encyclopedia of Banking Law’ (2008) 9 Journal of International Banking and Financial Law 495

Antony Hainsworth, ‘New letters of the law’ (2008) 158 New Law Journal 1382

Qudeer Latif, ‘Islamic Finance’ (2006) 1 Journal of International Banking and Financial Law 10

Richard Iferenta, John Bain and Kelly Eland, ‘An Introduction to Islamic Banking’ (2005) Tax Journal, Issue 808, 24

Rodney Wilson, ‘The issue of interest and the Islamic financing alternatives’ (1997) Journal of International Banking Law 23

Publications and Articles:

Graham Lovett, ‘Islamic finance: when will an English court consider Shari'a compliance?’ (2010) <> accessed 21 February 2011

Andrew Cunningham, ‘Role of sharia boards needs modernisation’ Financial Times (London 21 April 2010) accessed 21 Feb 2011

Dan Waters, ‘Home reversions and Islamic mortgages get new consumer protections’ (2006) FSA/PN041/2006 accessed 21 February 2011

Shibeer Ahmed, ‘Shariah law in the English Courts’ (2004) <> accessed on 21 February 2011

FSA, ‘Islamic Banking in the UK’ (2006) Briefing Note BN016/06 <> accessed 5 November 2010

Emily B. and Bhasker S., ‘The steady rise of Islamic finance’ BBC News (London 23 September 2009) <> accessed 27 November 2010

HM Treasury, ‘A Regulatory Impact Assessment for the 2006, Alternative Finance Products’ (2006) accessed 15 November 2010

HM Treasury, ‘The development of Islamic finance in the UK: the Government's perspective’ (2008) <> accessed 27 November 2010

UK Trade and Investment, ‘The City: UK Excellence in Islamic Finance’ (2007) URN 07/1657 <> accessed 27 November 2010

Michael A., Ali M., Robert H., Arshadur R., and Ali R., FSA, ‘Islamic Finance in the UK: Regulation and Challenges’ (2007) accessed 5 November 2010

Farmida B., ‘The Election Briefing: Islamic finance’ (2010) < lang="en-gb&page="> accessed 27 November 2010

Others:

Islamic Finance Council UK (IFC) accessed 27 November 2010

The Alternative Finance Arrangements (Community Investment Tax Relief) Order 2008, section 98 Finance Act 2006

Selamat bertunang Don, and Selamat Kahwin Thaha.

2011-02-10T18:38:00.006Z

Salam,

few good stuffs. congrats to both my good friends who just celebrated their special moments. Don engagement with Dayah, which both from Kisas and Thaha announcement for his marriage somewhere on Apr this year.
Don and Thaha had been my close friends since our time in Kisas. we were classmate back then, till our A-level in Kyuem, and studying in UK. luckily, I still have one more year to go. Don working in CIMB Investment which he really enjoyed and keep asking me to consider joining it this year. While Thaha also having great time in Schlumberger, a MNC company.
Below is Thaha's invitation in case you know him. feel free to ask him invitation card if you want it. below is the detail of the wed.

this pics will do; Thaha and his bro, konvo last year.

Time	26 March at 11:30 - 02 April at 16:30

Location	Dewan Serbaguna Taman Tasik Ampang Hilir (Bersebelahan Tesco Ampang) dan Kampung Tasik Permai, Ampang, Selangor.

Created by:	Thaha Abd Latef, Raihanah Abd Razak

More info	Assalamualaikum dan Salam Sejahtera, Kami dengan berbesar hati ingin menjemput semua sahabat yang mengenali diri kami ke majlis kesyukuran sempena perkahwinan kami yang akan berlangsung pada: Pihak Perempuan: Sabtu 26 Mac 2011 bersamaan dengan 21 Rabiul Akhir 1432H di alamat Dewan Serbaguna Taman Tasik Ampang Hilir, Jalan kedondong, 55100, Kuala Lumpur. Masa : 11.30 tengah hari hingga 4.00 petang Pihak Lelaki : Sabtu 2 April 2011 bersamaan dengan 28 Rabiul Awal 1432H di alamat No38, Jalan permai A, Kampung Tasik Permai, 68000, Ampang, Selangor. Masa : 11.30 tengah hari hingga 4.00 petang Semoga kehadiran anda semua akan menyerikan lagi majlis kami serta mendapat mendapat keberkatan daripada Ilahi. Sekian, Wassalam. Thaha & Raihanah P/S: Sila berikan alamat untuk mendapat kad jemputan. :)

and my best buddy Don. with Dayah.

nothing much, I'm really happy for both of them. wish them all the best!. and Don, looking at your pics, no wonder many people thought you're getting married. as for Dayah. take good care of my best friend here.

when Dayah and friends visit Kisasian in Leeds. membalas kunjungan =)

ended this short entry with quotes for both of you..

"Soul-mates are people who bring out the best in you. They are not perfect but are always perfect for you. " (^-^)

regards.

shazli

Spam mail from Najib Razak dan Keluarga? - breaching cyberlaw.

2011-01-31T01:23:00.007Z

salam, or salam satu Malaysia!

recently, despite the big political turmoil in Egypt, I'm quite shocked to receive an email from my prime minister wishing me Chinese New Year.

	from	Najib Razak dan Keluarga
reply-to		najib@1malaysia.com.my

with respect to my great chinese friends, having my first email from my prime minister wishing me Chinese New Year, which ironically, both of us are Malay and Muslim. It's like China President wishing China citizens Happy E'id Mubarak. and sharing with them his experiences celebrating the day with foods etc. Huh!

Everyone know how political this spam email is. I called it spam email for obvious reasons. I never registered for an update from respected prime minister, moreover a personal email wishing me Chinese New Year. It's more than enough by publishing general wish on his website or his wife which use the govt. domain. Even the Tun Mahathir, I reckoned won't send such random wish to anyone, he will carefully select those particular people celebrating the chinese new year.

Anyway, then, today, lots of people asked me either I also received the email from PM. Huh. so, it's not really a personal email then, I guessed the Prime Minister Office got a bulk of data containing Malaysia email, and send it to us. which theoretically a spam email. what is email spam? E-mail spam, also known as junk e-mail or unsolicited bulk e-mail (UBE), is a subset of spam that involves nearly identical messages sent to numerous recipients by e-mail. -wiki.

the second issue is regarding the online privacy rights. as how important it is in real world, people shouldn't take it for granted on online world as well. everyone has a right to allow people accessing their personal info. the best example is facebook which often being condemned due to privacy issues. Usually, company will use our personal info for marketing purposes. However, there are certain exceptions whereby we must allow for such infringement. Generally, common exception when authorities need to access such crucial information to perform their duties, such as police, investigators etc. However, personally, I studied Cyberlaw during my 2nd year, I never come across such weird cases, in which PM of a country, sending emails wishing people for holiday celebration. hahaha... even greater, when several people receive the same email from their different email accounts. gmail, hotmail, and even university personal email!. how on earth Prime Minister Office get all these data?

anyway, I know a little bit about this area, and although the intention may genuinely be kind good etc, but the method obviously wrong. If such things happened in UK, for sure the PM will be questioned on the House of Common for abusing his position. No hard feeling, maybe this is just a big mistake, but it involves me and many of my friends, so someone has to at least, let them know.

If you asked whether I'm on govt side or opposition side, my stand firmly on either of them. since, my support is based on the individual who represent the constituent. and obviously, I'll give my strong support for MP who fight for people, not misuse their position etc.

Anyway, for those who are 'unlucky' enough not to receive the letter. you can refer to section below.

How disappointing!

Regards,

Shazli

Salam 1Malaysia!

Saya ingin mengucapkan Selamat Menyambut Tahun Baru Cina buat seluruh rakyat Malaysia, khususnya bagi mereka yang akan menyambut perayaan yang penuh dengan kemeriahan ini.

Setiap kali tibanya perayaan ini, saya masih terbayang kemeriahan dan keceriaan yang saya lalui semasa kecil. Sudah pasti saya tidak akan ketinggalan mengikut ibu bapa saya menziarahi rakan-rakan beliau yang berketurunan Cina. Makanan kegemaran semasa musim perayaan ini semestinya kuih kapit, kuih bangkit, tat nanas, kerepek "ngaku" manakala limau Mandarin sering menjadi pilihan utama. Teringat juga, sewaktu kecil adakalanya saya dihampiri oleh rakan-rakan ibu bapa yang menghulurkan angpow. Tetapi sekarang, suasana sudah berbeza. Hidangan sudah berubah, pelbagai juadah seperti sate, ais kacang, mi rebus dan maruku juga disediakan.

Semoga di Tahun Arnab ini, kita akan sentiasa berada dalam suasana penuh kemakmuran, kebahagiaan dan juga dianugerahkan kesihatan yang sempurna.

Selamat Tahun Baru Cina, Gong Xi Fa Cai!

Ikhlas daripada
Najib Razak & Keluarga

Salam 1Malaysia!

Happy Chinese New Year to all Malaysians who celebrate this auspicious event.

Each year as the season draws near I am reminded of the excitement and merriment I experienced as a child during Chinese New Year. Mum and dad would visit our Chinese friends, and I would always tag along. I always look forward to savouring the many delicacies, favorites being kuih kapit, kuih bangkit, pineapple tarts and "ngaku" crackers, with Mandarin oranges always on top of the list. A wide smile would cross my face when I received "angpows" from my parents' friends. Today, the celebrations have grown to include sate, ais kacang, mi rebus and maruku even!

May the Year of the Rabbit bring blessings of much happiness, good health and prosperity always. With new beginnings comes new opportunities and as we usher in the Lunar New Year, it is my sincere hope that you achieve success and satisfaction in all your undertakings. Your accomplishments are reflective of our nation's triumphs, and may we always excel beyond expectations!

Gong Xi Fa Cai!

From
Najib Razak & Family
CONNECT WITH ME

QUICK LINKS
We Have A Date!
View Latest Photos
View Latest Videos
Copyright © 2011 1Malaysia.com.my. All rights reserved.

At last, an update after 5 months. =)

2011-01-24T21:09:00.007Z

salam,

after months of leaving my blog empty without any entry etc, I decided to put something up. many people asked me whether I'm already stop blogging as many people do, since blogging for some of them is like hobby. once you get bored with it, you find something else to, playing games, watch televisions etc. while others take it seriously, is an opportunity to make more money vie advertising etc. and for me, the main purpose of this blog is to share with my family members and close friends my situation in Leeds. How was my study, what I'd been doing etc. Having said that, I'd been using Facebook for that reason, which explained the lacks of update on this blog. Yes, I do have a Facebook account with 50 friends. Quite an achievements! at least for me.

Besides, I'm really occupied with many stuffs since the last entry. the final year of this semester really take most of my time. everyweek about 1500 words law essay to be done, plus the dissertation on the Islamic Banking in the UK, which I'll put the extract here later this month, and exams which just ended last week.

A lot of things had happened for last five months, briefly, I quit my internship early for family reasons. hate to do that but my principle stand for family first than others. better struggling hard for your family rather than for others, at least, to ease their burden a little bit. most importantly, a good friends of mine and others, who after few years fighting cancer, Mas Afzal, passed away last year. I'm still writing an entry from the moment I heard this guy from Kyuem, met him in Ajak's wedding, visit him in Sheffield with special sate I taught him, the brilliant exchanges ideas we had regarding jamaah or usrah in UK, the delicious kek lapis he gave me, and the last opportunity I met him in Pejai wedding. I'm glad I'm able to show him to my mom, since his personality, charisma, kind-humble attitude are something I'll tell people, students in order to inspire them. Al-fatihah to him. May Allah bless you with the best rewards for all the good deeds you'd done Mas.

Afzal is laid to rest at the foot of his grandma's grave in Sungai Marong, Bentong. Pahang. please click here

even during his last few years fighting cancer, he never neglect his responsibilities, in fact his consistently writing on his blog about his thoughts, giving advices and keep asking people to look his situation from bigger perspectives. everyone has different challenges on their life, the most important thing is to remember Allah knows everything, and whatever he decides is best for any of us. I really asked anyone here to follow his blog here. http://masafzal.blogspot.com/. even today, I'm still remember a brief moment I met him, his advices, the great smiles which never fade from my mind. =(

apart from that, my audit group manage to win some presentation. nothing much. we beat over 20 other groups on the topic of Madoff scam, briefly a investment fund scam worth billions dollar.

currently, I'm just start my 2nd semester for final year. got no classes on Friday but will be pretty busy on Tuesday, and some business module workshop. and the dissertation draft which need to be submitted a month from now.

during the bonfire nights at end of 2010

my 2nd attempt to cook nasi tomato. well executed. now I know how easy it is to do it. making sate is still the hardest thing I would say.

with my best buddy from Notts, cha visited me for weird reasons. can't remember but I made sate n sushi for them. and because of Alisya's birthday.

and I made a video with regards to Alisya's besday.

and, finally, the 160cms snowman which we made last winter. nearly 3 hours to do it. glad to see how awesome it is!

anyway, thanks for those new followers. can't believe it's growing from 4,5 people to 40 now. I'll try to find time to keep writing stuff here. thanks.

regards.

shazli

Final Year Modules for LLB Law and Accounting

2010-08-02T08:37:00.003+01:00

slm,

the time finally here, I just registered for my final year modules. I'm doing more business modules compare with law modules ( only dissertation, land law, equity and trusts). most of my business modules will contribute to my professional accounting qualification exemptions. I'm looking forward to do ICAEW qualifications after my degree.

anyway, here is the list of my modules. all the best for all my friends graduating this year. and start their jobs this September. I will definitely enjoy another 'one year of holiday' in UK! =)

Module Enrolment

Teaching Subject Module Credits Title

Period Number

Semester 1 LUBS 3540 10 Auditing & Information Systems

Semester 1 LUBS 3865 20 Financial Analysis

Semester 2 LUBS 3620 10 International Business Finance

Sem. 1 & 2 LAW 3240 20 Equity and Trusts

Semester 2 LUBS 3470 10 Financial Accounting Theory

Sem. 1 & 2 LAW 3270 20 Land Law

Sem. 1 & 2 LAW 3225 20 Dissertation

Semester 1 LUBS 3880 10 Corporate Governance

Total Credits for year of Study: 120

Information as of: 02-AUG-10

when Kakcik visit me June this year. In front of my law school. moving out to new building this Sept. =)

regards,

shazli

Hai Selamat Pengantin Baru.... Pejai and Zaza...3 things I love about Pejai... =)

2010-07-27T18:43:00.007+01:00

slm ,

sorry for the late updates, as so many things happened while I'm having my summer break here in Malaysia. I spend my night helping my parents in Ampang, usual stuff, selling satay, greet customers, exchanging my experiences with them.

last Sunday was really special for one of my friends. he'd been my housemate for two years. really well-known for those studying in Leeds Uni especially students taking medicine. Everyone here know who is Pejai or Saudara Faizal ( as how Abg Razak love to call him).

Pejai really obsessed with sunglasses. same geng with Ulil maa.... =)

Pejai had been a wonderful housemate for two years. He's really kind, friendly, helpful, caring, and so on .... in short, let's say everyone really pleased having him as a friends. In fact, I once talked with Abg Razak bout him, since he'd getting married this summer: Abg Razak said:

" erm, Faizal tu orang ke 22 masuk syurga, baik sungguh perangainya". it is a big compliment from Abg Razak, to show his respect on Pejai. for example, during Friday prayer, while me, Ikhwan, and Ulil went out at 130pm, which was the end of 2nd khutba', as we're looking forward for the English parts of the khutbah, but, Pejai already been there like 1pm every week. Unless he'd busy with clinical stuff.

Ironically, he live just 5 minutes from my house, if you drive, less than 5 minutes then, he'd been my senior since I'm doing ALevel in Kyuem. those times, I still remember he among the few that always in Subuh prayer at the mosque.

anyway, Pejai had done with the wedding stuff. since September last year, I lost count how many times he expressed his concerns about the wedding, because the 4th year medics really tough and the exam bloody hard!... both of us will start our final year this Sept. Pejai is moving out since it'll make stuff easier if Zaza want to pay him a visit. although, I tried really hard to insist him to stay with us after doing CBA analysis on his situation. .. hehehe... kan Acap.

my last day in house at Kelsall Grove, moving out to next street, having pics with my current housemate and our neighbours.

both of us will start our final year this September.

and these are 3 things which I really love about Pejai:

Pejai really concern with making sure that the house, bathroom, living room, kitchen is clean and in great condition. Both of us, plus Acap always stressed out whenever the house's condition was not in our standard. I'll start talking and scolding whoever making the mess, ( usually is Ulil... hehehe... ) and Pejai would kindly cleaning up his mess. washing the dirty dishes or cleaning up the bathroom.
secondly, Pejai love to invite you to the mosque. instead of praying in your room, he never give up inviting us to perform our prayer together in mosque. I think in one day, except for Subuh, which only he and Ikhwan were strong enough to attend the prayer in mosque, all of us, thanks for him, always ended up performing our prayer in the mosque. It'll be quite weird if any of us, missed the prayer at the mosque unless we got classes that day.

always been my right hand whenever preparing sate. thanks Pejai.

finally, about his cooking skills, he really good in preparing tomyam, chicken soup, and masak lemak ayam. only those three are the menus which he godly awesome!. the rest was average....or sucks! he and Zaki tried to bake chocolate cake for my birthday, well, the cake turned from chocolate cake into black-burned cake. but, I'm still happy and really appreciate the cake.

well, to be honest, there are so many things I love about Pejai, it's only those three which I always shared with my mom and my friends. Farewell Pejai. thank you for being a wonderful housemate for two years!

during my 1st year in Leeds. yup, masih kurus ketika itu. 4 person in this pics already married. Jue, pejai, ajak and khairil.. wonder whos the next one gonna be

below are some pics which I took from Zaza's family.

Pejai and Zaza...

semasa nikah. dah practice since dari UK lagi. ntah berapa juta kali aku dengar dia lafaz time dlm bilik. hahaha....

amalan solat sunat nikah yg semakin dilupakan...

sign kontrak nikah. berat ni tanggungjawab. bukan sebarang sign.

semasa bersanding di dewan Au2 baru2 ni.

Lastly, Selamat Pengantin Baru Pejai and Zaza

best wishes,
Shazli

3rd Year LLB Law Accounting and Law Result!.... =)

2010-07-02T18:05:00.003+01:00

MY result come out on 2nd July 2010 but I'm only able to know my result on the next day as I'm really busy with my internship at CIMB Investment.

It's my second day yesterday but then, I started my work at 830am and gone back at 8pm for the past two days. and that was considered early. and to make it more interesting, my table is next to deputy director of my unit. - Islamic Asset Management.

and it's really really interesting and the experiences I'd gained for the past two days really priceless!. everyone really helpful and friendly, I felt like I'd already part of them although it's only my second day there!.

and my previous internship with the SC in Islamic Capital Market help me better in understanding the Islamic Finance in Malaysia.

anyway, sorry for the late update. busy with internship and helping my mom in kedai every weekend.

below are my result for 3rd year. going for my final year next year!. alhamdulillah. I managed to get overall of 2.1.

my business school.

UNIVERSITY OF LEEDS - EXAMINATIONS 2009/10

Name	Mohd Zaini,Mohd Shazli
ID	200329152
Programme of Study	Law & Accounting - 3rd Year
Level	Bachelor of Laws


Semester	Module			Status	Module Title	Credit Value	Mark Awarded	Credit Achieved
1	LAW	2284	01	RE	Advanced Legal Research & Law	10	54	10
3	LAW	2060	01	RE	Criminal Law	30	53	30
3	LAW	2146	01	RE	International Law	20	61	20
3	LUBS	2200	01	RE	Business Finance 2	20	70	20
3	LUBS	2210	01	RE	Financial Accounting 2	20	66	20
3	LUBS	2220	01	RE	Management Accounting 2	20	66	20
Total Credits:								120

so, all the best those graduating this year!. since most of my batches graduating this year.

I still have another one year of 'holiday' in UK. gonna utilise most of it!. =)

Regards,
shazli

Leeds University Malaysian Society (Lumsoc) Picnic 2010 in Hyde Park, Leeds.

2010-06-08T19:30:00.003+01:00

yesterday, the Lumsoc organised the first-ever picnic in Hyde Park, Leeds. Nearly all the members attended the picnic with the exception on those still having exams next week. The event was planned last minute but went really well!. boys are responsible for preparing BBQ chickens and sausage while girls handling cooking rices, noodles etc.

we gathered around 630pm at Hyde Park, Leeds. and i'm really shocked to see around 50 people attended yesterday. since it was planned last minute and I thought even if 20-30 people turned up, I'll considered it as big success! =)

anyway, below are the picture from the picnic yesterday and captions. If you live in UK. go out ! and have a picnic in this nice summer weather. before bloody cold winter arrived again this october.

the chicken. looks delicious. we got 5 different marinated chicken from 5 different houses. i think this most well cook. the rest was fairly done.

the chefs except the guy on the green jacket at the front. he really busy with his new camera rather than helping with the BBQ. arrived early then come out only when we nearly done with the BBQ. kan Ulil?

managed to persuade Pejai to come as well. yeah!. although struggling for exam next week.

the boys. everyone like hungry predator. not even a small pieces of chicken escapes their bites!.

the good girls. they really afraid or shy to ask for more food. since the hungry predators are surrounding the food area. including me who came late.

then, after the feast ended, speech by Mr President.

the president warned guys to spare some food for latecomers and girls. ish2... the boys pretending not listening.

then, we played game whereby a balloon was tied into our leg and we need to stomp balloon belonging to anyone except us.

two finalist. sekali pandang, cam laga ayam seh. haram ni...

surprised to see lubna, ida and faizah!. my former classmate graduating this year from Lancaster Uni. all of us including Don were in same class back in Kisas. 5 AV 10.

so, that's all. everyone happy except me. i'm still hungry. penat masak tapi dapat makan skit je. hahaha....

so, that's all. if you haven't gone out for picnic yet. go now!. at least, eat an apple under a tree in front of your house. or else you'll regret later especially when the winter come back.

regards.

shazli