UK Court rescues resilient murabaha yet again

The High Court in England has deliberated two cases in the past two years with regard to Murabaha contracts, each time reaffirming the freedom to contract using a murabaha. In this case Shamil Bank of Bahrain won a US $50m settlement against Beximco Pharmaceuticals and the Rahman Brothers of Bangladesh, despite unmeritorious claims made by the defendants that Shamil Bank did not adhere to Shariah principles. The judgement will further promote Islamic banking in the UK and deter further unwarranted attacks against Islamic financial institutions from those receiving funds who are later unable to repay. Different sections of a contract can be governed by both English and shari`a law, but enforceability can only be governed by one set of laws. Corporations accessing Islamic finance should consult a shari`a advisory board prior to entering into contracts. There is a need for standard international murabaha contractual regulations, including the freedom to contract and jurisdiction of enfor