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Reproduced with permission from 9 International Legal Perspectives (1997) 25-92, holder of the copyright

Implementation of the United Nations Convention on Contracts for the International Sale of Goods (CISG) under Shari'a Law: Will Article 78 of the CISG Be Enforced When the Forum Is an Islamic State?

T.S. Twibell [*]

I. Introduction
    A. The CISG
    B. The Need for Understanding the Implementation of the CISG in Islamic Countries
        1. Practical aspects
        2. Breaking cultural and political misunderstandings

II. The Emergence and Success of the CISG

III. Implementation of the CISG in Islamic Forums
    A. Introduction
    B. Al Shari'a
        1. The religion of Islam
        2. The structure of Shari'a
    C. Islamic banking and interest under the CISG
        1. Interest under the CISG
        2. Islamic banking
        3. Discussion of the Islamic prohibition of interest and the CISG's acceptance of the payment of interest

IV. Conclusion

Appendix: Variations in CISG Implementation

I. Introduction

The picture of the late King Abdul Aziz Ibn Saud, the founder of modern Saudi Arabia, as he used to preside over his Mejlis is deeply impressed on my mind. One memorable occasion he gave an audience to F. A. Davies, chairman of the Board of Directors of the Arabian American Oil Company (Aramco), in December, 1950. "Give me your hand, Mr. Davies," the King said; and then clasping Mr. Davies' extended hand, His Majesty said to him: "You can have confidence in us because our religion and our law make it our bounden duty to keep our compact with you. I have given you my pledge and my peace ('ahdi wa amani). You walk in the length and breadth of my land and enjoy the same security and protection as my own subjects." [1]

Regions of the world once separated by continents and vast oceans are now growing closer together by a dramatic rise in the level of international business transactions and uniform international law. As one of the most significant petroleum producers in the world, the Arab World [2] has been a long well-known important influence on the global economy and business transactions. As the world becomes smaller and as the United Nations Conventions on Contracts for the International Sale of Goods (CISG) [3] becomes universally implemented, the Muslim World is brought even closer to the Western World. In the United States, a lawyer confronting a sale of goods contractual issue must determine whether the UCC [page 26] or CISG applies. If the CISG applies, the lawyer must also be aware whether CISG implementations will vary according to the forum that decides that dispute. The United States and almost fifty other countries are signatories to the CISG. As influence of uniform law grows over the buying and selling of goods, each state should be aware of possible variances in the implementation of the CISG in forums throughout the world.

This article addresses the potential implications of CISG implementation in Islamic forums. [4] Article 78 provides the focal point for this analysis because it awards parties interest in damages whereas Islamic law, or al Shari'a, [5] explicitly forbids interest. Halacha, Jewish law, [6] also forbids interest, however, when the transaction involves a non-Jewish party, interest can be recognized. [7] As King Saud affirmed, Shari'a rigidly protects non-Muslims in most situations equally as Muslims especially pertaining to contractual obligations; interest must also be forbidden in transactions with non-Muslims. Although this article discusses Shari'a on a micro-level as it analyzes the particular issue of interest, Article 78, and the immediate reality of western lawyers more frequently coming into contact with Islamic forums, it also brings to the surface the macro-concern of alleviating misunderstandings between the Western and the Arab Worlds in the process.

The study of Shari'a's impact on CISG implementation is particulary interesting in comparison with other types of law, such as common law [8] or [page 27] civil law, because religion and secular law are both intimately tied in al Shari'a. [9] Nowhere is the contract more sacred than under al Shari'a and integral to the CISG is the sales contract.[10] Shari'a regards all contracts and law with great respect and observance because

"God is a witness to any contract entered into by individuals or by collectivities; under Muslim Law, any valid contract is obligatory, in accordance with the principles of Islam and the law of God as expressed in the Koran [11]: 'Be faithful to your pledge to God when you enter into a pact.'"[12]

"The contract is the Shari'a or sacred law of the parties."[13] It is Shari'a's approach towards the sacredness of contract that provides the strongest argument that Article 78 will be enforced in Islamic forums. Although Shari'a views contractual obligations and law in a sacred fashion -- a fashion that is perhaps an ancient notion absent from today's modern [page 28] world, a world where King Saud's affirmance of his word to Mr. Davies does indeed stand firm and rigid as it is rooted in a region with rich tradition and ancient law -- it is also very adaptable to time and change and will prove successful on a global level. This adaptability is deeply rooted in al Shari'a itself [14] and will be evident as the analysis contained herein unfolds. When parties enter sales contracts and disputes are heard in Islamic forums, Article 78 will be rigidly enforced as any other article in the CISG and enforced as steadfastly as it would be in any other non-Islamic forum. The near-universal acceptance of the CISG and its effect of bringing the Western world more into contact with the Arab world will provide the opportunity of dismantling some of the myths of both Shari'a and Islam itself.


The CISG is one of the most successful treaties in private international law because of its wide adoption [16] and the corresponding recent growth of international business transactions.[16] As the U.C.C. is almost universal in application throughout most of the United States,[17] the CISG is proving to have similar success on a global scale.[18] A practicing international lawyer should have a firm grasp of the implications of the CISG in international sales transactions to protect and serve the interests of his client.[19] The U.C.C., covering all transactions in goods, is slightly broader in [page 29] scope than the CISG [20] which covers only the buying and selling of goods.[21] The CISG is a superb achievment in modern efforts to promote the unification of international private commercial law.[22] This achievement not only stems from the development and ratification of the CISG itself, but the fact that the CISG covers an area which is the basis for a large portion of international business transactions. Fortunately, in the interest of promoting uniform law,[23] and the uniformity of its application;[24] and despite reservations made by some signatories to the CISG, all signatories have agreed to implement the CISG in a uniform fashion.[25] Because of the many legal,[26] political,[27] cultural,[28] and religious [29] peculiarities of various nations [page 30] and regions of the world, variations in CISG implementation remain through reservations and declarations to certain provisions of the CISG.[30] There has been virtually no scholarly attention paid to the special legal,[page 31] cultural and religious peculiarities of implementing the CISG when the forum is Islamic despite the CISG's enormous impact on international business transactions particularly, within the Middle East. Interestingly, the peculiarities of the CISG's implementation with Islamic signatories [31] are not based on the reservations of those countries because they have made no such reservations. Because of the unique intermingling of religion and law in Muslim countries,[32] it is possible the CISG's applicability might vary despite lack of Article 78 reservations made by the Islamic signatories.

B. The Need for Understanding the Implementation of the CISG in Islamic Countries

1. Practical Aspects

In oil production alone, the Middle East has an enormous impact on international sales and the economy at large. For instance, Arab contributers to European banks "are the second-major source of European market funds" and are even "greater than that of the United States."[33] The buying and selling of petroleum is not limited to massive oil conglomerates, but smaller, farther removed companies as well. A host of other industries fuel the world sales market and economy.

The Muslim World covers a huge spectrum from the sub-Saharan Africa, Central Asia, South and Southeast Asia with "[t]he world's largest Muslim populations . . . in Indonesia, Bangladesh, Pakistan, and India; the newest are in western Europe and the United States."[34] "The constitutional role of Islamic law strongly affects the politics of many countries in Asia, Africa, and the Middle East." Islam is the world's third largest religion. Sixty-nine countries have significant Muslim populations; thirty-seven of [page 32] which have a majority Muslim populations, and twenty-eight countries have Muslims constituting over 85 percent of the population.[35] At least seventeen nations formally adhere to Islam in their Constitutions.[36] "The re-emergence of Muslim and Islamic states in the world community of nations and the adherence of some to Islamic law as a basis of their legal systems [37] emphasizes the importance of understanding the values and attributes of Islam and Islamic law."[38] Although currently there are only three Islamic signatories, Egypt, Iraq, and Syria, this number will likely increase. How the CISG will be implemented in regard to Article 78 will set a strong precedent and serve as a future consideration for future signatories and similar disputes.

Not only is Islam the third most practiced religion in the world, but Shari'a is "one of the three major world legal sytems: Roman [civil] law, Islamic law, and common law."[39] Therefore, an international practioner should be well-aware of the implications of international sales transactions that may fall under the governance of the CISG and the influence of Islamic law (which could possibly vary the application of the CISG [40] in certain circumstances).

A significant factor in assessing CISG variances in the Islamic World concerns the perception of Islam by non-Muslims. The West (and specifically the United States) gravely misunderstands Islam, especially in terms of "Arab" stereotyping,[41] women's rights,[42] human rights,[43] and actions of [page 33] "Muslim-led" governments under the guise of Islam.[44]

Many of the stereotypes are often developed from Christian/Islamic antagonism developed over several hundred years: From when the Arab world was the pillar of science and cultural development to the time of the Crusades and to the recent century when the Middle East experienced the [page 34] colonialism and control of France and England.[45] An Islamic government's behavior could be based on direct mandates deeply and explicitly rooted in the Qur'an itself or it could instead be based on man-made interpretations of the Qur'an with the influences of cultural or political roots. Regardless, the influence of the Qur'an and Islam may not be the ultimate source of authority in deciding legal issues in reality on certain occasions. Lawyers in the West may not be aware of all the cultural and political intricacies of the regions.[46] The issue of interest [47] has not been tested in arbitral tribunals or court systems. However, the fact that Article 78 will be rigidly enforced in Islamic forums is clear. Whether the issue of interest is firmly ingrained in the heart of Islam or is merely a cultural or scholarly phenonmenon, will be a strong factor. Different Islamic countries may apply rules differently depending on how firmly entrenched the issues are in Islam. The interdependence between the Muslim and Christian worlds [48] and the incredible development in international trade on such a scale never seen before in human history will set the stage for Shari'a to demonstrating its adaptability and compatability with Western law.[page 35]

2. Breaking Cultural and Political Misunderstandings

Although the Arab World was once the leader in science, culture, and technology before the Crusades,[49] since, it has been viewed with fear, skepticism, and misunderstanding by the West in its culture and also in the religion it bore -- Islam.[50] The Arab world is still considered to be the focal point of Islam although perhaps only one-fifth of Muslims world-wide speak Arabic. The region is also surrounded by mystery and awe because it has bore all three of the world's major religions and it continues to greatly influence the world today as it has for over two thousand years. The Arab World, on the other hand, views the West and the United States with fear, skepticism, and misunderstanding. This stems from the history of continual interference by the West: From the Crusades, the colonialism by France and Great Britain at the turn-of-the-century; and today when the West has so much control and reliance on the region's crucial oil reserves. The Arabs and Persians [51] are unable to fully control their region without western influence in the forms of aggressive diplomacy, economic pressure, and military force;[52] an influence most Americans have never seen nor felt domestically. This has contributed to further misunderstandings between the West and the Arab world. The West views Arabs (and sometimes [page 36] interchangeably with Muslims) as hostage-takers and terrorists threatening the region's stability. Many Islamic countries view the United States and Europe as the region's ultimate controllers having greater power than they over their everyday lives.

The Iranian hostage crisis at the onset of the Iranian Revolution of 1979 [53] is the best example of the dicotomy of the misconceptions between the West and the Middle East. Today, at press conferences, reporters can still be heard questioning Iranian diplomats and reminding them of the American hostage-taking by Iranian students. This sticks firmly in the minds of Americans when the word "Iran" is mentioned. Americans see the burning of the American flag on television and cannot understand the anger and resentment Iran could against the United States. The statements "What did we ever do to deserve that hatred?" or "Those people must be crazy!" are ones that often come to the minds of many Americans. What many do not understand are the events leading up to the hostage crisis. Great Britain effectually controlled Iran's oil production via the Anglo-Persian Oil Company [54] before the 1979 Iranian Revolution when the Ayatullah Ruhullah Musavi Khumayni came into power and the hostage crisis ensued.[55] Until then, Iran was a close ally with both the United States and Britain.[56] The West strongly supported Iran's long-standing dictator,[page 37] Muhammad Reza Shah.[57]

The Shah was often portrayed as having made efforts in modernizing and westernizing Iran,[58] especially after Khumayni came into power and invoked so-called Islamic "fundamentalism."[59] Although the Shah did make some staunch efforts in modernizing Iran, he did so with dictatorial force [60] which was often cruel and violent.[61] He either executed or had his secret service, the Sadak, murder opposition. [62] Khumayni managed to survive,[page 38] to oppose, and eventually replace the Shah. Women were not only allowed to go without veils or traditional Islamic clothing,[63] but it was outlawed [64] for them not to dress according to tradition[65] Many Iranians were economically and socially repressed [66] sometimes violently[67] When social unrest and protest began in the months before the overthrow of the Shah's government, the Shah used extremely violent means of suppression [page 39] including machine-gunning those leaving the Mosques after daily prayer. The Shah fled to the United States where he eventually died of cancer.

The situation was that of a people violently repressed while being forced to succumb many of their religious values and ways of life to Western influence.[68] The Iranians also associated the Shah with the United States and the West.[69] Thus, they experienced actual bloodshed and social and religious oppression and considered the United States partly responsible.[70] When the students raided the United States embassy and took the American hostages, they purportely uncovered documents implicating the CIA with the internal affairs of the Shah's government.[71]

This description of the situation is not to say that some of Iran's acts were justified or they had the right to take some courses of action they have. However, what it should demonstrate is that Iran and other Islamic states have physically experienced oppression from outside forces or governments over the last several hundred years which still exists today. Misunderstanding between the Middle East and the West and acting on these misunderstandings establishes an environment causing certain groups and "terrorists" to react to these actions and perceptions while creating even more situations causing the West to develop greater misunderstanding and lack of focus on the true causes of unrest and resentment between the two worlds.[72] We must place ourselves in the shoes of an Arab or Iranian.[page 40] How would we react after a situation where the President would have the Marines shoot us as we walked out of our churches? How would we view the countries that supported that President financially and politically? Once we were able to remove this President, how would we react being able to practice our religion without his ultimate control over our religion and our lives? Hence, what sticks out in the minds of many Americans in regard to Iran is the hostages held, yet returned alive. What sticks out in the minds of Iranians is a powerful nation that once strongly supported their violent totalitarian government's oppression of their political and religious freedom. Social, religious, and perhaps, economic oppression still occurs in Iran. In the Persian eyes, it is certainly less oppressive and violent than the Shah's government.[73] The Shah's government, however, was certainly more amenable to siding with United States policy in the region.

Several other issues exist in the Arab world. The Palestinian issue is a major source of political unrest.[74] Some Arabs resent the United States [page 41] on this issue which is rarely viewed from the Arab or Persian [75] perspective.[76] Many Americans think and say such things as, "What are they fighting over now?" or "they have always been fighting over there!" When the truth of the matter is that most of the ancient conflicts always involved the Roman Empire, the Egyptian Empire, European invasions (Crusades) and then the control of the Ottoman Empire in the past century. The so-called "Middle Eastern" culture and history is more integrated with the so-called "European" history than many are aware. Another myth is the Arab/Jewish conflict. The Jews and the Arabs have not always been at [page 42] conflict. The truth of the matter is that Jews generally favored better under Islamic rule than under Christian rule throughout history. The recent conflict is relatively new in history beginning at the earliest towards the end of Ottoman rule in the latter half of the nineteenth century and early twentieth century as Jews around the world began to migrate into Palestine, many of whom have no Semitic ancestry, into an area which had not more than a ten percent Jewish population for almost 2000 years.

The Palestinian issue is also an issue that ruthless leaders such as Saddam Hussein are able to manipulate the attempt to garner popular Arab support. Fortunately, as the Persian Gulf War demonstrated, the Arabs saw through Saddam's attempt to manipulate this sensitive issue. However, it must be pointed out, especially with the plethora of negativity surrounding Saddam in the world, that the situation is partly due to United States policy in the region. Hussein helped expose this hypocrisy. The United States, until the Kuwait invasion, turned its eyes away from Saddam, as it had from more "friendly" countries such as Turkey, Syria, Egypt, Israel, and Saudi Arabia.[77] The perspective of United States policy in the region also bleeds into another area of resentment of the West by the Arabs: The media portrayal of the Middle East in United State's media and the United States "switching sides" for the convenience for our interest even when such regimes such as the Shah or Hussein have committed atrocious human rights violations.[78] [page 43]

Iran may have oppressive its people in many instances. The point is not to state who is right or wrong. The point is to demonstrate that there are two sides of the coin with each side of the coin unable to see the other. Each side's misunderstandings then continue to build on presuppositions and false perceptions that do not in fact exist and false perceptions. Fear and resentment grow needlessly without either side aware of how it all began.[79]

How is this relevant for lawyers in the United States wanting to advise their clients on transactions with the CISG possibly involving Shari'a? Similar to the average person, many lawyers believe the stereotypes Western culture has placed on the Arab World, Islam, and now, Shari'a. In practicing law involving Shari'a, a lawyer best serves his client if he can predict the outcome of business transactions involving Shari'a and understand how to conduct business transactions under Shari'a.[80]

This certainty and understanding begins by removing stereotypical concepts in the lawyer's mind and by realizing exactly what Shari'a is and how it works. Perhaps the legal scholars raising the issue that Islamic countries may not adhere to Article 78 although they signed the CISG acquiescing in Article 78, are themselves basing these questions on stereotypes of Shari'a.[81] This paper thus addresses a question once again arising [page 44] out of a misunderstanding of Islam and Shari'a.

II. The Emergence and Success of the CISG

The massive growth in international arbitration [82] on issues governed by the CISG is largely the result of not only growing discontentment with traditional court systems,[83] but the corresponding massive growth in international business transactions [84] particularly during the past decade.[85] The [page 45] success of the CISG in the decades of effort to promote the unification of international commercial law has corresponded with the simultaneous growth of international trade. In addition, the incredibly successful New York Convention, which has the signatures of almost 100 nations,[86] the CISG is proving to be a similar success, with the signatures of almost fifty nations.[87] The CISG is also much younger -- the New York Convention was first ratified in 1958, and the CISG came into being in 1980.

The CISG came into being after a long struggle since the early 1920s. It was the Italian dictator, Benito Mussolini, who offered the League of Nations support to begin the International Institute for the Unification of Private Law (UNIDROIT), an international body of law promoting the unification of commercial law.[88] Ernst Rabel suggested UNIDROIT begin work on the international sale of goods.[89] In 1935, UNIDROIT developed the first draft of a "uniform law on the international sale of goods."[90] [page 46] World War II halted the work on uniform law, but soon after the end of the War, drafting recommenced.[91] In April, 1964, twenty-eight states approved two conventions which were the Uniform Law on the International Sale of Goods (ULIS) and the Uniform Law on the Formation of Contracts for the International Sale of Goods (ULF) [92] referred to collectively as the 1964 Hague Conventions. However, the 1964 Hague Conventions were not very successful.[93] Few countries signed the treaties [94] and there were many criticisms that the treaties "primarily reflected the legal traditions and economic realities of continental Western Europe."[95] The United Nations Commission on International Trade Law (UNCITRAL) set out to study the 1964 Hague Conventions to improve and reform them hopefully ending up with a product more successful than the first.[96] Finally, after eight years [97] and several drafts after the realization that an entirely new text was needed,[98] the General Assembly of the United Nations convened a conference on a product that is today the CISG. On January 1, 1988, the CISG entered into force.[99] "[E]leven states representing every geographical region and every major legal, social, and economic system," adopted the Treaty.[100] Today,[page 47] court [101] and arbitral decisions [102] are quickly developing the uniform interpretation of the CISG.

III. Implementation of the CISG in Islamic Forums

A. Introduction

This section provides an overview of very basic issues on Shari'a. It will educate and provide an overview for the reader unacquainted with Shari'a. It will also provide a basis for understanding the relationship between Shari'a and the CISG and how this relationship may affect the enforcement or implementation of Article 78.

B. Al Shari'a

With Islam being the world's third largest and fastest growing religion, Islamic law has a vital impact on legal transactions and daily life throughout the entire world. Unlike other areas of law, such as common law or civil law which today cover mostly secular activities,[103] Islamic law covers both secular and religious activities.

Shari'a first evolved during the 7th century in the Arabian peninsula and lower Mesoptamia (Iraq today) during the Christian era.[104] As the Arab Empire expanded, "Islamic law spread from Spain to Central Asia.[105] As late as the 17th Century, Islamic law experienced one of its latest flowerings [page 48] in the Indian sub-continent under the Moghuls."[106] Shari'a influenced areas that were never subject to Arab authority even at its most extreme expansion to Indonesia and Africa.[107] It is this spread which has led many to believe that "Islamic law is indeed a major world legal system."[108]

Before delving into the basic structure of Shari'a, a brief overview of Islam itself will be helpful to the reader unacquainted with Islam, giving some understanding of the basis of Shari'a. Further, this section will provide a basis for lawyers to understand differences between the different sects of Islam. For example, when a lawyer encounters an issue with one jurisprudential sect of Sunni Islam, he will understand the principle differences between that sect and a situation with a Shi'a Islam school of jurisprudence thereby eliminating perhaps even some stereotypes the various sects of Islam have of each other -- as Catholics and Baptists may have stereotypes of each other.

1. The Religion of Islam

"Islam" literally means "to submit to God." A "Muslim," or follower of Islam, means "one who submits."[109] Islam,[110] in its most basic and earliest [page 49] form, is the religion of those who believe in God or "Allah." The same religion with the prophets Adam and Noah as are in the Judeo-Christian tradition.[111] Islam mainly centers on Abraham as the central figure -- more than a prophet, but "the central figure in the development of God's relation with His human creation."[112] Islam as it typically is understood today, refers to the more recent phenonmenon of the religion with its tenet asserting that the Prophet Muhammed is Allah's last prophet. Islam regards Judiasm as the first wave of the religion and Moses as a prophet who led the Jews. Next was Jesus in the second wave with Christainity. Islam regards Jesus as a prophet but not divine. Then the final wave came with Mohammed, who is seen as the last and final Prophet with God's message.[113] All three of these prophets the thousands of other prophets [114] named in the Qur'an, Bible, and Torah share equal status and none is more important than the other. For Islam regards all the prophets equally because they carried the same message from God to man.[page 51]

The Qur'an, sometimes "Koran,"[115] is the Islamic equivalent of the Judeo-Christain Bible as the "ultimate" "holy" book of the religion.[116] Islam considers the Qur'an to be the final set of revelations from God while the Old and New Testaments are not "holy," but rather, mistranslated [117] after being passed down through a series of authors over a long period of time in a wide variety of circumstances.[118] Al Qur'an is the revelation given to Mohammed by God through the Angel Jibril (Gabriel).[119] It contains 114 Surahs, or chapters with 6226 verses.[120] "The style of expression underlying the Qur'an is a curious blend of poetic rhymed prose and a lyrical flow, familiar modes of expression to the pre-Islamic Arab."[121] Jinass is the proper Arabic term rather than poetry. Islam is based on the [page 52] Qur'an.[122] The Qur'an is the heart of Shari'a.[123] Unlike the Bible or Torah, the Qur'an has remained virtually unchanged since its inception. It was translated by one author, Mohammed, and the original Arabic language has not changed its meaning and has in fact helped preserve the Arabic language so that it is found in its ancient form even today. All versions of the Qur'an are said to be identical and thus, study of the legal mandates of the Qur'an are easy to ascertain without argument on the content of the original text. Argument on what the Qur'an states on a matter then merely resides on the interpretation of the text. It is helpful to point out Islam's similarities with Christianity and Judaism to ease the reader into becoming better acquainted with Islam and help the reader feel more comfortable in understanding Islam -- the basis of Shari'a.

Islam recognizes all of the same prophets as Christianity and Judaism, including Adam, Abraham, Moses, and Jesus, Isaac, David, Joseph and Noah. Many of the same stories are told in the Qur'an as well (such as the story of Eden), though there are some variances.[124] Adam and Eve took a bite of the forbidden fruit at the same time and they were both created from the same dust rather than Eve from Adam's rib.[125] Mohammed performed no miracles as many of the previous prophets. The only miracle performed is considered to be that of the revelations and manner of the Qur'an itself. The Qur'an is held to be a miracle because it seems to perfectly outline a recipe for human happiness in all aspects of human spiritual and daily life while being organized in beautiful jinass that is in of itself a truly remarkable [page 53] piece of literature.

Moreover, some argue, despite the lack of scientific knowledge in life processes at the time, the Qur'an seems to explain processes and proper behavior from a scientific viewpoint. For example, human birth is explained similarly to human embryonic development. Humans developed from a tiny "clot" reminiscent of an atom or fertilized cell the Qur'an states. Many Muslims assert that the Qur'an includes other scientific facts, some of which are still undiscovered by science in fields such as physics, sociology, astronomy, philosophy, history, psychology and education. The Qur'an covers all aspects of human life from guidelines to the proper spiritual path to specifics such as proper hygiene, proper dress, and even some guidelines on business transactions.

Essentially, to be considered a "Muslim," one must submit himself to God. More formally, a Muslim must follow the Five Pillars of Islam. These Five Pillars are basic requirements to be a Muslim and are helpful in understanding the basis of Islam. The First Pillar is that one must believe in one God and that Mohammed is his final prophet. The Second Pillar is that one pray five times a day. The Third Pillar is that one fast in the month of Ramadan, the holy month in which Mohammed had the Qur'an revealed to him.[126] Muslims must not drink or eat from sunrise to sunset. The Fourth Pillar requires a Muslim, when able, to donate a percentage of his surplus of expenditures to the poor. This is called Azakat." It is usually around 2.5 percent. The Fifth Pillar requires once in one's lifetime, if able, to make a pilgrimage to the Holy City of Mecca. While there are more detailed practices of Islam, the Five Pillars are the basics.

There is another practice in addition to the Five Pillars called the jihad which means "striving" or "exerting oneself" in the way of God. Often, jihad is translated to mean "holy war." Jihad has nothing to do with spreading the word of God by force or violence.

What the Koran does say (ii. 190) is: "And fight in the way of Allah against those who fight against you but be not aggressive. Surely Allah loves not the aggressive." Fighting is clearly limited to fighting in defense.[page 54] The only apparent exception are in Koran ix. 5 where the context of the command to "slay the idolater" show that the reference is to idolatrous tribes of Arabia assembled at the Pilgrimage, who had first made agreements with the Muslims and then violated them as in Koran ix, 29 where the Faithful are enjoined to fight "those who have received the Book (i.e. Jews and Christians) but "believe not in God nor in the Last Day." Nowhere does the Koran command Muslims to propagate their faith by the sword.[127]

The Qur'an also explicitly recognizes Christianity and Judaism.[128] The Qur'an states: "Surely those who believe and those are Jews, and the Christians, and the Sabrams, whoever believe in Allah and the Last day and does good, they shall have the reward from their Lord, and there is no fear [page 55] for them, nor shall they grieve."[129]

One other important fact about Islam that should be understood before looking at the basic structure of Shari'a is the different sects of Islam which have differing views of Islamic practice outside of the Five Pillars as well as differing views of Islamic jurisprudence. As Christianity has different sects such as Catholics, Baptists, and Protestants, Islam has different sects as well. There are two major sects in Islam: Sunni [130] and Shi'a.[131] The Sunni comprise approximately 85 percent of the Muslims world-wide. Shi'a Muslims comprise most of the remaining 15 percent. Shi'a Islam is predominate in Iran (formerly Persia) and significant Shi'a populations also exist in Lebanon, Syria, Yemen, eastern Arabia and Pakistan.[132] Although the government is run by the Sunni, the majority of Iraq's population is Shi'a.[133]

The main difference between the two sects is that the Shi'a believe that Mohammed chose a successor before his death, his son-in-law, Ali ibn Abi Talib. After Mohammed's death,[134] the Muslim community was "in a [page 56] state of confusion and despair. Muhammad had no sons."[135] Without any reliance on "traditional" or "legal" reasons for succession but with much arguing over the succession of Mohammed, Abu Bakr was successful in becoming the Caliphate, or Khalifat rasul-Allah, of the Muslim community.[136] At the time Ali reluctantly submitted to this authority. Only one month later, Abu Bakr died and was replaced by the Caliph Omar.[137] Omar was assassinated by a Persian slave and replaced by Othman who was chosen by a council of a powerful family.[138] This led to the great schism in Islam between the Shi'a and the Sunni. "Othman was incapable of maintaining the disciplined and centralized state that had been created by his predecessor." This state of chaos led to a tribal revolt and Caliph Othman was murdered in 656.

"[Mohammed's] natural successor seemed to be Ali, first cousin of the Prophet and husband of his daughter Fatima." However, Ali was opposed by the powerful Umayyads. Ali won several battles leading to his control of Iraq. Finally, Ali was defeated by Muawiya of Syria with the help of Amr, the Egyptian conqueror. The fighting stopped and some efforts toward arbitration were made. However, Ali did not accept the decision reached by his representatives and dissention grew within his group.[139] He was assassinated by a member from another splinter group,[140] the Kharijites.[141] Many continued to believe in Ali and his descendants and that [page 57] Muawiya and the Umayyad successors were usurpers to Islam. These are the Shi'a today.[142]

This is the principle difference between the Shi'a and the Sunni -- disagreement on the succession of Caliphs after the Prophet. At the time, the schism was primarily a political difference rather than a religious principle. Of course with this difference, many other minor variances developed.[143] Although the Caliph is the successor of Mohammed, he is by no means on equal footing as the Prophet.[144] He serves in no capacity as a prophet or supreme role in Islam.[145] Rather, the Caliph serves as a symbolic focal point in the Muslim community for guidance on more specific issues and in interpreting the Qur'an and leading the Muslim community. There are no priests or hierarchal structure in Islam.[146] Often Mosques will have "Imams" who are elected by the members of the Mosque to lead prayer and serve in spiritual guidance. The Imams could be equated to professor who has more knowledge than his students and with an expertise in a certain area, but everyone is on equal footing unlike perhaps rabbis in Judaism or priests or nuns in Christianity.[147] However, realistically, there perhaps is a [page 58] hierarchal structure that effectually exists.[148]This is usually from Muslim scholars who focus their lives on reading and interpreting the Qur'an, the Hadith and other texts and evidences who are referred to by the Muslim laymen. Particularly with Shi'a Islam, anyone who reads and studies Islamic texts to a certain degree, may be qualified to interpret the Qur'an and Hadith as they believe it should be interpreted.[149] Therefore, in Islam, and in particular, Shi'a Islam, knowledge of the Qur'an and knowledge for its own sake are deeply ingrained aspirations for a Muslim.[150]

2. The Structure of Shari'a

Shari'a is composed of three components in the following order of importance: the Qur'an, the Sunnah, and scholarly opinion or customary practice;[151] sometimes collectively referred to as the "Shari'ah evidences."[152] The core constituent of Shari'a is the Qur'an [153] which forms the basis of all Islamic religious and legal behavior. Shari'a makes no distinction between religious and secular behavior [154] -- all behavior and transactions [page 59] are covered by Shari'a.[155] The vast amount of Shari'a covers secular [page 60] activity. The second source of importance in Shari'a is the Hadith, or the Sunnah which is the written example of the Prophet Mohammed.[156] It clarifies and guides for many issues that the Qur'an leaves unresolved.[157] The third source in Islamic jurisprudence is al ijtihad.[158] Al ijtihad, the science of interpretation and rule-making, is based on the principle that if the Sunnah and Qur'an are silent on an issue, local custom and scholarly opinion may be used as long as they are consistent with the Qur'an and the Sunnah.[159] "In the legal arena, this meant that it was permissible to supplement religiously-based law with customary law."[160] The bulk of Shari'a is based on al ijtihad.[161] Different scholars, societies, and groups within societies often disagree with al ijtihad.[162] [page 61]

Over time, several schools of jurisprudence developed. The five main schools of thought are the Hanafi,[163] Maliki, Shafi'i,[164] Hanbali, and Ja'fari schools of jurisprudence.[165] The Ja'fari school [166] of jurisprudence [167] is adopted by most Shi'a [168] while the other four are Sunni schools of jurisprudence.[169] [page 62] These schools primarily differ in their interpretation of the importance of the ijtihad, the components of the ijtihad or ijma,[170] the importance of how certain individuals interpret the ijtihad,[171] and perhaps the [page 63] criteria of the Sunnah.[172] Shi'i, for instance, will not act or follow any Hadith that is contrary to the Qur'an [173] and believe that if "the believer is competent and capable according to Islamic requirements to analyze the texts, then he can exert his own judicial effort to interpret the issue and abide by his own ruling."[174] The Sunni rely on the compilation of writings written by the founders of the jurisprudential schools.

The schools have an important influence over almost all religious issues including the issue of interest. The schools exist in sometimes uneven patterns through regions and are spread in varying proportions even within the states themselves.[175] Thus, it is often difficult to determine which Islamic [page 64] country adheres to a particular school because so many schools may exist within a state and may have varying levels of impact on a state's domestic law although one school may tend to dominate. Individuals are given much freedom in choosing the particular school they wish to follow.[176]

As one may expect, scholars from different societies, and even from the same society, disagreed in their itjihad. No doubt then that some of them were wrong at times. But so long as the ijtitad was based on (linguistic and religious) knowledge, and was conducted piously and in good faith, then the mujtahids (those who engage in ijtihad) did not have to fear retribution from God. In fact, in a famous Hadith, the Prophet stated that a mujtahid who erred in ijtihad would even be rewarded by God, presumably for exerting the effort to reach the correct answer. Individual Muslims who were not mujtahids were free to select the school of jurisprudence they found most convincing and follow its guidance. Islam guaranteed for each individual the freedom of choice in such matters because ultimately, each [page 65] Muslim will have to account personally to God from that individual's own choices.[177]

Usually, Muslim countries adopt the ijtihad of one of these schools as the law of their country.[178] "Syria, Egypt and Jordan have adopted the Hanafi school of jurisprudence, while Morocco, Algeria and Kuwait have adopted the Maliki school."[179] Incidently, Syria and Egypt are both signatories to the CISG. The Hanifi school has also been heralded as the most authoritative because the Ottoman Empire [180] embraced the Hanafi school and many of the court decisions deciding issues from the other schools of thought were held in principle cities in the Ottoman Empire.[181] It has been said that only "by virtue of the ijtihad of jurists that Shari'a exists at all as a body of positive rules."[182] Note Professor Weiss's assertion about Islamic law requiring the work of jurists:

"The Islamic tradition places great emphasis upon the centrality of the Holy Law, or Shari'a, in the good life. At the same time, it affirms with equal emphasis that the Holy Law is not given to man ready-made, to be passively received and applied; rather, it is to be actively constructed on the basis of those sacred texts which are its acknowledged sources. The Holy Law is the totality of rules which God has laid down for the governing of Man's behavior; it is the aggregate of ahkam Shari'ya. Though ordained by God, few of these rules have been precisely spelled out for man's convenience; rather, man has the duty to derive them from their sources. In the standard Islamic metaphor, the rules themselves are "branches" (furu') or "fruit" (thamara), which grow out of "roots" (usul), that is, from the sources. Only [page 66] the roots are given; the branches, or fruit are not -- they must be made to appear; and for this to happen human involvement -- we may call it, in keeping with the above metaphor, human husbandry -- is required."[183]

The authority of the jurist is derived from the authority of God but there is no authority in the jurist himself. [184] Recall that Muslim jurists are not authoritive in their own sense because under Islam there are no clergy people and all are equal.[185] Thus the authority of the jurist stems from his Ijthad [186] and Shari'a can therefore be susceptible to much change.[187] All the schools of jurisprudence are similar in their adaptability to change.[188] The properties of the ijtihad and how Shari'a is consumed in its total volume of ijtihad in comparison to pure Qur'anic law, allow Shari'a to undergo much change.[189] Professor Badr recognizes that Shari'a is not a body of positive law, but much more abstract:

"Like Common law, Islamic law is not written law. In the writings of Muslim jurists, these rules of law are rarely set forth directly and in abstract terms the way they are in a code elaborated in the civil law tradition or in a statute enacted in a common law [page 67] country."[190]

The rules [of Islamic law] are more often expounded in connection with specific cases and the deduction of a generally applicable rule expressed in abstract terms would call for a more or less full survey of the existing case law.[191]

Before getting into more specific and general principles of Shari'a, it is important to understand an important concept in Islamic jurisprudence. Because of the relation and basis of Shari'a on the Qu'ran, it is in one way rigid, powerful and ultimate. As King Saud shook Mr. Davies hand, the King's word was firmly entrenched on a solid religious ground. However, Shari'a is also a flexible, adaptable body of law developed in large part by Muslim jurists in their effort to interpret what little of the Qur'an and the Sunnah exists on "law." Hence, much of the so called "religious" tone of Shari'a is minimal. The coverage of both religion and secular law in Shari'a is what causes it to be termed "religious," whereas other systems of law such as common law and civil law systems deal exclusively with secular matters.[192]

There are actually two components to Islamic law. The first is Mu'amalat meaning "transactions," the branch dealing with the same traditional legal matters as the common law and Roman law systems.[193] Second, there is the Ibadat, meaning "ritual," which deals with purely Relgious matters.[194] The Muslim jurist must be well-versed in both Mu'amalat and Ibadat.[195] The Mu'amalat branch is for the most part man-made and has little [page 68] or no "pretense to being a religious law except that it may be said to lay more emphasis on moral considerations than is usually the case with other legal systems."[196] The portions of the Qur'an that actually deal with law are minimal.[197] "The Qur'an is far from a legal code. Out of 6237 verses, only 190 verses, or 3 percent can be said to contain legal provisions which mainly pertain to family law and inheritance."[198]

C. Islamic Banking and Interest Under the CISG

1. Interest under the CISG

Article 78 of the CISG presents the issue of interest: "If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under article 74."[199] This is the only article and provision directly addressing interest.[200] Since the CISG only states whether a party is entitled to interest in calculating damages without precisely defining what that rate of interest should be;[201] if the interest rate is not defined by the parties in [page 69] the sales contract, then the court, via private international law, or conflict-of-law analysis, applies the law arrived at through these analyses to precisely define the interest rate.[202] "The purpose of this provision is to make a distinction between interest and damages and to give compensation for the financial loss due to the mere fact that delay in payment has a financial cost" and "to prevent the debtor from taking advantage of the funds withheld."[203] [page 70]

The interest issue in the CISG itself is very brief, and perhaps vague, because during the legislative history of the Convention, there was controversy over this issue.[204] Some court decisions have deemed it so vague, that in fact, it is seen as a gap.[205] Nevertheless, interest is a remedy under the CISG.

Some commentators have asserted that the issue of interest may not be enforceable in an Islamic forum [206] despite the fact that the Islamic signatories have no reservation on the issue.[207] However, other commentators assert the obvious proposition that these countries have acquiesced to the issue of interest by signing the CISG,[208] and therefore, despite domestic law to the contrary,[209] the issue of interest is enforceable against parties in Islamic forums. Since no arbitral or court decision has addressed this issue and the question has been raised particularly when Islamic countries do not recognize interest, the issue shall be explored. A brief overview of Islamic banking and Islamic views of interest will be provided, then Shari'a's prohibition [page 71] of interest in light of the CISG's recognition of interest will be discussed.

2. Islamic Banking

Although Arab banking began in the 19th Century,[210] Islamic banking is actually a recent phenomenon [211] which began in the 1970s.[212] Egypt was the place of the "first modern experiment" for Islamic banking and was undertaken "under cover, without projecting an Islamic image,[213] for fear of being seen as a manifestation of Islamic fundamentalism which was anathema to the political regime."[214] "These banks, which neither charged nor paid interest, invested mostly by engaging in trade and industry, directly or in partnership with others, and shared the profits with their depositors. Thus, they functioned essentially as saving investment institutions rather than as commercial banks."[215] This banking system functions under the mandates of Shari'a which prohibits usury and interest.[216] Iraq, Egypt, and Syria, signatories to the CISG, all were among the first to engage in Arab banking.[217]

Islamic banking is also known for its strong protection of secrecy [218] in Arab countries such as Lebanon,[219] Bahrain,[220] Saudi Arabia,[221] Kuwait,[222] [page 72] Qatar,[223] Oman,[224] Yemen,[225] and Egypt.[226] Many of these countries are [page 73] crucial economic centers in the Middle East. Beirut, Lebanon, before the Israeli invasion of 1982 [227] and breach of its cease fire agreement with the Palestine Liberation Organization (PLO) was the main economic center of the Middle East. During the war between Lebanon and Israel, Bahrain soon replaced Lebanon as the center of economic activity in the Middle East. Since the end of the Lebanese/Israeli war, Lebanon has been building [page 74] itself back to prominence once again as the economic center in the region. Other countries, such as Syria, Iraq, Libya, and Sudan, although they "do not restrict the right to bank secrecy . . . they almost deny the existence of any constitutional guarantees or the right of bank secrecy as an exemption."[228]

The prohibition against interest,[229] referred to as riba,[230] is rooted in the Qur'an itself.[231] This prohibition stems from the idea that it is exploitative in nature.[232] Five [233] different revelations in the Qur'an mention the [page 75] prohibition against riba.[234] Although much of Islamic law is Aman made" [235] and thus more amenable to change and open to disagreement, riba is an issue more deeply rooted in Shari'a than the legal theories of jurists. Therefore, the issue has been raised that Islamic nations may not recognize interest as incorporated under the CISG. riba is considered to be usury [236] [page 76] and the corresponding philosophies, that in payment and trading, one must only get what they pay for and should not get anymore. This ideal from the Qur'an was not some generalized conception, but very specific for hundreds of years.[237] "[T]here is complete unanimity among all schools of thought in Islam that the term riba stands for interest of all its types and forms."[238]

The prohibition of interest in respect to consumption loans rests mainly on humane considerations while the main rationale for prohibition of interest in respect to loans for production purposes stems from the concept of justice which is the cornerstone of the Islamic philosophy of social life. The basis of cooperation between capital and enterprise which Islam cherishes is equitable sharing of the risks and gains between them, which is possible under a system of profit/loss-sharing.[239] Laws were specific on various commodities and what commodities could be traded for what so that usury was not committed.[240] Merchant behaviors were always closely guarded so that they never committed usurious behavior unlawful advantages [page 77] in loan transactions.[241] Hence, not only is riba itself prohibited, but usurious practices that have the same effect as charging riba.[242]

3. Discussion of the Islamic Prohibition of Interest and the CISG's Acceptance of the Payment of Interest

So far, the discussion of riba in Shari'a, has been intertwined with the theoretical -- the ideal Islamic state. Is interest therefore prohibited? Would an Islamic forum prohibit interest from being awarded? There are four major forces working against this possibility which will affect the analysis and have to be reconciled with the prohibition of riba. The first, as it has been put forth in the small amount of scholarly attention paid to this issue, is that the Islamic states which are parties to the CISG, have signed it with no reservation to Article 78. If a state decided not to abide by a convention or treaty it signed, there could be negative international repercussions. The second is that no true Islamic state exists. Islamic states are often a combination of Islamic law with heavy influences from western legal structure. Thirdly, the trend in Islamic banking is a new one, and the Middle East is becoming integrated into the increasing level of international transactions today making it more difficult to uphold this unique viewpoint of interest that so controls the western world. Finally, to hold against the one issue of riba would contradict an entire source of Shari'a -- treaty law.[page 78]

Perhaps the most convincing argument against the failure to award interest is the fact that the Islamic signatories have signed the CISG with no reservation. Some commentators assert that this fact alone supports forcing Muslim adherence to Article 78.[243] However, this is too simplistic and consideration must be given to a culture deeply entrenched with religion at all levels.[244] Forums with decision-makers who took no part in the adoption of the CISG but who may have very strong religious values and personal views on proper public policy while in a position to assert their views with support directly in the Qur'an.

The legislative history of Article 78 was controversial enough to have only the award of interest without any notion of what that rate should be other than recent court and arbitral decisions. This has led commentators to further speculate that the same countries objecting to interest will not abide by this provision. It is also true that for a state to make a reservation to the CISG there must be a provision of the CISG allowing such reservation.[245] No CISG provision exists to allow an Article 78 reservation. Thus, it could be argued that the Islamic countries had no choice in the matter.

Although this is an argument, the reality is that if there was sufficient controversy on the matter, as with Article 1(1)(b) and Part II or Part III of the Convention, then perhaps a provision would have been designed for an Article 78 reservation. As the Islamic states adhere to principles of Shari'a, the Nordic states adhere to their own domestic legal structure in certain areas because of political-cultural legal ideals and they were permitted such a reservation. However, none of the reservations are based on religion. The Islamic countries' prohibition of riba is a fundamental one, rooted not only in the religion firmly entrenched in all their institutions and Islam but the Qur'an itself. Thus, insufficient argument or controversy was raised to create an allowance for such a reservation, and no evidence exists on any attempt to make a reservation.[page 79]

There exists another reason in this first point appropriate to be discussed here: The quality of the CISG by virtue of Article 6 that the parties may deviate from any or all of the CISG.[246] Hence, if a Muslim party disagrees with paying riba, despite the signature of his mother country, he can freely choose to deviate from Article 78. It is as simple as that. Perhaps this was part of the reasoning of Syria, Iraq and Egypt for signing the CISG with Article 78; the parties would have the opportunity to have a great deal of autonomy and apply the CISG in whole or part as they wish. In some cases they may want Article 78 to apply or not apply. A party may want the transaction only if it is entirely compatible with Shari'a or he may want to disregard the issue of riba in favor of some component of the transaction or the wishes of the other party; the other party may refuse to undertake the sales contract unless Article 78 applies. Despite the prohibition, the elimination of riba could eliminate potential business partnerships and if the countries had a reservation to Article 78, perhaps certain companies would be skeptical of entering such a transaction for fear of inadequate compensation should they be awarded damages. Shari'a, even in its pure state without influences of other legal cultures and ways of doing business, is highly adaptable. Also, lawmaking or legislation in Islamic states is able perhaps to be structured so that it may give the parties of the Islamic state more flexibility and freedom in their contractual obligations.[247] [page 80]

Islamic Nation-States have undergone political and cultural change for centuries. Today's Islamic countries are very much affected by the impact of European or Western influences [248] often inspired by political motives.[249] The most dramatic is fairly recent with the "first major redefinition [of Islamic law] occur[ing] in the Ottoman Empire in the nineteenth century."[250] "These reforms . . . introduced into the Ottoman law a Commercial Code (1850), a Penal Code (1858), a Code of Commercial Procedure (1879) and a Code of Maritime Commerce."[251] "In form, all the Ottoman Codes followed the European Models of a comprehensive codification."[252] Iraq, Syria, and Egypt have legal codes purportedly with the best features of Shari'a and modern Western law.[253] Even prominent scholars integral to the drafting of modern Islamic codes are unsure of the role of Shari'a in its purest form in Islamic countries:

Dr. Abd al Sanhuri (a "realist") "'The Islamic system could not be applied again … particularly with regard to certain of its provisions dealing with economic matters and real estate without prior adaption to the needs of modern civilization." "Dr. Sankuri was primarily responsible for drafting the Egyptian Civil Code (1949), the Iraqi Code (1951), The Libyan Code (1953), and more recently the Kuwaiti Codes (of 1960)." [254]

Many scholars agree with this assertion particularly in regard to economic matters and the needs of a modern society.[255] However,[page 81] Islamic judges do apply principles of Shari'a as judges in the west might apply principles of equity and Islamic judges apply natural law principles and equity as well.[256]The Syrian and the Libyan Codes state:

"Article 1(2). In the absence of an applicable legal provision the judge shall decide in accordance with the principles of the Islamic Shari'a, and in accordance with custom. In the absence of custom, the Judge will apply the principles of natural law and the rules of equity."[257]

However beyond this recourse to Islamic law, Iraq and Egypt, two CISG signatories, have less recourse to Shari'a: "The Egyptian and Iraqi codes have significant differences in phrasing. Recourse to the Shari'a in Egypt and Iraq is to be made only after recourse to custom."[258] Moreover, the integration of Shari'a is often focused on family law matters.[259]

Despite this recourse to Western thinking and legal structure in these Islamic countries, [260] Shari'a is gaining ground in the business sphere just as the Islamic banking system is gaining ground in the world. While this is true, and the force of such institutions is apparent in the short time of their existence, the fact remains that the CISG with the interest containing provision,[page 82] Article 78, remains in force and has been in force for some time. It could be true as Islamic banking gains momentum, that Islamic parties and the politics of Islamic states may develop a stronger view against riba. Perhaps the fact that Article 78 is in force and that it continues to be in force without any opposition, other than the occasional legal discussion such as this article, will probably make it more difficult to be criticized as time passes by.[261] This phenomena in combination with the Western influences on Islamic legal structure and judicial reasoning supports the conclusion that Article 78 will be upheld. The prohibition of riba must compete within a psychological environment of not only a conglomerate of powerful Western economic forces where they are often parties to the contract and although the prohibition of riba is well ingrained into the culture and religion and the Muslim party may be against it, their state had signed the CISG providing for it. Some scholars believe that the rise of Islamic banking may questionably be truly "Islamic."[262]

But to what extent are the proliferating Islamic banks really "Islamic"? It is our contention that although a certain element of symbolism is involved, the expansion of Islamic banks had initially represented part of the general phenomenon of an ascendant pax Saudiana within the Middle East. Increasingly, however, the expansion is becoming more specifically representative of the use of a native commercial bourgeoisie in the Arab world.[263]

Ayubi states that the first Islamic banks originating in Egypt were not actually motivated by principles of Islam "but from the theory and experience of German cooperative and mutual savings banks."[264] Also, these Islamic banks, though in certain states are more purely "Islamic" such as those in Pakistan and Iran, some of Egypt's motivation for establishing an Islamic banking system was to "encourage[] the idea of Islamic banking on an international level as part of her efforts in the seventies to attract petro-dollars."[265] [page 83] Further, Islamic banking may actually conduct so-called "usurious" transactions with a bank once removed that is non-Islamic .[266]

The practices of these banks can be described as "Islamic" only in a very broad and generalized sense. As one involved practitioner admitted, some Islamic banks delegate the job of investing in international markets to conventional banks that act on their behalf. The non-Islamic bank then performs the transaction on behalf of the Islamic bank according to its own system, organization and personnel, thus engaging the latter in usury and other prohibited ideas at one remove.[267]

Ayubi further asserts that these banking institutions "represent an endeavor by the rising Arab commercial bourgeoisie to employ petro-dollars in the highest paying types of mercantile activities."[268] And that this bourgeoisie "employ[s] well-paid and high-ranking religious scholars (ulama) to offer religio-legal consultation about their activities" and that in fact these banks "stretch" their Islamic character and already have."[269] " Some Islamic banks do indeed accept interest payment from their central banks, though they deny that such payments represent usury by claiming that the rates are usually administratively fixed . . . ."[270]

In addition, the Islamic banks have expanded too much into the lucrative murabaha field at the expense of the more Islamically-legitimate, if rather risky, instruments of mudaraba and murabaha is an indirect form of financial involvement whereby the return of finance is represented by a pre-determined margin of profit that is not directly related to the activity of the client who bought the commodity. Further, the main area for murabaha sales is in the commercial sector and is very limited to industry and agriculture. . . . And although they have claimed to work for a comprehensive Islamic economic order to emphasize the role of work and diligence, they have ended up financing the well-to-do. Although they have claimed to work for a comprehensive Islamic economic order, they have ended up being "servant institutions to the capitalist world system, acting withing the [page 84] same framework of economic and financial relations of dependency, even though they have hung an Islamic label on each of the existing systems, instruments and contracts.[271]

The theory of Ayubi's "Arab bourgeoisie" seems to be supported by the mere timing of the rise in Islamic banking and the oil wealth of the OPEC nations.

Islamic banking is a new and growing phenomenon, but it is one that is forced to co-exist with traditional interest-bearing institutions.[272] At one time, Muslims were not allowed to have their accounts in the same institution that recognized and dealt with interest.[273] Now, this practice is allowed. This Islamic philosophy in banking, although strong and surviving, it may be forced to make amends to adapt and truly flourish in its environment of an interest-recognizing banking culture. In this midst, it will be easy for an Islamic forum to mandate, when required, the Islamic party to pay riba.[274]

Another consideration is that Shari'a is an adaptable changing body of law.[275] All the schools of jurisprudence, both Sunni and Shi'a, recognize this fact.[276] Moreover, most of Shari'a is man-made. Although riba is prohibited [page 85] directly in the Qur'an, to what degree it is implemented in a modern setting can be greatly modified. It was the Muslim jurists who made the elaborate specifications regarding riba hundreds of years ago to prevent the multitude of the types of usury. Specifications on the exchange of wheat was an example. It can be Muslim jurists today, who can perhaps prohibit riba in its strictest form, but who perhaps, after allowing depositors to deposit in interest-recognizing banks, that perhaps when a contract is breached and damages are caused to the other party, payment to that party of interest, may not seem as congruent to the usury prohibited in the Qur'an. This is especially true when some schools of thought are lenient in allowing riba in transactions with non-Muslims.[277] It must be noted however, despite this conclusion, some countries will not fall in this category because they constitutionally do not recognize interest, such as Pakistan [278] and probably Saudi Arabia, however, they probably would not accede to Article 78 as Syria, Egypt, and Iraq have.[279]

Perhaps the most crucial support for the thesis that Article 78 will be rigidly enforced, is that although riba is prohibited, the contract as an institution in Shari'a [280] is one of its most fundamental institutions. The contract is sacred and upheld in equal strength between both Muslims and non-Muslims.[281] Further, the fact that Shari'a has religious strength behind its [page 86] secular mandates add to the religious power of the upholding of a contract between nations.[282] To deny riba in a valid contract governed under a valid convention, such as the CISG, is to deny enforcement of an entire source of Shari'a because of a smaller specific concept. Hence, if the issue boils down to ruling that a Muslim party does not have to pay riba or denying the enforcement of an entire source of Shari'a, it is the source of Shari'a that will win out.

IV. Conclusion

Islamic countries have a deep rooted tradition in religious and secular law as the same co-existing force. Although this force is itself rooted in the region's most sacred of texts, the Qur'an, the majority of Islamic law is man-made, not God-made. Further, it is adaptable and changing. The bulk of Shari'a is not well-developed on business matters which it relies heavily on borrowed Western legal structure. This provides a weaker basis for relying on religious mandates for today's modern business world and more room for the reinterpretation riba's prohibition in a light allowing the payment of interest perhaps in instances which are morally compatible with the mandates of the Qur'an. Shari'a has to function in the midst of western-inspired legal structures and in an environment that is far from the pure [page 87] ideal Islamic state. As Egypt, Iraq, and Syria have signed the CISG without reservation to the Article 78 and, under Article 6 of the CISG, the Islamic parties may opt out of Article 78. Islamic banking is enjoying fantastic success albeit recent. However, it must function and co-exist with interest-bearing bank practices. In light of all these considerations and despite the prohibition of riba in Shari'a, it appears likely that an Islamic forum will enforce Article 78 of the CISG.[page 88]

Appendix: Variations in CISG Implementation

Only the following countries (in alphabetical order) have reservations which mainly deal with territorial application or the conflict of law process that lead to the application of the CISG in certain circumstances: Argentina (Declarations and reservations: An Article 96 declaration is in effect for Argentina. In accordance with Article 12 and 96 of the United Nations Convention on Contracts for the International Sale of Goods, any provision of Article 11, Article 29 or Part II of the Convention that allows a contract of sale of its modification or termination by agreement or any offer, acceptance or other indication of intention to be made in any form other than in writing does not apply where any party has his place of business in the Argentine Republic."); Australia (Declarations and reservations: Australia has filed an Article 93 declaration. "The Convention shall apply to all Australian States and mainland territories and to all external territories except the territories of Christmas Island, the Cocos (Keeling) Islands and the Ashmore and Cartier Islands."); Belarus (declarations and reservations: An Article 96 declaration is in effect for Belarus. "In accordance with Articles 12 and 96 of the Convention, any provision of Article 11, Article 29 or Part II of this Convention that allows a contract of sale or its modification or termination by agreement or any offer, acceptance or other indication of intention to be made in any form other than in writing does not apply where any party has his place of business in [Belarus]."); Canada (Declarations and reservations: Canada had filed an Article 93 declaration. Also, there are provincial filings to consider."Canada declares, in accordance with Article 93 of the Convention, that the Convention will extend to Alberta, British Columbia, Manitoba, New Brunswick, Newfoundland, Nova Scotia, Ontario, Prince Edward Island and the Northwest Territories . . . ").

Chile (Declarations and reservations: Chile has filed an Article 96 declaration."The State of Chile declares, in accordance with Articles 12 and 96 of the Convention, that any provision of Article 11, Article 29 or Part II of the Convention that allows a contract of sale or its modification or termination by mutual agreement or any offer, acceptance or other indication of intention to be made in any other form than in writing, does not apply where any party has its place of business in Chile."); China (PRC) (Declarations and reservations: China has filed an Article 95 declaration and a declaration on the general subject of Article 96. "The People's Republic of China does not consider itself to be bound by subparagraph (b) of paragraph 1 of Article 1. . . "); Czech Republic (Declarations and reservations: Pursuant to Article 95, when it ratified the Convention in 1990 the Czechoslovak Socialist Republic declared that it shall not consider itself bound by the provision of Article 1, paragraph 1, item (b) of the Convention."); Denmark (Denmark has filed declarations under Articles 92, 93 and 94. "Denmark will not be bound by Part II of this Convention." "Under paragraph (1) of Article 93, Denmark declares that the Convention shall not apply to the Faroe Islands and Greenland.""Under paragraph (1) cf. paragraph (3) of Article 94, Denmark declares that the Convention shall not apply to contracts of sale where one of the parties has his place of business in Denmark, Finland, Norway or Sweden and the other party has his place of business in another of the said States. Under paragraph (2) of Article 94, Denmark declares that the Convention is not to apply to contracts of sale where one of the parties has his place of business in Denmark, Finland, Norway or Sweden and the other party has his place of business in Iceland.").

Estonia (Declarations and reservations: Estonia (Estonia has filed an Article 96 declaration. "In accordance with Articles 12 and 96 of the Convention, any provision of Article 11, Article 29 or Part II of this Convention that allows a contract of sale or its modification or termination by agreement or any offer, acceptance or other indication of intention to be made in any form other than in writing does not apply where any party has his place of business in Estonia."); Finland (Declarations and reservations: Finland has filed declarations under Articles 92 and 94."With reference to article 92, Finland will not be bound by Part II of the Convention (Formation of the Contract)." "With reference to Article 94, in respect of Sweden in accordance with paragraph (1) and otherwise in accordance with paragraph (2) the Convention will not apply to contracts of sale where the parties have their places of business in Finland, Sweden, Denmark, Iceland or Norway."); Hungary (Declarations and reservations: Hungary has filed an Article 96 declaration. Hungary has also filed certain remarks, purportedly under Article 90."In accordance with articles 12 and 96 of the Convention . . . any provision of Article 11, Article 29 or Part II of the Convention that allows a contract of sale or its modification or termination by agreement or any offer, acceptance or other indication of intention to be made in any form other than in writing does not apply where any party has his place of business in the Hungarian People's Republic." Hungary has also advised that it considers the General Conditions of Delivery of Goods between Organizations of the Member Countries of the Council for Mutual Economic Assistance/GCD CMEA . . . to be subject to the provisions of Article 90 of the Convention."); Lithuania (Declarations and reservations: Lithuania has filed an Article 96 declaration. " . . . any provision of Article 11, Article 29 or Part II of the Convention that allows a contract of sale or its modification or termination by agreement or any offer, acceptance or other indication of intention to be made in any form other than in writing does not apply where any party has his place of business in the Republic of Lithuania, in accordance with Articles 12 and 96 of the said convention.").

Norway (Declarations and reservations: Norway has filed declarations under Articles 92 and 94. "In accordance with Article 92, paragraph (1) Norway will not be bound by Part II of this Convention (Formation of the Contract)." "With reference to Article 94, in respect of Finland and Sweden in accordance with paragraph (1) and otherwise in accordance with paragraph (2) . . . Norway declares that the Convention will not apply where the parties have their places of business in Norway, Denmark, Finland, Iceland or Sweden."); Russian Federation (Declarations and reservations: An Article 96 declaration is in effect for the Russian Federation. "In accordance with Article 12 and 96 of the Convention, any provision of Article 11, Article 29 or Part II of this Convention that allows a contract of sale of its modification or termination by agreement or any offer, acceptance or other indication of intention to be made in any form other than in writing does not apply where any party has his place of business in the [Russian Federation]."); Singapore (Declarations and reservations: Singapore has filed an Article 95 declaration. "In accordance with Article 95 . . . the Government of the Republic of Singapore will not be bound by sub-paragraph (1)(b) of article 1 of the Convention and will apply the Convention to the Contracts of Sale of Goods only between those parties whose places of business are in different States when the States are Contracting States." ).

Slovak Republic (Declarations and reservations: Pursuant to Article 95, when it ratified the Convention in 1990 the Czechoslovak Socialist Republic declared that it shall not consider itself bound by the provision of Article 1, paragraph 1, item (b) of the Convention."); Sweden (Declarations and reservations: Sweden has filed declarations under Articles 92 and 94. "With reference to Article 92, Sweden will not be bound by Part II of the Convention (Formation of the Contract)." "With reference to Article 94 in respect of Finland in accordance with paragraph (1) and otherwise in accordance with paragraph (2), the Convention will not apply to contracts of sale where the parties have their places of business in Sweden, Finland, Denmark, Iceland or Norway."); Ukraine (Declarations and reservations: An Article 96 declaration is in effect for the Ukraine. "In accordance with Articles 12 and 96 of the Convention, any provision of Article 11, Article 29 or Part II of this Convention that allows a contract of sale or its modification or termination by agreement or any offer, acceptance, or other indication of intention be made in any form other than in writing does not apply where any party has his place of business in [Ukraine]."); United States (Declarations and reservations: The U.S. has filed an Article 95 declaration."Pursuant to Article 95, the United States will not be bound by subparagraph 1(b) of Article 1."). For a list of countries with these accompanying reservations, see <http://www.cisg.pace.edu/cisg/countries/cntries.html>.


* This article is dedicated to Rima A. Wahab of the American University in Beirut, Lebanon. For without her deep inspiration and support, the writing of this article would not have been possible.

The author is indebted to the following individuals for their invaluable advice and editing of this article: Nazish Abbas, Andrew Battmer, Debra Bannister, Franco Ferrari, Carissa Haider, Jolie Justus, J.D. Moore, Shannon O'Brien and Rima Wahab. The article's entired content, observations and conclusions are entirely the author's own.

Admitted Kansas Bar, J.D. University of Missouri-Kansas City School of Law, 1998; B.S. Public Administration, Southwest Missouri State University, 1994. The author is a member of the Law Offices of Daniel J. Markowitz in Overland Park, Kansas which engages in the practice of international and immigration law. The author also works with Iraqi and Somalian refugees at the Don Bosco Center in Kansas City, Missouri as well as assisting as Pro Se attorney for Don Bosco's immigration matters. The author was Lead Literary Editor of the UMKC Law Review; Abstract Editor of the Urban Lawyer Journal, Editorial Assistant of the American Bar Association's Appellate Practice Journal, and a member of the UMKC Willem C. Vis Moot Arbitration Team which will compete in Vienna, Austria in 1998 with issues governed under the United Nations Convention on Contracts for the International Sale of Goods. He was a member in the UMKC Inmate Legal Assistance Program and a Supplemental Education Instructor at the UMKC School of Law for Torts I and Constitutional Law I. He has authored International Law for Domestic Consumption for the Australian Law Society Journal of New South Wales. He also has authored articles on international law in the UMKC Law Review and the ILSA Journal of International & Comparative Law. He was listed in Who's Who in American Law Students in 1996, 1997 and 1998.

1. Excerpted from J.N.D. Anderson, Islamic Law in the Modern World xi, xii (1959).

2. The "Arab World" is only one part of the "Muslim World" and mistakenly used interchangeably with Muslim World leaving out very significant Muslim populations in Asia and the Pacific region. However, in the instant case, the only Muslim signatories to the CISG happen to be in the Arab World-Egypt, Iraq, and Syria.

The bracket phrase page followed by a number is used to identify the page number of the original publication.

3. The United Nations Convention on Contracts for the International Sale of Goods, Apr. 11, 1980, 19 I.L.M. 668 (1980) [hereinafter CISG].

4. There have already been some unique implementation concerns to the CISG or problems unique to the forum such as arbitral or court decision with an Iranian party. See the following: National Iranian Oil Company v. Ashland Oil, Inc., 817 F.2d 326 (5th Cir. 1987) (holding against viability of arbitration clause when Iran was the forum and Iran sought to substitute Mississippi as an alternative forum); McDonnell Douglas Corp. v. Islamic Republic of Iran, 758 F.2d 341 (8th Cir. 1985) (holding against the viability of Iranian court in Iran as the forum).

5. "Al Shari'a" means "the Islamic law." "Al" means "the" in Arabic. Thus, "Shari'a" is often used with the "al" dropped where appropriate.

6. For a comparison of both the Iranian and Israeli systems of government including a constitutional structural comparison, see S.I. Strong, Law and Religion in Israel and Iran: How the Integration of Secular and Spiritual Laws Affects Human Rights and the Potential for Violence, 19 Mich. J. Int'l L. 109 (1997).

7. See infra note 273.

8. For a discussion on some aspects between common law and Islamic law, see Paul E. Pompeo, East Meets West: A Comparison of Government Contract Dispute Resolution in the Common Law and Islamic Systems, 14 Loy. L.A. Int'l & Comp. L.J. 815, 835 (1992).

9. Asaf A. A. Fyzee, Outlines of Muhammadan Law 14 (1955)(quoting Gobind Dayal v. Inayatullah 7 All. 775, 78 (1885)).

10. The sales contract has been referred to as the "'mercantile contract par excellence'" and "'the pillar of the entire systems of commercial relations.'" Franco Ferrari, Specific Topics of the CISG in the Light of Judicial Application and Scholarly Writing, 15 J.L. & Commerce 1, 4 (1995) (citing Francesco Galgano, Il Diritto Privato Fra Codice E Costituzione 6 (2d ed., Bologna 1980) and Daniela Memmo, Il contratto di vendita internazionale nel diritto uniforme, Rivista trimestrale di diritto e Procedura civile 180, 181 (1983)).

11. The "Koran" and "Qu'ran" may be used interchangeably and are used according to the translator's preference from Arabic to English. They refer to Islam's "Holy Book", that is, the Revelations given from Allha to Muhammed the Prophet. "Allah" is Arabic for God and may be used interchangeably with God.

12. J.N.D. Anderson, supra note 1, at xv.

13. M. Cherif Bassiouni in The Islamic Criminal Justice System 10, xiii (M. Cherif Bassiouni, ed., 1982). "Compare this with the French expression of the same principle in Article 1134 of the French Civil Code: 'Les conventions légalement formées tiennent lieu de loi entre les parties contractantes.' Also, Sanhouri, Al-Wasit, a Commentary on the New Egyptian Civil Code, the Sources of Obligations, Masadir al-Iltizam (Cairo), p. 624." Id. at xiii, n.6. "The Continental legal system was first introduced in the Arab countries when Napoleon occupied Egypt and imposed his legal code. The Egyptians later replicated the codes into their legislations." Abdlalla El-Sheikh, infra note 218, at 577, n.1.

14. See infra text accompanying notes 184-198.

15. See infra note 87 (listing almost fifty countries and stating that approximately 100 countries have applied for the CISG in 1996).

16. See, e.g., The New New International Economic Order, 87 Am. Soc'y Int'l L. Proc. 459 (David George Anderson, ed., 1993).

17. Louisiana does not follow the U.C.C..

18. See, e.g., Larry A. Dimatteo, An International Contract Law Formula: The Informality of International Business Transactions Plus the Internationalization of Contract Law Equals Unexpected Liability, L+(II) 2 , 23 Syracuse J. Int'l L. & Com. 67 (1997) ("The American business person confronts two issues when negotiating international contracts. First, whether the ratification of the Convention of the International Sale of Goods (CISG) by the United States will result in unexpected liability for the business person with only a working knowledge of the Uniform Commercial Code (UCC).").

19. See id. "All attorneys in the United States should be aware of the substance of these [CISG's] paragraphs." Peter Winship, Changing Contract Practices in the Light of the United Nations Sales Convention: A Guide for Practiioners, 29 Int'l Law. 525 (1995).

20. U.C.C. '2-102: "Scope . . . Unless the context otherwise requires, this Article applies to transactions in goods . . . "

21. CISG, art. 1(1): "This Convention applies to contracts of sale of goods between parties whose places of business are in different States . . . "

22. "The cornerstone of the recent trend toward unification of international business law is the CISG... ." Kenneth C. Randall & John E. Norris, A New Paradigm for International Business Transactions, 71 Wash. U. L.Q. 599, 612 (1993).

23. Harmonization and unification of law immeasurably promotes commercial trade and business transactions. See, e.g, Franco Ferrari, International Business, Law Merchant, and Law School Curricula, 6 Yale J.L. & Human. 95, 97 (1994).

24. Not only must there be uniform law, but countries must apply the supposed "uniform" law uniformly. For a similar discussion on this issue, see Ferrari, supra note 10, at 8.

25. Article 7(1) of the CISG states: "In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in international trade."

26. The United States opting out of Article 1(1)(b) of the CISG as authorized by Article 95, gives greater chance for the U.C.C., which it prefers, to be applied in disputes where the United States is the forum; see supra note 30. Article 1(1)(b) allows the CISG to be applied even where the parties are not from Contracting States if the rules of private international law (conflicts of law) lead to the application of the law of a Contracting State. Thus, since the United States has declared it will not be bound by Article 1(1)(b), if both parties are not from Contracting States and the forum is the United States, it is likely U.S. domestic law will apply, hence, the U.C.C., instead of the CISG. Interestingly, many scholars believe that despite this reservation by the United States under Article 95, the CISG will likely to be applied via Article 1(1)(b) in forums other than the United States because only the State that is applying the CISG is not bound it because in its view all the requirements of 1(1)(b) could be met and it is not bound by another State's reservation. See Ferrari, supra note 10, at 44-46. Typically, civil law countries will not follow the method as if they "were standing in the shoes of a U.S. judge" because their domestic law does not recognize the so called "spirit" of another country's law. Germany is an exception. If Germany is the forum state and if it finds U.S. law applicable, it will not apply Article 1(1)(b) as an American judge would not because "a statute having been passed in Germany according to which German judges are bound to apply domestic sales law, i.e., not the CISG, when their rules of private international law lead to the applicability of the law of a Contracting reservatory state." Id. at 47.

27. Many South American States do not believe in party autonomy in certain situations that parties may not choose the law of another jurisdiction although the parties may have the choice of forum. Note Argentina's reservation. See supra note 30. This factor is also one of the stumbling blocks behind the failure of the Americas to pass the 1994 Inter-American Convention on the Law Applicable to International Contracts. Harold S. Burman, International Conflicts of Laws, the 1994 Inter-American Convention on the Law Applicable to International Contracts, and Trends for the 1990s, 28 Vand. J. Transnat'l 367, 380-81 (1995).

28. The Nordic States, because of the peculiarities of their legal systems, typically opt out of Part II of the Convention (Formation of Contract) as authorized under Article 92. See note 30. This reservation does not have the problems of an Article 95 reservation as the U.S. has made, as discussed in the immediately preceding footnote, because under Article 97, if an issue falls under Part II of the CISG and certain other articles (arts. 11 and 29), the reservatory nation is simply not considered to be a "Contracting State". Whereas under Article 95, the signatory nation remains a "Contracting State", it is only not to apply Article 1(1)(b).

29. Differing religious beliefs, as well as other factors, contributed to the CISG's failure to establishing what rate of interest is the applicable rate; instead, the CISG only states that a party is entitled to interest. See Franco Ferrari, Uniform Application and Interest Rates Under the 1980 Vienna Sales Convention, 23 Ga. J. Int'l & Comp. L. 467, 474-75. "If a party fails to pay the price or any other sum that is in arrears, the other party is entitled to interest on it, without prejudice to any claim for damages recoverable under Article 74." CISG, art. 78. Although, a referrable rate of interest is only not within the CISG and there are not noted reservations on Article 78, it has been speculated that some question could be raised that Islamic countries may not abide by it.

30. See Appendix.

31. The Islamic signatories are Egypt, Iraq and Syria. Uzbekistan has a large Muslim population, however, since it is formerly of the Soviet Union and retains its a similar governmental structure including the communist party, it, of course, does not intertwine religion into its government functioning.

32. For example, although not a signatory to the CISG, Saudi Arabia includes the Koran as part of its Constitution.

33. Rodney Wilson, Banking and Finance in the Arab Middle East 143 (1983).

34. Islamic World vii (Francis Robinson, ed., 1996).

35. Bassiouni, supra note 13, at 3.

36. Id.

37. See, e.g. Egypt Const., Kuwait Const., Yemen Const. Dr. Fath El-Rahman Abdalla El-Sheikh, Bank Secrecy and Confidentiality Law in Practice-A Middle Eastern Perspective, 14 Dick. J. Int'l L. 577, n.2 (1996).

38. Id.

39. Gamal Moursi Badr, Islamic Law: Its Relation to Other Legal Systems, 26 Amer. J. Comp. L. 187 (1978).

40. When there are three major world legal systems and a huge proportion of international business transactions involves all three of these systems, it is important for the lawyer advising in these transactions the implications of implementation of the same law in the forums of widely varying legal systems.

41. In the words of one commentator:

"Arnold Schwarzenneger's recent movie 'True Lies' is representative of how current American popular culture views Islamic fundamentalism. The Arab Muslims in the movies are terrorists; men driven by religion, incapable of reason. Though clever enough to steal atomic weapons to target American cities, the Arabs in the movie are incapable of dealing with the fact that the batteries have run out in their video camera."

Seth Hilton, American Conceptions of the Middle East and Islam, 1 U.C. Davis J. Int'l L. & Pol'y 355 (1995). For another discussion on this issue, see John L. Esposito, Political Islam and U.S. Foreign Policy, 20-FALL Fletcher F. World Aff. 119 (1996).

42. For discussion on women's issues and Islam, see Unni Wikan, Behind the Veil in Arabia: Women in Oman (1982); M. Mazheruddin Siddiqui, Women in Islam (1981); Annelies Moors, Women, property and Islam: Palestinian Experiences 1920-1990 (1995) (acknowledging Islam's support for gender equality but experience in the field, particularly with Palestine, shows difference in practice); Anwar Hekmat, Women and the Koran: The Status of Women in Islam (1997). For an international women's rights perspective on this issue, see Urfan Khaliq, Beyond the Veil?: An Analysis of the Provisions of theWomen's Convention in the Law as Stipulated in Shari'ah, 2 Buff. J. Int'l L. 1 (1995). See also Leila P. Sayeh & Adriaen M. Morse, Jr., Islam and the Treatment of Women: An Incomplete Understanding of Gradulism, 30 Tex. Int'l L.J. 311 (1995).

43. See Riffat Hassan, Religious Human Rights and the Qur'an, 10 Emory Int'l L. Rev. 85 (1996); James C.N. Paul, Islam and the State: The Problems of Establishing Legitimacy and Human Rights, 12 Cardozo L. Rev. 1057 (1991). For a further discussion on this issue, see Kimberly Younce Schooley, Cultural Sovereignty, Islam and Human Rights-Toward a Communitarian Revision, 25 Cumb. L. Rev. 651 (1995).

44. For further discussion on Islamic regions of the world with their own unique issues such as Malaysia and Algeria, see the following: Donald L. Horowitz, The Qur'an and the Common Law: Islamic Reform and the Theory of Legal Change, 42 Am. J. Comp. L. 233 (1994); Peter A. Samuelson, Pluralism Betrayed: The Battle Between Secularism and Islam in Algeria's Quest for Democracy, 20 Yale J. Int'l L. 309 (1995); Christopher Ford, Siyar-ization and its Discontents: International Law and Islam's Constitutional Crisis, 30 Tex. Int'l L. J. 499 (1995).

45. According to Seth Hilton:

"The poor image of the Arabs in the West] originates in a world view inherited from Britain and France, two colonial powers long active in the region. Edward Said has traced the development of the perception of the Middle East from the paternalistic attitudes of the colonial powers towards a people they deemed inferior to their own. Stereotyping the cultures of the Middle East as inferior and dominated by a religion that stunted economic development and intellectual progress provided the rationale to colonize the Middle East. The Arab peoples needed the guidance that a superior Western culture could provide. Hilton, supra note 41, at 355-56."

46. For a discussion exclusively on foreign attorneys practicing law in Saudi Arabia, see David J. Karl, Note, Islamic Law in Saudi Arabia: What Foreign Attorneys Should Know, 25 Geo. Wash. J. Int'l L. & Econ. 131 (1992).

47. See CISG, art. 78.

48. The cooperation between the US forces in the Gulf War and Saudi Arabia "dramatically underlined the interdependence of the West and this part of the Muslim world." Islamic World, supra note 34, at xxiii.

49. See Amin Mallouf, The Crusades Through Arab Eyes (1984); see also G. W. Bowersock, Roman Arabia (1983); see also Bruce B. Lawrence, Shattering the Myth: Islam Beyond Violence (1998).

50. For a discussion of the misconceptions about Muhammad that have developed through the ages in Western thought, see William E. Phipps, Muhammad and Jesus (1996).

51. "Persians" or Iranians are often confused with "Arabs." The Arab bloodline is predominant in the Middle East, but Iran is barely a majority of Persian bloodlines while the remaing half does contain a significant Arab population. Also, Iranians speak Farsi which is similar to Arabic in that it uses the Arabic script. Persians are more of an Indo-European bloodline. Pure Arab ancestory orginated from Saudi Arabia and has since be diluted significantly during the past thousand years from other races. For a popular account and history of the Arab people, see Peter Mansfield, The Arabs (2d ed., 1985).

52. Some Muslims consider the use of these forces to be "enemies" of Islam and thus stems much resentment toward the West: "The modern fight against Islam is not taking place in the name of religion, but in the name of territory, economy, politicas, and military locations." Ibrahim M. Abu-Rabi, Intellectual Origins of Islamic Resurgence in the Modern Arab World 189.

53. For a discussion including the relationship of Iran"s revolutionary regime and Islam, see Sarvenaz Bahar, Khomeninism, The Islamic Republic of Iran, and International Law: The Relevance of Islamic Political Ideology, 33 Harv. Int"l L.J. 145 (1992).

54. "Despite Reza Shah"s sincere desire to reduce foreign power in Iran . . . , the West continued to influence the Iranian economy. His modernization relied most on Western technology and Britain continued to control the Anglo-Persian Oil Company . . . " Mohsen M. Milani, The Making of Iran"s Islamic Revolution: From Monarchy to Islamic Republic 33-34 (1994). For an in depth exploration of this issue, see Manucher Farmanfarmaian & Roxanne Farmanfaramaian, Blood and Oil: Memoirs of a Persian Prince (1997).

55. The Anglo-Persian Oil Company was eventually nationalized, but the United States and Britain maintained extensive control over Iran. Ervan D Abrahamiam, The Iranian Mojahedin 14 (1989).

56. "[T]he Nixon administration underwrote the Shah as the policeman of the Gulf, and agreed to sell him whatever non-nuclear arms he wished . . . The British provided Iran with more Chieftain tanks than they had in their own armed forces, and the United States let the Shah be the first to buy a series of sophisticated fighter planes . . . Iran also designed electronic intelligence network called IBEX for American surveillance of the Soviet Union." Nikki R. Keddie, Roots of Revolution: An Interpretive History of Modern Iran 176 (1981).

57. "[T]he Shah, with strong British and American support, became increasingly dictatorial and soon all elements of democracy were gradually eradicated or negated." Momen, infra note 132, at 252.

58. Reza Shah (the last Shah's father) had an aim of not only modernizing Iran, but reemphasizing Iran's pre-Islamic culture. Milani, supra note 54, at 32-33.

59. Note Iman Khomeini's so called "fundamentalist" perspective of Islam as cited in Akbar S. Ahmed, Discovering Islam: Making Sense of Muslim History and Society 30-31 (1988):

"Unfortunately, true Islam lasted for only a brief period after the inception. First, the Umayyads and then Abbasids inflicted all kinds of damage on Islam. Later, the monarch ruling Iran continued on the same path; they completely distorted Islam and established something quite different in its place. The process was begun by the Umayyads, who changed the nature of government from divine and spiritual to worldly. Then rule was based on Arabism, the principle of promoting Arabs over all other peoples, which was an aim fundamentally opposed to Islam and its desire to abolish nationality and unite all mankind in a single community, under the aegis of a state indifferent to the matter of race and colour. It was the aim of the Umayyads to distort Islam completely by reviving the Arabism of the pre-Islamic age of ignorance, and the same aim is still pursued by the leaders of certain Arab countries, who declare openly their desire to revive the Arabism of the Umayyads, which is nothing but the Arabism of the Fahiliya. (Islam and Revolution, 1981)."

60. "Force was often used for political and economic ends. Millspaugh wrote: 'Fear settled upon the people. No one knew whom to trust; and no one dared to protest or criticize.'" Milani, supra note 54, at 34.

61. See, e.g., Momen, infra note 132, 259-60, 282-89.

62. According to one commentator:

"The worst occurred at Jaleh Square in eastern Tehran where many bigaari families lived. When some 5000 residents, many of them high school students, staged a sit down demonstration in the middle of the square, army commanders cordoned off the area and shot indiscriminately into the crowd. In the words of one European correspondent, the scene resembled a vast firing squad with troops shooting ceaselessly into a large stationary crowd." Ervand Abrahamian, The Iranian Mojahedin 34-35 (1989). See also infra note 67.

63. Many Muslim American women experience some difficulties in American society because they choose to dress according to Islamic custom.

See Aminah B. McCloud, American Women and U.S. Society, 12 J.L. & Religion 51 (1995-1996).

64. "Veiled women were harassed by the police, forcing many of them into virtual exile as they refused to appear unveiled in public." Milani, supra note 54, at 33.

65. For the backlash and fixation on traditional wear for women in Iran, see The Iranian Revolutions and the Islamic Republic 11 (Nikki R. Keddre & Eric Hooglund, eds., 1986).

66. Almost every section of the Iranian population had grievances against the Shah by 1977. The Ulama were alarmed by the increasing encroachment on their income and field of action by the Din-I Dawlat structure, the laws being passed by the regime which they considered anti-Islamic, and the wholesale importation of Western culture; the students were unhappy about government interference in the running of the universities and in the curriculum; the farmers and peasants had come to see that the propaganda of the White Revolution [Shah's policy] did not match the realities, the policies of the government were in fact favoring agricultural imports rather than the peasant farmers, many of whom drifted to the cities and became construction workers or unemployed; and the business community, the civil service and most of the middle class were unhappy about the increasing inflation and the pervasive corruption.

Momen, infra note 132, at 283.

67. "Deaths of prominent opposition figures-even if deaths came from natural causes-were inevitably blamed on SAVAK" because many protestors, guerillas, and opposition figures, including many writers and Khomeini's eldest son, died from "strange" natural causes, "shoot-outs, torture, or before firing squads." Abrahamian, supra note 55, at 23.

68. "In addition [to the "contemporary tyranny" and Western-style "consumption by the Iranian elite] the association of the Shah's regime with Western culture commodities, and vices brought on a traditionalist reaction even among former Westernizes . . . " Keddie, supra note 56, at 182.

69. See The Iranian Revolution and the Islamic Republic, supra note 65, at 10.

70. "While anti-American feeling is comprehensible in view of the events since 1953, it is of substitute sloganeering and internal witch-hunting for serious analysis and constructive action." Keddie, supra note 56, at 261.

71. For a slightly critical view of why this should support anti-United States sediment, see id. at 266. "The legacy of prerevolutionary policies provides continuing problems for Iran, but the continuing focus on these problems and are supposed CIA, United States, and allied 'liberal activity at a time when internal analysis planning and reconstruction are desperately needed seems dangerous to Iran's future.'" Id.

72. Some of the violence that has unfortunately tainted the behavior of certain Muslim groups in some Arab and Muslim countries is, in fact, a reaction to state terror unleashed by Western-oriented secular regimes against their own people. Yet the sympathy of the West is, by and large, with regimes guilty of terror and oppression, and all its wrath and fury are directed against the errant individuals or groups who are actually victims of state terrorism.

Sohail H. Hashmi, International Society and its Islamic Malcontents, 20-SPG Fletcher F. World Aff. 13, 26 (1996).

73. Even if the Khomeini government has caused an overall "worsening of life", i.e. unemployment, inflation, and discrimination to some religious or ethnic groups) compared to the Shah, many Iranians attribute to other factors and not necessarily the government. The Iranian Revolution and the Islamic Republic, supra note 65, at 158. Thus, if suppression is felt, it is less direct and much less violent.

74. An Ottoman colony for many years, Palestine was nevertheless the communal home of the Palestinian Arabs. After decades of Jewish immigration into Palestine, the Jews in 1948 numbered only a third of the total population; these Jews also owned no more than six percent of the total land surface of Palestine. Edward W. Said, The Politics of Dispossession: The Struggle for Palestinian Self-Determination 70 (1995). In 1919, the Palestinians number 90 percent of the total population in Palestine. Ron David, Arabs and Israel for Beginners 92 (1996). The Jewish numbers went to nearly a third after a series of immigration from Europe and other parts around the world from 1919 until 1948. Well over 800,000 Palestinians were evicted from their homes by the Zionist forces. "In 1967, the rest of Palestine-occupied by the Hashemite Kingdom of Jordan in 1948-was taken over by Israel. Today, the four million Palestinians exist in . . . dispossessed, dispersed, subjugated groups . . ." Said, supra, at 70. "Most Palestinians have lived in Palestine for several hundred (or several thousand) years. It is possible (or likely) that some Palestinians can trace their history back to the ancient city of Jericho-over 10,000 years ago!" David, supra, at 105. Moreover, a significant Jewish population or nations has not existed for 2,000 years. See e.g. id. at 106.

75. The Arab and Persian culture, some believe, has become so intrinsically intertwined that "[T]he Muslim world…has long since come to accept Islamic civilization as a "Perso-Islamic synthesis." Abu-Rabi, supra note 52, at 501.

76. Until 1948, Israel did not exist. Palestinians had been living in the region for 2000 years. When Jews from all over the world began to arrive to create Israel, the Palestinians were forced to leave towards the West Bank and Palestine became much smaller. This removal was done without compensation and often brutal and violent. Israel took twice the land allowed by the United Nations General Assembly. The United States had premised its recognition of the new State of Israel if Israel at least financially compensated the Palestinians which is promised to do, but today still has not. Enormous aid has been given to Israel to the point where really Israel cannot be said to be classified as a "third-world" country; it is a nation well-financed, nuclear capable, and well-defended. Many Arab nations are without such economic support or military capability. This helplessness felt by the Arabs was epitomized by the Israeli invasion of southern Lebanon. Israel and the PLO has a cease fire agreement and Israel broke the agreement and claimed there were PLO strongholds in Lebanon that could threaten Israel. Many condemned Israel, but no one reacted to protect Lebanon and Israel still occupies southern Lebanon. See generally David, supra note 74 (David's book is an excellent account of the Arab/Israeli situation while being enjoyable to read and written for the average lay person who is completely unknowledgeable about the subject.). These acts are in the Arab perspective and examples of how different things appear to Arab eyes. For a more detailed account of Palestinian history, see Sami Hadawi, Bitter Harvest: A Modern History of Palestine (1991).

77. "[President] Bush frequently cited damaging material that he had known about for years but about which he had been silent while the U.S. was supplying Saddam with cash credits, armaments, and other equipment." Geoff Simons, Iraq: From Sumer to Saddam 360 (2d ed. 1996).

78. For example, there was a fear during the Persian Guld War that Saddam might also invade Saudi Arabia. However, Saddam Hussein declared that since 1975 Iraq and Saudi Arabia had enjoyed good relations and that there was no reason why the Iraqi-Saudi links should be harmful to U.S. interests: . . . there is no danger to Saudi Arabia. If you want to push Saudi Arabia to do something against our interests, that is another thing. . . . Kuwait was always part of Iraq. . . . But Saudi Arabia is a completely sovereign state . . ." Saddam also pointed out that his threats against Isreal were only intended to deter a nuclear attack on Iraq. ABC Television had in fact deliberately edited the broadcast interview with Saddam to create the wrong impression, an early indication of the news manipulation that the West would practice to justify resort to war." Id. at 365.

79. "I am a believer in the truth of all the great religions of the world. There will be no lasting peace on earth unless we learn not merely to tolerate but even to respect the faults as our own. A reverent study of the sayings of the different teachers of mankind is a step in the direction of such mutual respect." Mahatma Gandhi in Forward in Abdullah & Al-Suhrawardy, infra note 156, at vi.

80. For a Muslims lawyer's perspective on practicing law in the United States, see Azizah al-Hibri, Essay, On Being a Muslim Corporate Lawyer, 27 Tex. Tech. L. Rev. 947 (1996).

81. Professor Ferrari, a prominent and well-published scholar on the CISG, hints at the possibility in some of his articles and lectures. See e.g. Franco Ferrari, Specific Topics of the CISG in the Light of Judicial Application and Scholarly Writing, 15 J.L. & Com. 1, 118, n. 843 (1995) (citing Peter Schlectriem, Recent Developments in International Sales Law, 18 Israel L. Rev. 309, 323 (1983)("stating that during the 1980 Vienna Conference '[t]here were…irreconcilable, ideologically as well as economically motivated convictions on the issue of payment of interest for outstanding debts, in particular the purchase price: some Islamic countries, for instance, rejected an obligation to pay interest for religious reasons.'"); Franco Ferrari, Uniform Application and Interest Rates Under the 1980 Vienna Sales Convention, 24 Ga. J. Int'l & Comp. L. 467, 473-74 (1995) (referring again to Schlectreim, but only pertaining to "religious" beliefs rather than specifically Islamic). Professor Ferrari himself has raised this issue perhaps on more than one occasion. Professor Franco Ferrari, Class Lectures, International Sales, International Business Transactions, Fall Semester 1997, University of Missouri-Kansas City School of Law (notes on file with author). Other than the vague reference to other scholarly authorities who make the same vague reference (See Schlectreim, supra, at 323 (Schlectreim's reference to this possibility regarding Islamic countries is solely limited to the quote cited by Professor Ferrari and he provides no citation.)) little popular indication of the possibility of Islamic forums not adhering to Article 78 exists even in the legislative history. However, since Ferrari and others have at least raised the issue (however, he does believe the Islamic signatories, Syria, Iraq, and Egypt, will adhere to Article 78 simply by virtue of them signing the CISG) and who are well involved with, from time to time, the actual arbitration of issues governed under the CISG, the exploration of Shari'a prohibition of interest and the CISG certainly deserves exploration.

82. Yves Dezalay and Bryant Garth discuss the internal changes within the international arbitral system as it has grown in the past twenty years in Fussing About the Forum: Categories and Definitions as Stakes in a Professional Compeition, 21 L. & Soc. Inquiry 285, 295-299 (1996); see also Yves Dezalay & Bryant Garth, Merchants of Law as Moral Entreprenuers: Constructing International Justice from the Competition for Transnational Business Disputes, 29 L. & Soc'y Rev. 27, 35-39 (1995).

83. "Due to the impractibility of traditional justice systems, governments and businesses from around the world have embraced arbitration as an efficacious way of handling international commercial disputes." Robert Donald Fischer & Roger S. Haydock, International Commercial Disputes Drafting an Enforceable Arbitration Agreement, 21 Wm. Mitchell L. Rev. 941, 945.

84. "In addition to the impractibility of traditional justice systems, the interest in the growth of arbitration has been prompted by the tremendous expansion of international commerce and the recognition of our global economy." Id. at 946-47. "Globalization and the impractibility of traditional justice systems are two major forces fueling growth in the use of arbitration." Id. at 945.

85. "The ICC [International Chamber of Commerce] has handled roughly 7500 international arbitrations since it was founded in 1923, about 3,500 taking place between 1983-1993." Id. at 944-45.

86. Convention on the Recognition and Enforcement of Foreign Arbitral Awards, June 10, 1958, 21 U.S.T. 2517, 330 U.N.T.S. 38. See also, e.g., Ronald A. Brand, Enforcement of Judgments in the United States and Europe, 13 J.L. & Com. 193-94 (1994) (stating that almost eighty countries are signatories).

87. The following countries are signatories to the CISG: Argentina, Australia, Austria, Belarus, Belgium, Bosnia-Herzegovina, Bulgaria, Canada, Chile, China (PRC), Cuba, Czech Republic, Denmark, Ecuador, Egypt, Estonia, Finland, France, Georgia, Germany, Guinea, Hungary, Iraq, Italy, Lesotho, Lithuania, Luxembourg, Mexico, Moldova, Netherlands, New Zealand, Norway, Poland, Romania, Russian Federation, Singapore, Slovakia, Slovenia, Spain, Sweden, Switzerland, Syria, Uganda, Ukraine, United States, Uzbekistan, Yugoslavia, Zambia, USSR (superseded).

88. Gary Kenji Nakata, Filantro S.P.A. v. Chilewich Int'l Corp.: Sounds of Silence Bellow Forth Under the CISG's International Battle of the Forms, 7 Transnat'l Law 141, 144 (1994).

89. Ferrari, supra note 10, at 5, n.15.

90. Id. (stating that Projet d'une loi internationale sur la vente (S.d.N. 1935-U.D.P. Projet I) is the source for the text of this draft and for commentary on this draft see Ernst Rabel, Der Entwurf eines einheitlichen Kaufgesetzes, Rabels Zeitschrift Für Ausländisches und Internationales Privatrecht 3 ff. (1935) and Ernst Rabel, A Draft of an International Law of Sales, 5 U.Chi. L. Rev. 543 (1938).

91. Christine Moccia, Note, The United Nations Convention on Contracts for the International Sale of Goods and the "Battle of the Forms," 13 Fordham Int'l L.J. 649, 652 (1989/1990).

92. Jeffrey S. Sutton, Comment, Measuring Damages Under the United Nations Convention on International Sale of Goods, 50 Ohio St. L.J. 737, 738 (1989).

93. See Claire M. Germaine, The United Nationa Convention on Contracts for the International Sale of Goods: Guide to Research and Literature, <http://www.law.cornell.edu/library/sales.html>, at *2 (Sept. 3, 1997).

94. "The U.S. did not ratify; in the end less than ten countries (mostly European) did and the conventions had little lasting impact." B. Blair Crawford, et al., New Rules for Contracting in the Global Marketplace the United Nations Convention on Contracts for the International Sale of Goods ("CISG"), C395 ALI-ABA 115, 118 (1989).

95. Germaine, supra note 93, at *2.

96. Ferrari, supra note 10, at 7.

97. Germaine, supra note 93, at *2.

98. Ferrari, supra note 10, at 7-8.

99. Germaine, supra note 93, at *2.

100. Id. "In addition to the United States, the eleven adopting States included: Argentina, China, Egypt, France, Hungary, Italy, Lesotho, Syria, Yugoslavia, and Zambia." Id.

101. For the U.S. seminal case on choice of forum clauses, see Bremen v. Zapata, 407 U.S. 1 (1972).

102. For issues of arbitration and the Middle East and some pecularities such as in the Persian Gulf War, see Michael Durgavich, Resolving Disputes Arising out of the Persian Gulf War: Enforceability of International Agreements to Arbitrate, 22 Cal. W. Int'l L. J. 389 (1992).

103. This distinction is mainly due to the present frame of time. Today, Islamic law covers both secualar activities and religious activities. Certainly, both common law and civil law covered a wide variety of religious activities declining only in the past two hundred years and many remain on in state codes today although unenforced.

104. Id.

105. Id. at 188.

106. Id.

107. Id.

108. Badr, supra note 39, at 188.

109. See, e.g., Allamah Sayyid Muhammad Husayn Tabatabai, Shi'a at *3 (Sayyid Husayn Nasr, tr.) at <http:www2.mozcom.com/~habib/islamstu.htm>.

"Islam etymologically means surrender and obedience. The Holy Quran calls the religion which invites men toward this end 'Islam' since its general purpose is the surrender of man to the laws governing the Universe and man, with the result that through this surrender he worships only the One God and obeys only His commands. As the Holy Quran informs us, the first person who called this religions 'Islam' and its followers 'Muslims' was the Prophet Abraham, upon whom be peace." Id.

110. One should be cautious in relying on Western interpretations of Islam and Shari'a. Note the following example describing Islam in an article published in the Michigan Journal of International Law:

"The Quran, which is considered by Muslims to be the sacred, literal, and inerrant word of God, contains additional injunctions concerning proper behavior for believers. For example, several forms of conduct is strictly regulated, although polygamy is accepted for men. The role of women is also strictly regulated."

Strong, supra note 6, at 123. The truth is that polygamy is not commonly acceptable. Polygamy arose as a necessity or cultural behavior from the pre-Islamic era in Arabia when polygamy more common. Polygamy was usually not the method a man indulged his sexual desires or placed women in a subservient status. Rather, a man taking more than one wife was the means in providing for the woman. The life of the Prophet and western conceptions of Muhammad have helped perpetuate this stereotype of him practicing polygamy. The truth is, in perhaps in comparison with most of the other prophets, there has never been a closer relationship between man and wife than Muhammad and his wife Khadija. Khadija was the first to convert to Islam. She comforted Muhammad for his psychological trauma when he first began receiving his revelations. She also extensively supported his teaching of the revelations. Khadija, who was fifteen years his senior, died when Muhammad was fifty. Only then did he take more than one wife. He took them mainly out of compassion; some were either widowed because their husbands had been slain and his good friends or they were unable to provide for themselves. Muhammad's age and the ages of his wives indicate the necessity and convenience of his marriages. One must consider the culture and understanding of marriage and polygamy from which the Qur'an came before asserting that today the Qur'an approves of polygamy as one method of perpetuating a subservient status of women.

Also, men and women both have similar strict guidelines in their behaviors. If there is one regulation for a woman, there is usually an equal corresponding regulation for a man. Women do experience repression in many Islamic countries, however, first depends on how that "repression" is defined, but is usually regards to a subservient role in society and the negative effects resulting from that status. Speaking generally, most of this repression is not based on Qur'an or Islam and at most is based on itjima or jurist-made law-hence must is cultural. The cultural behavior also has much to do with the economic status and repression of the population as a whole. Many Arab countries, not unlike many Asian or South American countries have difficulties in the status of women. It is the concept that in Arab countries such behavior since it is based on Sharr'a which has a religious foundation and spiritual enforcement that Islam condones such regulation that perpetuates the stereotype of Muslim women. See Bharathi Anandhi Venkatraman, Comment, Islamic States and the United Nations Convention on the Elimination Forms of Discrimination Against Women: Are the Shari'a and the Convention Compatible? 44 Am. U.L. Rev. 1949, 1976 (1995) ("Islam and, by extension, the Shari'a, were revolutionary phenomenon in pre-Islamic Arabia that reformed the status quo and, thus, benefitted society as a whole and women in particular."). But see

"A historical perspective, however, is a poor excuse for the current inferior status of women under Shari'a when compared to other contemporary legal systems or when judged by the emerging international standards. Although the Muslim women's legal personality is complete in theory, their access to opportunities for making that personality meaningful are rather restricted. Gender segregation and requirements of the veil and confinement to the home, as a general rule, tend to diminish the practical value of Muslim women's theoretical entitlement to certain rights and limit their abilities to realize economic independence and educational and other public achievements. Although women are not prohibited by Shari'a from expressing their opinions in public affairs, and may vote on those competing for public office, the above noted restrictions tended to inhibit their ability to exercise these rights in practice. They are also denied the competence to hold general high-ranking public office themselves." Abdullahi An-Na'im, Ph.D. The Rights of Women and International Law in the Muslim Context, 9 Whittier L. Rev. 491, 494-95.

For more article and books discussing this issue, see supra note 42.

111. For a discussion on the similarities between Christainity, Islam, and Judaism, see Karen Armstrong, A History of God: The 4000-Year Quest of Judaism, Christainity and Islam (1994).

112. See F.E. Peters, Muhammad and the Origins of Islam 2 (1994).

113. "The Prophet was the culmination of a long line of prophets -- 124,000 of them -- many no more good, exemplarly people. He [Muhammad] was the last, the seal, of the prophets, the final messanger of God." Id., at 15.

114. See id.

115. "The term 'Qur'an' in a literal sense means 'recitation', 'readings', that is a prototype, a 'concealed book' or a 'well-guarded tablet'." Islam, Caesar E. Farah (5th ed. 1994).

116. "The Koran plays a capital role in Islam rendering the Muslim faith an intellectual an intellectual religion par excellence. No assessment of Islam could hope to attain adequacy without an account of its scripture." Shabbir Akhtar, A Faith for all Season: Islam and the Challenge of the Modern World 39 (1990).

117. This "mistranslation" of the message of the earlier prophets before Muhammad account for the Muslims' principle following or Muhammad's revelations.

118. "The prophets Moses and Jesus had communicated the same message from their Lord to their peoples. It was, in Muslim eyes, only later generations of their followers which had distorted and misrepresented the message in the word." David Waines, An Introduction to Islam 101 (1995).

119. When the Prophet was about 40, in 610, on a retreat on Mount Hira he saw a vision. This was the first call. It came in the form of an angel ordering him to read-iqra-(hence, Quran, reading). 'Read', commanded the angel. Frightened, the Prophet stammered, 'I do no read'. Twice more the angel ordered him to read and the third time replied: 'Read in the name of your Lord, the Creator, who created man of a clot of blood. Read. Your Lord is most gracious. It is he who taught man by the pen that which he does not know'. The Qur'an was revealed to him.

Ahmed, supra note 59, at 15.

120. See, e.g., S.Z.H. Syed, An Introduction to Shia Beliefs, Rituals and History (4th ed. 1990).

121. Farah, supra note 115, at 82.

122. See, e.g., Akhtar, supra note 116, at 39.

123. Although the Qur'an is at the heart of Shari'a, "[t]he Qur'an contains on a few specific legal injunctions. For the most part is expounds comprehensive moral organizing principles. Most of the legal rules of Islam are extracted from the reported practices (the Sunna) of Muhammad, the Prophet of Islam, and his oral injunctions (the Hadith)." Khaled Abou El Fadl, Muslim Minorities and Self-Restraint in Liberal Democracies, 29 Loy. L.A. L. Rev. 1525 (1996).

124. "Muhammad himself cherished hopes of support from the Christain and Jew, with whose concepts he regarded his revelation as basically identical, and he did no hesitate to converse with such of his Jewish fellow-countrymen . . . " Bertold Spuler, The Age of the Caliph: History of the Muslim World 7 (1995).

125. Equality, the status of women, the rights of the less privileged (minorities, poorer working groups)-the shibboleths of our age-were reflected in the Prophet's message." Ahmed, supra note 59, at 19.

126. "Ramadan was the traditional month of retreat, and it was one night towards the end of Ramadan, in his fortieth year, when he was alone in the cave, that there came to him an angel in the form of a man." Martin Lings, Muhammad His Life Based on the Earliest Sources 43 (1983).

127. Mansfield, supra note 51, at 29; But see Payne, infra note 135; Benard Lewis, The Political Language of Islam 73-74 (1988) (asserting that Jihad does mean holy war and jihadi meaning fighter).

"Jihad is usually translated as 'holy war,' but this is misleading. Jihad is divided into two categories, the greater and the lesser: the greater jihad is the warfare in oneself against any evil or temptation. The lesser jihad is the defense of Islam, or of a Muslim community, against aggression. It may be a jihad of the pen or the tongue. If it involves conflict, it is strictly regulated, and can only be defensive. Thus Muhammad said:

In avenging injuries inflicted on us, do not harm nonbelligerents in their homes, spare the weakness of women, do not injure infants at the breast, nor those who are such: Do not destroy the houses of those who offer no resistance and do not destroy their means of subsistence, neither their fruit trees, nor their palms.

Jihad cannot be undertaken to convert others because there 'cannot be compulsion in religion' (Qur'an 2.256). If these regulations seem on occasion to be ignored, that failure is an offence to be answered on the day of judgment." The Oxford Dictionary of World Religions 501 (John Bowker, ed., 1997).

128. "Muhammad himself cherished hopes of support from the Christain and Jew, with whose concepts he regarded his revelation as a basically identical, and he did not hesitate to converse with such of his Jewish fellow-country men . . . " Bertold Spuler, The Age of the Caliph: History of the Muslim World 7 (1995).

129. Qur'an, Surah II, 62.

130. For a more of a religious perspective on many Sunni doctrines from the broad to specific praying and personal living guidelines, see Basheer Ahmed Mohyidin, Islamic Rel I gious Knowledge (1994).

131. Shi'ah [always variations in exact spelling as with many Arabic words] which means literally partisan or follower, refers to those who consider the succession to the Prophet - may God's peace and benediction be upon him - to be the special right of the family of the Prophet and who in the field of the Islamic science and culture follow the school of the Household of the Prophet. Tabatabai, supra note 109, at *3.

132. For an excellent discussion of the Shi'a from perhaps more of a historical perspective, see Moojan Momen, An Introduction to Shi'i Islam: The History and Doctrines of Twelver Shi'ism (1985). In particular to Iran, Twelver Shi'sm (relating to the Twelve Imams after the Prophet Muhammad Shi'a Muslims followed and revere as infallible) constitutes close to 92% of the Iranian Shi'a population. For an overview of the second largest group in Shi'a Islam, the Isma'elis, see Farhad Daftary, The Isma'elis: Their History and Doctrines (1990).

133. For a study discussing the Arab Shi'is, as most studies deal with Persian or Iranian Shi'is, see Yitzhak Nakash, The Shi'is of Iraq (1994).

134. Muhammad died from illness. See, e.g., F.E. Peters, Muhammad and the Origins of Islam (1994).

135. Mansfield, supra note 51, at 31; "[T]he stunned followers of Muhammad gave themselves at their grief, milling about aimlessly in the mosque. No one knew what the future would bring." Robert Payne, The History of Islam 88 (1959).

136. Mansfield, supra note 51, at 31; Payne, supra note 135, at 89.

137. See e.g., Mansfield, supra note 51, at 32' Ira M. Lapidus, A History of Islamic Societies (1988) ("Umar").

138. Id. ("Uthman").

139. Mansfield, supra note 51, at 34; "Ali naturally could not assent to the verdict that 'both pretenders "[he and Mu'awiyah'] should renounce their position when in his eyes there was only one rightful Caliph-himself." Spuler, supra note 124, at 33.

140. Mansfield, supra note 51, at 34; Spuler, supra note 124, at 34.

141. The Shiites and the Kharijites "were at opposite poles theologically." M. Montgomery Watt Islamic Philosophy & Theology: An Extended Survey (1985). For a deeper explanation of the various seats of Islam, including the Kharijites, see id., at 7 ("The Kharijites").

142. "[A]n ever increasing number of followers were ready to see in him, as the Prophet's son-in-law and father of his grandchildren; the only rightful component of that office. Soon they formed an 'Ali's Party', which was later called 'The Party' (Shi'ah)." Spuler, supra note 124, at 33.

143. There is not a basic difference between the Shi'ities and the Sunnites concerning articles of the Faith of Islam. There is, however, a disagreement between the two schools in the following two areas:

1. The Caliphate (successorship/leadership) which the Shia believe it is the right of the Imams of Ahlul-Bayt.

2. The Islamic rule when there is no clear Quranic statement, nor is there a Hadith upon which Muslim schools have agreed.

See The Major Difference Between the Shia and the Sunni, at *1 at <http://www.al-islam.org/encyclopedia/chapter3/1.html>.

144. See David Waines, An Introduction to Islam 99 (1995).

145. However, after a time, a certain "Kingship" did tend to develop after a decline in the political condition after the Prophet's death. Waines, supra note 144, at 99.

146. Nazih Ayubi, Political Islam 50 (1991).

147. Having no priests could cause some misunderstandings in clergy-penitent confidentiality as it is known in the United States since the Imam (person(s) elected at a Mosque who serve as a guide in leading prayers-generally one whom is well-knowledgeable in the Qur'an and Islam) does not have this clergy status, the principle of confidentiality does not apply to him. See Azizah al-Hibri, The Muslim Perspective on the Clergy-Penitent Privilege, 29 Loy. L.A. L. Rev. 1723 (1996).

148. See, e.g., Waines, supra note 144, at 100.

149. This was especially true in Shi'ism. "It was the manifestation of a deep unconsciousness need- a feeling in man's heart that they would be happier and more satisfied spiritually if they had a charismatic leader to follow." Watt, supra note 141, at 17.

150. "Human beings are told to use their mind and think in at least 300 places [in the Koran]..." Ahmed, supra note 59, at 16.

151. See, e.g., S.G. Vesey-Fitzgerald, Nature and Sources of Shari'a in 1 Law in the Middle East: Origin and Development of Islamic Law 87-96 (1955).

152. "The Koran, the sunnah, the ijm', qiy's." Nicolas P. Aghnides, Muhammedan Theories of Finance 23 (1969).

153. At the heart of al Shari'a is the Qur'an "There is no dispute among Muslims that the Qu'ran is the basis of the Shari'a and that its specific provisions are to be rigorously and scrupulously observed." Boussiouni, supra note 13, at xiii.

154 According to Malcolm Kerr:

"While the Western jurist is accustomed to dealing with law as an entirely existential phenomenon and relegating the question of its relation to theology to a separate field of study, classical Muslim writers tended to combine their attention to all fields of theology and public and private law in single works. They do not, for the most part, appear to have been troubled by some of the problems most perplexing to modern students of Islam. Shifts among the second, third, and fourth levels appear to them quite material and indeed entirely justified since the distinctions between the ideal and existential are less clear in the Islamic than in the Western tradition." Malcolm H. Kerr, Islamic Reform: The Political and Legal Theories of Muhammad Abduh and Rashid Rida 23-24 (1966).

155. Professor Bassiouni has his perspective and example of how some scholars might classify Islamic sources of law:

1. Chief Sources:

a. The Qu'ran, or the Holy Book of Islam.

b. The Sunna, or the authentic traditions of Mohammed.

c. The Ijma', or the consensus of opinion.

d. The Qiyas, or judgment upon juristic analogy which could also include al Ijtihad.

2. Supplementary Sources:

a. Al-Istishsan, or the deviation from certain rules based on precedents derived from other rules based on relevant legal reasoning.

b. Al-Istislah, which is an unprecedented judgment explicitly covered by the Qu'ran or the Sunna and necessitated by public interest.

c. Al-Urf, or the custom and usage.

[Bassiouni notes that other Muslim scholars have a slight variance on the order and content of Islamic law such as that of Hamidullah]

3. According to Hamidullah, the roots and sources of Islamic law, or the Usoul, are as follows:

a. The Qu'ran.

b. The Sunna, or Tradition of the Prophet.

c. The orthodox practice of the early Caliphs.

d. The practice of other Muslim rulers not repudiated by the juridconsults.

e. The opinions of celebrated Muslim jurists:

1. consensus of opinion, or Igmah; or

2. individual opinions or Qiyas.

f. The arbitral awards.

g. The treaties, pacts and other conventions.

h. The official instructions to commanders, admirals, ambassadors and other states officials.

I. The internal legislation for conduct regarding foreign relations and foreigners.

j. The customs and usage.

Bassiouni, supra note 13, at 9 citing S. Ramadan, Islamic Law, Its Scope and Equity 42 (1961); Sayf-al-Din al-Amidi, Al-Istihasan fi Usul al-Ahkam (1914), a multi-volume series of a scholar (d. 1233 A.D.) and Weiss, Interpretation of Islamic Law: The Theory of Ijtihad 26 A.J. Comp. L. 199 (1978); M. Hamidullah, Muslim Conduct of State 18 (4th ed. 1961) and A. Hassaballah, Ousoul al-Tashrii al-Islami (1977).

156. For an example of Muhammad's teachings on subjects ranging from abstinence, adultery, beauty, cleanliness, compassion, control of self to courtesy, poetry and the sick, see Allama Sir Abdullah & Al-Suhrawardy, The Sayings of Mohammed (1995).

157. Some assert it was the Kharijites that had their most important contribution to the Muslim community because they were prepared to stand up to authorities and insist that the Qur'an must be the base of discussion or life in the community. Watt, supra note 141, at 12. Aziz al-Hibri, Islam, Law and Custom: Redefining Muslim Women's Rights, 12 Am. U.J. Int'l L. & Pol'y 1, 6 (1997).

158. Id.

159. Some schools, particularly, the Shafi'i school, considers the Hadith and the Qur'an to have equal importance. At Barbara J. Metzger, Revelation and Reason: A Dynamic Tension in Islamic Arbitrament, 11 J.L. & Religion, at *7, 11 JLREL 697 (1995) (Westlaw).

160. Id.

161. It has been said that the umma electing Abu Bakr as Caliph, was the Muslim community's "first and most decisive exercise of Ijma'." Id. at *2 (citing Sir Hamilton Gibb, Constitutional Organization in Law in the Middle East (Majid Khadduri & Herbert J. Liebesny, eds., 1955)).

162. There is debate between scholars and the Sunni and Shi'a to how much of the Ijtihad can be reinterpreted. Many believe that certain of the four Sunni schools may close off the formation of Ijtihad to 150 years ago where the Shi'a tend to have a notion of more evolvement in Ijtihad. See c.f. Taha Jabir Al 'Alwani, Usul al Fiqh al Islami, Source Methodology in Islamic Jurisprudence: Methodlogy for Research and Knowledge *5-6 (Yusuf Talal DeLorenzo & A.S. Al Shaikh-Ali, tr.) at <http://www.usc.edu/dept/MSA/law/alalwani_usulafiqh/>.

163. For an outset of the Hanifi doctrines as written by Shabani, see The Islamic law of Nations: Shabani's Siyar (Majid Khadduri, tr., ed., 1966). "Shaybani's siyar was a prolific writer who set down the Hanaf § doctrines, as well as those of other jurists. . . ." Id. at 36.

164. For the Risa la, the heart of the Shafi school, and accompanying discussion, see Majid Khadduri, Islamic Jurisprudence, Shafi a's Risala (1961).

165. al-Hibri, supra note 157, at 7. Anderson, supra note 1, at 19 states that there are four main schools of thought: the Hanafi, Maliki, Shafi'i, and Hanbali.

166. Some Shi'a scholars purport the a Shi'a school of jurisprudence is the Imanis. For a comparison of the Imanis with the fours Sunni schools of jurisprudence in a variety of instances such as rules of modesty or fasting, see <http://www.al-islam.org/encyclopedia/chapter7/2.html> and <http://www.al-islam.org/encyclopedia/chapter7/3.html> respectively.

167. Many scholars only speak of "four" schools of jurisprudence; however, the author is usually Sunni who makes such an assertion ignoring the Shi'a school of jurisprudence which must be considered as well. Note the following example of this phenomenon asserting only four schools have survived, "Since 1300 AD only four schools have survived." Joseph Schact, The Schools of Law and Later Developments in 1 Jurisprudence in Law in the Middle East: Origin and Development of Islamic Law (Majid Khadduri & Herbert J. Liebesny, eds., 1955).

168. The main school is known as the Ja'faria, the twelvers, where as the shi'a and many other Islamic sects have confined the imamate to the Holy house of Ali, and his descendants, the Sunnis extended the caliphate to include al the tribal strains of Quraish, and then opened it to any qualified. All sects in Islam initially emerged as groups in rebellion against the established Sunni Dogma and/or authority and developed later into routinized religious system. Among some groups, such as the Shi'a, rebelliousness continued as a ritualistic exercise, thus continuously reinforcing the collective consciousness of the sect. The disparity between the various religious and sectarian ideologies, is based on the fact that where as the Sunni model focuses on the sovereignty of divine law and the centrality of the state, other sects focus on the sovereignty of the religious community. The multiplicity of legal reference among the Sunni is a reflection of their control of the state and the heterogenous structure of social. Initially, the recognition of the four Sunnis schools of law was more political than religious decision. The Shi'a rejected the decision of the state, and opted instead or the ja'afari law. The more restrictive approach among sects can also be observed in Isnad, (ascription), the process of seeking legal reference attributing a saying or deed to the prophet or one of his trusted companions. The Sunnis try to incorporate all the Islamic traditions, rejecting none. The Shi'a on the other hand, seek legal relevance by tracing references to the prophet , the imams and a few companions. The Shi'a do this through what they call Ijtihad (interpretation), an attempt to discriminate between reliable and unreliable sources. Where as the Sunni Ulama assume a subsidiary role to the power elite, the Shi'a Ulama, present themselves as if they were the political elite, performing the tasks normally carried out by the power elite. Unlike the Sunnis, other sects have developed a dual religious organization adapted differently to different sectarian orientation.

Fouad Khuri. I, Imams and Emirs: State, religion, and sects in Islam (1990).

169. [F]our evntually came to be predominant among Sunni Muslims: The Hanafite, Malikite, Shafiite, and Hanabalite schools, each claiming as its eponym a famous master jurists of the classical period. Shiites in contrast, insisted upon the greater monolithicity of their legal doctrine, attributing its essential formation to infallible Imams among whom the sixth, Jafar al-Sadiq (702-755), was noted for the abundance of his legal doctrine.

The HarperCollins Dictionary of Religion 529-30 (Jonathan Z. Smith, ed., 1995).

170. "[T]he principle of adherence to tradition (at first, to local tradition) which later finally crystallized as the doctrine of ijima, that whatever had been accepted generally by the community was to be regarded as sanctioned by God." Marshal G.S. Hodgson, The Venture of Islam, Conscience and History in a World Civilization, 1 The Classical Age 324 (1974).

The Shi'a school is similar to devotion to the Qur'an but subject to some divergence in the Sunnah and there is less room for scholarly interpretation particularly if there is access to a living Oman. Vesey-Fitzgerald, supra note 151, at 97.

171. [T]he Malikis gave greater prominence to the ijma' of Madinah; the Hanbalis to the ijma' of the companions; while the Shafi'is and the Hanafis considered it applied to all Muslim and was not restricted in time to the earliest generations. Nevertheless, early Hanafi ijma' in practice was essentially "Iraqain in scope." Kemal A. Faruki, Islamic Jurisprudence 68 (1975).

172. The Shi'a are particular in their belief of the proper hadith or sunnah or authenticating such:

"Shi'ism, in addition to seeking to authenticate the chain of transmission of hadith, considers the correlation of the text of the hadith with the Quran as a necessary condition for its validity. In Shi'ite sources there are many hadiths of the Prophet and the Imans with authentic chains of transmission which themselves assert that a hadith is contrary to the Quran has no value. Only that hadith can be considered valid which is in agreement with the Quran."

Tabatabai, supra note 109, at *32.

173. "Basing itself on the Hadiths, Shi'ism does not act upon those Hadiths which are contrary to the text of the Quran." Tabatabai, supra note 109, at *32.

174. See Shia Scholars, at *1 at <http:www.al-islam.org/encyclopedia/chapter7/1.html>. Shi'a tend to place a higher value on knowledge and human intellect in solving jurisprudential questions, whereas the Sunni tend to place emphasis on divine revelation and that such interpretation is much more difficult to some by. See Benard Weiss, Interpretation in Islamic Law: The Theory of Ijtihad, 26 Amer. J. Comp. Law 200, 204, 210 (1978).


"The dominant school of Islamic law throughout East Africa is that of the Shaf'is, while in the West that of the Malikis prevails almost everywhere. The only serious rival to the Shaf'is in the East is the heterodox Ibadi school, which has a considerable following in Zanzilar (and a much smaller one on the mainland) among those of Umani extraction and the few Africans who have become converts thereto. Virtually the only other minority element among the indigenous peoples of Africa is provided by the small Ahmadi following found on both sides of the continent. . . . On the East there are Indian (and baluchi) Hanafis, 'Asharis and Isma'ilis of both the Khoja (Nizari) and Bohora (Mustal'li) factions besides the Shaf'is from Arabia, Madagascar, the Comor Islands and elsewhere, Ithna Ashari from Persia and Bahrain, and Zaydis from the Yemen; while in the West there are chiefly Syrians and Lebanese who follow either the Hanafi or Ithna 'Ashari schools together with a few Indians of heterogenous allegiance." J.N.D. Anderson, Islamic Law in Africa 7-8 (1970).

176. The differences between these schools are at times significant with respect to the rights accorded to women. For example, the Hanbali school recognizes a woman's right to determine certain nonessential but enforceable provisions of her marriage contract, while the Hanafi school does not. The schools also differ in their treatment of divorce by judicial process. Under Hanafi law, women have very narrow grounds for instigating court-mandated dissolution of a marriage. By contrast, under the Maliki school, a wife may file for a court-ordered divorce under relatively broader grounds. Islam underscores the importance of the differences among various schools of law by giving Muslims the right to switch schools. A [Sunni] Muslim may, "even for the sake of convenience where one schools's legal regime proves more favourable to this purpose than another's," adopt a different school. Bharathi Anandhi Venkatraman, Comment, Islamic States and the United Nations Convention on the Elimination of All Forms of Discrimination Against Women: Are the Shari'a and the Convention Compatible?, 44 Am. U.L. Rev. 1949, 1970-71 (1995) (citations omitted).

177. al-Hibri, supra note 157, at 6.

178. Id. at 7.

179. Id.

180. It was this fact that Iraq and Kuwait were both part of the Ottoman Empire that was Iraq's rationale that Kuwait belonged to it because it was the British who unlawfully decided the boundaries and split the countries. For arguments and analysis on this issue, see Majid Khadduri, Iraq's Claim to Sovereignty of Kuwayt, 23 N.Y.U. J. Int'l L. & Pol. 5 (1990).

181. Anderson, supra note 1, at 20.

182. Bernard Weiss, Interpretation in Islamic Law: The Theory of Ijtihad, 26 Am. .J. Comp. L. 199, 201 (1978).

183. 183 Id. at 199.

184. Id. at 203.

185. See, e.g., Badr, supra note 39, at 188.

186. Id.

187. For a discussion on how Shari'a is slow to change in some respects, see Ann Elizabeth Mayer, Islam and the State, 12 Cardozo L. Rev. 1015 (1991).

188. The five schools of thought . . . generally agree that Islamic laws (1) change with the passage of time and with the change of place or circumstance; (2) must avoid harm; (3) may be discarded if they are based on a cause ("AIlah") which itself has disappeared, and (4) must serve the commonwealth ("public maslaha").

See al-Hibri, supra note 157, at 7-8. Al-Hibri goes on to point out that because of the liberality in this application of Islamic law that "in applying these principles the all-male judges tended to define such notions as 'harm' and 'commonwealth', and analyze concepts such as 'illah' and circumstantiality, in terms which not only reflected a purely male perspective but often the perspective of the political authorities as well." Id. at 8.

189. Abu-Rabi, supra note 52, at 198. Abu-Rabi cites an argument "that a new ijtihad . . . is necessary because of the new circumstances, needs, and challenges facing modern Muslims." Id..

190. Badr, supra note 39, at 189.

191. Id.

192. Although Islamic law is "religious," Islamic law is not as is frequently assumed, a religious law, in the generally accepted sense of this adjective. The confusion stems from the fact that Islamic law does cover religious duties and obligations, a subject with which the other two major legal systems are not concerned.

Id. at 188.

193. Badr, supra note 39, at 188.

194. Id.

195. Id.

196. Id.

197. But see Cook, supra note 235, at 45 ("Although it does not add up to a comprehensive law-code, the Koranic treatment of law covers a wide range of subject-matter.").

198. Id. Some authorities believe that determining what portion of the Qur'an is highly contested. See Urfan Khaliq, Beyond the Veil? An Analysis of the Provisions of the Women's Convention in the Law as Stipulated in Shari'ah, 2 Buff. J. Int'l L. 1, 8 (1995).

199. CISG, art. 78.

200. See CISG, Section III, "Interest."

201. Article 78 of the CISG "only sets forth the obligation to pay interest as a general rule" but it does not "set forth a time starting from which interests may be calculated" nor does it "stipulate the rate of interest or who the rate is to be determined by a tribunal in the absence of explicit guidance from the Convention." Ferrari, supra note 10, at 119 (citing, inter alia, Peter Schlechtriem, Uniform Sales Law: The UN-Convention on Contracts for the International Sale of Goods 48, 100 (Vienna 1986)) (stating obligation to pay interest is a general rule), Barry Nicholas, Art. 78 in Commentary on the International Sales Law 3, 571 (Milan 1987), Fritz Enderlein & Dietrich Maskow, International Sales Law 56, 311 (1992), Rolf Herber & Beate Czerwenka, Internationales Kaufrecht. Kommentar su dem Ubereinkommen der vereinten Nationen vom 11. April 1980 Uber Vertrage Uber den Internationalen Warenkauf 47, 348 (Munich 1991), Leif Sevon, Obligations of the Buyer under the Vienna Convention on the International Sale of Goods, Juridisk Tidskrift 327, 341 (1990), Jakob Ziegel, Report to the Uniform Law Conference of Canada on the Convention on Contracts for the International Sale of Goods 96, 149 (Uniform Law Conference of Canada ed., 1981).

202. See Amtsgericht Kehl, Oct. 6, 1995 translated at CISG Case Presentation, 951006g1, at *3 <http:cisgw3.law.pace.edu/cgi-bin/SFgate.../cisg/wais/db/cases2/951006g1.html;7'%00> (Gerd. A. Zimmermann, tr., Oct. 12, 1997) (". . .[S]ince CISG Article 78 leaves open the amount of the claim for interest, national law is applicable. . ."; "[T]he relevant Italian law . . . is applicable."). There are several solutions available for determining the proper rate of interest. At least one arbitration case suggests the rate of interest is best determined by the best the systems with the closest related currency to the contract.

"The rate in force in the state whose law is applicable; the rate in force in the place of business of the creditor; the rater in force in the place of procedure The arbitrator shares another view. In his opinion, the rate of interest is linked to a precise currency on the legal rate in force at a place of business located in a country which has a high inflation figure and, consequently, a high rate of interest. The same reasoning would lead to the exclusion of the law applicable to the contract, the lex fori, or that of the place of payment . . . [here], [c]learly, the financial aspects of the sale are linked with the German Mark. The applicable rate of interest is therefore the German one." Editorial Remarks, Arbitration ICC, 1992, CISG Case Presentation, 927585i, <http://cisgw3.law.pace.edu/cgi-bin/SFgate.../cisg/wais/db/cases2/927585il.html;7'%00, at *11 (Oct. 12, 1997).

203. Phanesh Koneru, A General Review of Interest Issues Under the CISG Citing the Ruling in this Case and other CISG Cases, CISG Case Presentation, <http://cisgw3.law.pace.edu/cgi-bin/SFgate.../cisgw/wais/db/cases2/927585il.html;7'%00, at *11 (Oct. 12, 1997) citing Case 5 U 261/90 (Fr. v. F.R.G., Oberlandesgerict Frankfurt am Main (June 13, 1991), Recth der Internationalen Wirtschaft (RIW) 591 (1991)).

204. See id. at *69, n.88.

205. See Winship, supra note 19, at 552 citing Landegericht Stuttgart (3 KfH O 97/89) (31 August 1989), 35 RIW 984 (1989) and Landegericht Frankfurt a.M. (3/11 O 3/91) (16 Sept. 1991), 37 RIW 952 (1991).

206. Ferrari, supra note 10, at 118, n.843 citing inter alia Peter Schlechtriem, Recent Developments in International Sales Law, 18 Israel L. Rev. 323 (1983) ("stating that during the 1980 Vienna Conference '[there were ... irreconcilable, ideologically as well as economically motivated convictions on the issue of payment of interest for outstanding debts, in particular the purchase price, some Islamic countries, for instance, rejected an obligation to pay interest for religious reasons.'").

207. Note the lack of reservation on interest by Egypt Syria, and Iraq supra note 30.

208. See id.

209. Recall CISG, art. 7:

"(1) In the interpretation of this Convention, regard is to be had to its international character and the need to promote uniformity in its application and the observance of good faith in international trade.

"(2) Questions concerning matters governed by this Convention which are not expressly settled in it are to be settled in conformity with the general principles on which it is based or, in the absence of such principles, in conformity with the law applicable by virtue of the rules of private international law."

210. Traute Wohlers-Scharf, Arab and Islamic Banks: New Business Partners for Developing Countries 13 (1983).

211. See Mohamed Arif, Islamic Banking, 2 Asian-Pacific Economic Literature 48 (1988).

212. See, e.g., Abdall El-Sheikh, infra note 218, at 582.

213. "The nasir Social Bank, established in Egypt in 1971, was declared an interest-free commercial bank, although its charter made no reference to Islam or Shariah (Islamic law)." Arif, supra note 211, at 48.

214. Id.

215. Id.

216. For a thorough but brief discussion on the function of Islamic banking, see Zubair Iqbal & Abbas Mirakhor, Islamic Banking (International Monetary Fund, Washington, D.C., 1987).

217. See Wohlers-Scharf, supra note 210, at 14-16.

218. For a discussion on Islamic banking secrecy, see Dr. Fath El-Rahman Abdall El-Sheikh, Bank Secrecy and Confidentiality Law in Practice-A Middle Eastern Perspective, 14 Dick. J. Int'l L. 577 (1996).

219. Lebanon has perhaps the most liberal regime on bank secrecy and confidentiality in the Middle East. A democratic country with a multi-party political system, Lebanon was once the financial nerve of the Middle East before the oil boom in the Arabian Gulf. To enhance its regional economic prestige at the time, Lebanon promulgated the Bank Secrecy Act, 1956. Id. at 583. citing Sheikh Salish Kamil, Islamic Banks and Financial Derivatives, 15 Arab Banks J. 43 (1995) and Bank Secrecy Act (1956) (Lebanon) (on file with Dr. Fath El-Rahman Abdall El-Sheikh). "By virtue of section (1) of the Act, all banks established in Lebanon as closed companies and branches of foreign banks and licensed by the Minister of Finance to do business in Lebanon are subject to the bank secrecy Act." Id. at 583-84. "The most liberal provision in the Act on the protection of banking accounts is section (4). This section prevents any blocking or seizure of all funds in the accounts without the written permission of the customers owning these accounts." Id. at 584.

220. This gulf state has succeeded in replacing war struck Lebanon as the financial nerve of the Middle East. It is interesting to note that Bahrain presently hosts more that fifty off-shore banks from different parts of the world. In fact, such confidence in the stability of the financial system is connected to bank secrecy and confidentiality.

Abdall El-Sheikh, supra note 222, at 585 citing Bahrain Agency Law (on file with Dr. Fath El-Rahman Abdall El-Sheikh).


The Kingdom of Saudi Arabia . . . also adheres in practice to the principle of bank secrecy. There is however, no express provision in any law or administrative circular or directive respecting bank secrecy. The established practice in Saudi Arabia is that only the Minister of Finance and National Economy is authorized to lift bank confidentiality and disclose the balances of an individual's account." Abdall El-Sheikh supra note 222, at 586.

222. "Kuwait could be considered a financial haven in the Middle East. One of the very few democratic countries in the Arab world, Kuwait has succeeded in holding onto its bank secrecy code despite the horrible consequences of the Iraqi invasion." Abdall El-Sheikh, supra note 222, at 587 referring to Law No. 32, 1968, Currency, the Central Bank of Kuwait and Banking (as amended). "The secrecy code has been consistently followed by commercial banks in Kuwait." Id.


"Qatar-the concept of bank secrecy and confidentiality in this country, like Kuwait, is well recognized. Section (57) of the Central Bank Act, 1993 authorizes the Central Bank to wholly or partially publish information provided to it by commercial banks carrying on business in the country. Such information is published provided that publication does not least to disclosure of the financial affairs of a customer of any bank unless publication is approved in writing by both the bank and its customer." Abdall El-Sheikh, supra note 222, at 588 citing Law No. 15, '57, 1993.

224. "This Gulf State established a comprehensive system on banking secrecy and confidentiality legally documented in many provision scattered among several laws." Abdall El-Sheikh, supra note 222, at 588 citing inter alia Banking Law of 1974, art. 4.4.07 (on file with Dr. Fath El-Rahman Abdall El-Sheikh).


"There are two legal provisions which govern bank secrecy and confidentiality in the Republic of Yemen. One is section (45) of the Central Bank of Yemen, 1991. This section authorizes the Central Bank to wholly or partially publish information or statements obtained from commercial banks or financial institutions in the course of its banking functions. The publication of such information and statements, however, is not permitted under section (45) if it divulges the financial institution unless a written approval of such bank or institution has been previously obtained." Abdall El-Sheikh, supra note 222, at 589-90 citing Central Bank of Yemen, 1991, '45 (on file with Dr. Fath El-Rahman Ab all El-Sheikh).

"The second Yemanese legal provision on banking secrecy is section (78) of the Banking Act of 1991." Id.

226. The prevailing view among Egyptian bankers is that each bank is bound not to divulge any information or facts required while rendering services to a customer if the customer requests secrecy. The origin of this view is found in the contract with the customer. The bank contract is viewed as imposing a passive obligation on non-disclosure. There is no special law, as yet, on this subject though there are several proposals. Abdall El-Sheikh, supra note 222, at 590 citing Hassan Hosni, Banking Services Contracts (in Arabic) 274-75 (1986).

227. "It is sometimes forgotten that Israel's war against Palestinians in Lebanon is but a continuation-as brutal, as inhumane, and as contemptible-of its war against those innocent Palestinians civilians who were driven from their homeland in 1948." Said, supra note 74, at 70-71.

228. Abdall El-Sheikh, supra note 222, at 592.

229. riba is prohibited or banned. "There are five types of conduct under the shari'a: mandatory, recommended, permitted, recommended against, and banned." Steven D. Jamar, The Protection of Intellectual Property Under Islamic Law, 21 Cap. U. L. Rev. 1079, 1081 (1992).

230. Arif, supra note 211, at 49.

231. Interest is also prohibited in Halacha-the Jewish body of law which is the counterpart to Shari'a. 541 (The Jewish prohibition on interest is based in the Old Testament, or Torah, at Exodus 22:24 ("If you lend money to my people, to the poor who are in your power, do not act toward them as a creditor. Take no interest from them."); Leviticus 25:35-37 ("If your brother is poor, and his means fail with you, then you shall uphold him. . . . Do not take interest from him nor increase, but fear your God. Let your brother live with you. Do not lend him money on interest, or give him food on interest."); and Deuteronomy 23:20-21 ("You shall not deduct interest from loans to your countrymen whether in money or food or anything else than can be deducted as interest. You may deduct interest from loans to foreigners, but not from loans to your countryman.")). Daniel Klein, The Islamic and Jewish Laws of Usury: A Bridge to Commercial Growth and Peace in the Middle East, 23 Denv. J. Int'l L. & Pol'y 535, 541 (1995). Jews may charge interest to non-jews or gentiles, but some authorities believe interest should not be charged to Muslims because "they worship the same God." Id. at 542.


"As far as money is concerned, the Sharia does not regulate how a man spends it nor does it restrict his freedom to venture. Islam tolerates personal freedom and the right to accumulate wealth, but at the same time, it rejects the materialism which brings about the exploitation of human labour by the possessor of capital." Makarram Abdul Hakeen, Islamic v. Western Banking, at *1 at <http://www.users.dircon.co.uk/~thirdway/files/articles/iswe.html>.

233. There are five verses in the Qur'an that prohibit the use of Riba:

"Those who swallow Riba can't rise up saver as he ariseth whom the devil hath prostrated by [his] touch. That is because they say: Trade is just like Riba , whereas Allah permitteth trading and forbiddeth Riba . He unto whom an admonition from his Lord cometh and [he]desists [in obedience], he shall keep that which is past, and his affair henceforth is with Allah. As for him who returneth [to Riba ] such are the rightful owners of the fire. They will agbide therein (II: 275).

"Allah hath blighted Riba and made sadaqat [charities] fruitful. Allah loveth not the impious and the guilty (II: 276).

"O, you who believe, keep your duty with Allah and relinquish what remains of Riba , if you are believers (II: 278).

"But if you do [it] not, then be apprised of war from Allah and His Messenger; and if you repent, then you shall have your capital. Wrong not, and you shall not be wronged (II: 279).

O, you who believe, devour not Riba , doubling and redoubling, and keep your duty with Allah, that you may be successful (III: 129)." Waqar Massod Khan, Towards and Interest-Free Islamic Economic System: A Theoretical Analysis of Prohibiting Debt Financing 23-24 (1985).

234. Id.

235. Some scholars assert that "[t]he bulk of Islamic law as it actually evolved is thus non-Koranic in substance." Michael Cook, Muhammad 45 (1996).

236. "Usury" is defined as:

"Collectively, the laws of a jurisdiction regulating the charging of interest rates. A usurious loan is one whose interest rates are determined to be in excess of those permitted by the usury laws. An illegal contract for a loan or forbearance of money, goods, or things in action, by which illegal interest is reserved, or agreed to be reserved or taken. An unconscionable and exorbitant rate or amount of interest. An unlawful contract upon the loan of money, to receive the same again with exorbitant increase. The reserving and taking, or contracting to reserve and take, either directly or by indirection, a greater sum for the use of money than the lawful interest. A profit greater than the lawful rate of interest, intentionally exacted as a bonus, for the forbearance of an existing indebtedness or a loan of money, imposed upon the necessities of the borrower in a transaction where the money is to be returned at all events."

Old English law. Interest of money; increase for the loan of money. The taking of money of any compensation whatever for the use of money.

Black's Law Dictionary 1385 (5th ed., 1968)(citations omitted). The Black's Law dictionary definition is very comparable to the common definition. See, e.g., Webster's New Universal Unabridged Dictionary 2013 (2d ed., 1979).

237. For a detailed discussion on the intricacies and variances of various transactions constituting Riba, see Nabil A. Saleh, Unlawful Gain and Legitimate Profit in Islamic law: Riba, Gharar and Islamic Banking (1986).

238. Elimination of Interest from the Economy: Report of The Council of Islamic Ideology (Pakistan) in Money and Banking in Islam, infra note 273, at 183.

239. Id. at 184.

240. For example the flour of wheat in exchange for wheat may be usurious because of the difficult determination of the equity in the exchange between the two. The Hedaya, A Commentary on the Mussulman Laws 291-92 (Charles Hamilton, tr., 1975). The sale of flesh for a living animal was not usurious. Id.

241. Implied usury is abominable. If a person take from a merchant something he may have occasion for, and leave with him a certain number of drums (for example) he is guilty of an abomination because, in thus taking what he wants, he derives and advantage from a loan (namely, the money he leaves with the merchant;) and the Prophet has prohibited us from taking interest on loans. He must therefore first deposit the drims with the merchant, and then take from his whatever he may want; as the money is in this case a trust, and not a loan, insomuch that the merchant is not subject to pay a compensation in case of the loss of it. Id. at 606.

242. [I]n the matter of lending money at interest (Riba'n-nasa'a), Islam prohibits this as socially pernicious and also prohibits other practices that rest implicitly on the same principle. In principle it is therefore illegitimate for banks to lend money to individual clients at interest though they may lend it in exchange for a share in the profit or loss of the borrower's enterprise. Malcolm H. Kerr, Islamic Reform: The Political and Legal Theories of Muhammad Abduh & Rashid Rida (1966), 214.

243. See Professor Franco Ferrari lectures, supra note 81.

244. "Islam is a religion. It is also, almost inseparably from this, a community, a civilization, and a culture." Abu-Rabi, supra note 52, at 596.

245. As discussed above, the Nordic states have a reservation to Part II of the CISG but this reservation is allowed by Article 92 of the CISG. The United States and China have a reservation to Article 1(1)(b) but such reservation is only allowed by Article 95. See supra text with accompanying notes 26-30.

246. CISG, art. 6: "The parties may exclude the application of this Convention or, subject to article 12, derogate from or vary the effect of any of its provisions."

247. Note Bassiouni's articulation of the adaptability of Islamic law making:

a. An inclination toward establishing general rules, indulging in great detail.

b. Precepts based on actual events and not hypothetical suppositions, thus strengthening case law as an expression of human behavior and judicial experience, which result in a deliberate and not coincidental determination.

c. The permissiveness of all that which is not prohibited, thus illustrating the flexibility which is needed to prevent human paralysis, and intellectual stagnation.

d. The wording of specific prohibitions in such terms as to allow implementations by reason of necessity, social and public.

e. The use of language allowing the tempering of specific prohibitions by legal excuse or justification arising from necessity in its broadest form and granting judicial power to adapt as the requirements of society and circumstances justify.

f. The permissiveness and liberality in adapting useful and necessary guidelines not incompatible with the Qu'ran or Sunna.

Bassiouni, supra note 13, at 9-10.

248. Saudi Arabia resists the modern trend. "Saudi Arabia has adhered to the Hanbali school 'in rather a puritanical form' and has resisted the modern trend to follow western law." Paul E. Pompeo, East Meets West: A Comparison of Government Contract Dispute Resolution in the Common Law and Islamic Systems, 14 Loy. L.A. Int'l & Comp. L.J. 815, 837 (1992).

249. David Pearl, A Textbook on Muslim Law 196 (1979)

250. Id.

251. Id.

252. Id.

253. See Enid Hill, Comparative and Historical Study of Modern Middle Eastern Law, 26 Amer. J. Comp. Law 279, 302 (1978).

254. Pearl at 198.

255. "The Islamic system could not be applied again . . . with regard to certain of its provisions dealing with economic matters. . . ." Enid Hill at 303.

256. Id. at 302.

257. Pearl at 198.

258. Id. at n.6.


"Today, 34 states with majority Muslim populations have writ ten constitutions. Of those, 23 (to which should be added Oman and Saudi Arabia) have officially proclaimed Islam to be the state religion and/or Shari'a to be the principal source of law. A few, such those of Turkey, the Gambia, and Senegal, are avowedly secular, while Iran's is explicitly Islamic; all the other constitutions are attempts at fusing the two perspectives, typically by relegating Shari'a and Shari'a court jurisdiction to a limited area such as family law." Donna E. Arzt, Relgious Human Rights in Muslim States of the Middle East and North Africa, 10 Emory Int'l L. Rev. 139, 141 (1996). See also supra note 260.

260. "[D]uring the last 150 years most Arab Islamic states have adopted some form of European-style legal code to govern commerce and business while leaving other matters such as personal status, marriage, and inheritance to relatively pure Islamic law." Jamar, supra note 229, at 1083.

261. Some Islamic moderates, although a minority, believe that the prohibition of riba "applies only to usurious interests rates on consumptive credits and not to payments resulting from productive investment . . ." Ayubi, supra note 146, at 179.

262. Id.

263. Id.

264. Id. at 180.

265. Id. at 181.

266. Ayubi, supra note 146, at 183 (citing "Atiyya, 1987:71").

267. Id.

268. Id. at 185.

269. Id. at 184-85.

270. Id. at 184.

271. Ayubi, supra note 146, at 184 (citations omitted).

272. Wilson, supra note 33, at 132 (joint Arab/European bank ventures are growing).

273. "[M]any Muslims engage in interest-bearing transactions." Daniel Klein, Comment, The Islamic and Jewish Laws of Usury: A Bridge to Commercial Growth and Peace in the Middle East, 23 Denv. J. Int'l L. & Pol'y 536 (1995).

274. An arbitral tribunal within an Islamic state may have little difficulty in awarding interest. See, e.g., Monroe Leigh, Judicial Decisions: Decisions of the Iran-United States Claims Tribunal, Arbitration-Interest Award-Attorneys' Fees, Sylvania Technical Systems, Inc. v. Islamic Republic of Iran, AWD 180-64-1, 80 Am. J. Int'l L. 365 (1986) (determining the rate of damages in a contractual agreement between Iran and United State company without the issue of the prohibition of riba ever being raised).

275. For some others issues facing and stifling Islamic banks, see Money and Banking in Islam (Ziauddin Ahmed, Munawar Iqbal & M. Fahim Khan, eds., 1983).

276. See supra text accompanying notes 163-191.

"[T]he corpus of Islamic law as it developed over the ages is manmade in the sense that it resulted from the efforts of the jurists of the various schools of law. If civil law can be described as a legislator's law as to its source and common law as a judge's law, then Islamic law is a jurist's law. There is very little that is rigid and immutable in Islamic law." Bassiouni, et al., Islamic Law, Survey of Islamic International Law, 76 Am. Soc'y Int'l L. Proc. 56 (1982).

277. See Saleh, supra note 237, at 30-31.

278. See Khan, supra note 233, at 91.

279. Though, as one author asserts, issues which have been solved long ago in other legal systems are very much alive in Muslim systems and it may be difficult to determine exactly how Islam and secularism will co-exist and at what levels. See Ann Elizabeth Mayer, Islam and the State, 12 Cardozo L. Rev. 1015 (1991).

280. See supra note 155.

281. The principles of "the sanctity of agreements and the rule of reciprocal treatment" are not only p principles of international law, but principles "rooted in Quranic commandments." Bassiouni, et al., a Survey of Islamic Religious Law, supra note 276, at 58-59.

"The Islamic version of the principle, pacta sunt servanda, can be traced back to the Quran (V:1; IX: 4; XVI: 91) where strict compliance with contractual undertakings, also towards non-Muslims, is elevated to the level of a religious duty for believers. The duty of honoring a treaty with non-Muslims is even given priority over the duty of mutual help among believers when duties are in conflict (VIII: 72). The binding force of agreements is, of course, the fundamental norm of treaty law and the basis of all conventional rules of international law. Reciprocity, also prescribed in the Quran (II: 194: IX: 7; XVI: 126), is an integral part of the mechanism by which customary rules of international law are created. It has even been said that 'given the present structure of the international community, reciprocity is at the origin of all international law.' There may be no exaggeration in this statement, since the subjects of international law are also creators of its rules and since states are naturally jealous of their equality. Every state wants to be treated no worse than it treats the others, and can expect no better treatment than that which it affords other states." Id. at 59.

282. "[I]n Islam, a contract or treaty is not merely a secular affair, but in fact a religious one; it is, therefore, safeguarded by divine as well as human sanctions." Bassiouni, et al., Contracts and Litigation in Islamic law, supra note 276, at 73.

Pace Law School Institute of International Commercial Law - Last updated August 21, 2000

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