Posted on August 20, 2009 at 9:08 PM
The Abu Dhabi-based law firm Agha & Shamshi has decided to conduct its practice in compliance with Shari’ah. Shari’ah is the Islamic legal code, based on the Qu’ran and the Sunnah of Muhammad. It regulates all aspects of life, such as marriage, religious rituals, social issues, and business transactions. On its website, Agha & Shamsi describes the decision to practice according to Shari’ah as a way to “develop the cause of ‘genuine’ Islamic finance.” The firm engages in work similar to that of any other law firm, but makes sure that its projects are “seamlessly harmonized with and weaved into Shari’ah principles.”
This means, among other things, that Agha & Shamshi has had to turn away clients. For example, Shari’ah forbids the charging of interest on money lent. This practice is considered usury under Shari’ah law, or “unjustified” increase between the value of goods given and the countervalue of goods received. Thus, Agha & Shamshi has declined offers concerning dispute resolution matters entailing debt with interest. Furthermore, Shari’ah states that “profit is the reward of diligent performance” and that monetary gain from chance, speculation, and conjecture is forbidden. Agha & Shamshi therefore refuses work from any clients involved in casinos, interest-lending, or similar businesses.
Regardless, the firm has had lots of business. In Asia Legal Business, Agha states that there are several opportunities available for his firm. Though Shari’ah forbids many activities, much is permitted within the legal system, such as “projects, construction and EPC contracts, energy projects, and project finance done through Islamic financing.” In fact, the move may bolster firm activity: Middle Eastern businesses can go to Agha & Shamsi to ensure that they are conducting themselves in accordance with Shari’ah. The firm’s website boasts several deals of this nature, where Agha & Shamsi lawyers have advised on projects that are wholly Shari’ah financed, or advised on the structuring of Shari’ah compliant funds.
The decision to completely comply with Shari’ah may be part of a larger trend. As Asia Legal Business reports, Norton Rose has begun to concentrate on Islamic finance, citing it as an important component in its Gulf strategy. Norton Rose partner Campbell Steedman says, “the spread of Islamic finance and principles is set to continue,” and that understanding it “will be an essential part of…the development of the market.”
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