Shariah

Sharia(h)

Islamic principles and jurisprudence derived from a number of sources, including the Quran. Principles relevant to the financial markets include overlapping prohibitions on riba (interest), maisir (speculation akin to gambling), gharrar (uncertainty) and unjust enrichment.

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sukuk

ijara

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+ Sharia(h)

International, USA

Islamic law that governs the social, political and economic relationships and actions of Muslims and Islamic institutions. Sharia is derived from three primary sources:

• The Quran: the word of God.

• The Sunnah: the practices and traditions of the Prophet Mohammed.

• The Hadith: the accounts of the sayings of the Prophet Mohammed.

There are also two secondary sources for Sharia:

• Ijma'a: consensus of Muslim scholars.

• Qiyas: reasoning or by legal analogy.

Although its principles are contemplated or otherwise taken into account in the drafting of Islamic finance documents (for example, structuring agreements to avoid interest or riba), Sharia is not a codified body of laws. As a result, agreements are not generally governed by Sharia law, but New York or English law.