Islamic Element in Islamic Financial Contracts as a Reason for Referring Disputes to International Commercial Arbitration

This master dissertation is aimed at evaluation of the ability of state courts and international commercial arbitration to ensure the application and protection of the Islamic element in Islamic financial contracts. The master dissertation consists of an introduction, three chapters, five paragraphs, a conclusion and a bibliography. The first chapter elaborates the concept of Shari’ah and its key features as a source of regulation of relationships in Islamic finance. The second chapter deals with to the conflict regulation of contractual obligations arising from Islamic financial contracts. The third chapter of the paper is devoted to resolving disputes from Islamic financial contracts in international commercial arbitration. In addition, the option of referring disputes to niche arbitration institutions - Islamic arbitration centers - is being explored. Based on this research the following conclusions were made: firstly, the Islamic element can potentially be included in Islamic financial contracts through the Shari’ah choice of law, the incorporation of the Shari’ah provisions, and the limitation of legal capacity in the constituent documents of the Islamic financial institution; secondly, state courts in resolving disputes often neglect the Islamic element, as a result of which the fundamental principle of contract freedom is violated; thirdly, international commercial arbitration by virtue of its inherent nature has undeniable advantages in terms of the possibilities for the application and protection of the Islamic element; fourthly, referring the disputes with the Islamic element to the Islamic arbitration institutions fills the missing element of the Shari’ah infrastructure.