Fading Vestiges of Sharia in Commercial Agency/Distributorship (Termination and Compensation)

Abstract

Shortly after the oil crisis in 1973 the Shan'a, which hitherto had lain dormant except in family law, started to re-emerge in the area of mu'amalat or business transactions. This renaissance followed a long period dunng which most Arab countries had been losing their legal identity: the Civil Codes of Syria, Lebanon) and Egypt, closely modelled on colonial patterns, paid lip service to the Shan'al and in the Gulf States a series of ad hoc statutes prepared in the 1960s by Egyptian and Syrian legal advisers to US and Rritish oil companies were drafted along Western models, chiefly for the convenience of foreign business.2 In Saudi Arabia, Bahrain and the Gulf States (then called the Trucial States), the civil codes and ad hoc legislation (combined with detailed contractual instruments drafted according to Western techniques), ofien defeated the application of the Sha7i'a with respect to the law of contract and business transactions. The Shari'a's profile began to heighten in the early 1970s when many Arab consiitutions declared Islamic law to be a primary source of law, e.g. Egypt (Art 2 ofthe Constituuon of 11 September 1971), Bahrain (Art. 2 ofthe Constitution of 6 December 1973), Qatar (Art. 1 of the Provisional Constituiion of 2 A^pril 1970), and the UAE (Art. 7 ofthe Provisional Constituiion of 18July 1971). The old Constituiion ofthe Yemen Arab Republic (Constitution of 28 December 1970) had gone so far as to refer to the Shansa as the source of all laws. Meanwhile, the ownership and management of oil wealth were gradually transferred to Arab hands. The awareness of their economic power3 probably contributed to cause certain states, e.g. Saudi Arabia) to