Shari’ah Compliant International Sale of Goods—Mere Possibility or Impending Reality?

Abstract

The study of international trade law comprises of the contracts of sale, carriage, insurance and any financing agreements with banks of financial institutions to facilitate payment for the goods in question. The main features of international commercial law are, among others, to ensure certainty in the parties’ rights and obligations by ensuring that the law is consistent and predictable. Multilateral treaties play an important part in international trade law. International contracts of sale under the conventional system have largely been entered into or made under uniform rules such as the United Nations Convention on Contracts for the International Sale of Goods 1980 (CISG) and complimented by standard form contracts such as the INCOTERMS (International Commercial Terms). However, despite the growing recognition and significance of shari’ah-based transactions, in particular Islamic banking and finance and takaful (Islamic insurance) globally, the development and usage of Islamic principles in areas of international contracts of sale of goods have somewhat been very sluggish or almost absent. There are currently no uniform laws based on the Islamic regime or shari’ah principles in parallel to the above-mentioned conventional system to regulate international contracts of sale of goods. Comparisons will be made between the CISG and the shari’ah principles applicable to contracts of sale of goods and exploring the prospects of a new model of uniform law based on the shari’ah or Islamic principles.