08 Nov 2010

SHARIA AS A SOURCE OF UAE LAW

Authored by: Michael Webb

SHARIA AS A SOURCE OF UAE LAW

For many lawyers within the UAE who have qualified and gained experience working in jurisdictions within Europe, the US or elsewhere, the prospect of working in an environment with a legal system based on Islamic Sharia may be rather daunting. In this article, Michael Webb offers some guidance as to how, and to what extent, Sharia comes to be a source of UAE law and what the implications of this are for legal practitioners in the UAE.
 
In brief:

  • Islamic Sharia is a source of UAE law, but it is not the only source.
  • Where UAE law contains a specific provision, UAE courts will give effect to that provision.
  • A UAE court will pass judgment according to Sharia in the absence of a provision of UAE law covering the issue to be determined.
  • UAE courts will rely on principles of Islamic jurisprudence in the construction and interpretation of UAE law.

The basics, what is Sharia?
Sharia, meaning ‘way’ or ‘path’, is the divine law of Islam. Its principles are laid down in two primary sources:

  • the Qur'an (the Holy book in Islam), consisting of Allah’s divine revelations; and
  • the Sunnah (the saying and deeds of the Prophet Mohammed).

In addition to these two primary sources, Islamic Jurisprudence (figh) recognises a number of secondary sources, which may include:

  • consensus;
  • analogical deduction;
  • reason.

It is important to emphasise that there are a number of schools of Islamic jurisprudence, and that those schools differ both in their recognition of certain secondary sources and in the weight or order of precedence that they give to the secondary sources.
 
A common misconception about Sharia
It is a commonly held misconception among non-Muslims is that Sharia is concerned only with ritual and religious matters. However, this is not the case. Sharia addresses every aspect of human life, including issues relating to succession planning, banking, contracts, property, as well as family and social issues.
 
So, Sharia is of wide application, and divides human conduct into five categories:

  • conduct which is obligatory (fard)
  • conduct which is recommended (mustahabb)
  • conduct which is neutral (mubah)
  • conduct which is discouraged (makruh)
  • conduct which is forbidden (haraam).

How, then, does Sharia come to be a source of UAE law?
The starting point is the UAE Constitution, which was issued as a 'Provisional Constitution' on 18 July 1971 by the Rulers of the six Emirates that originally formed the United Arab Emirates (Ras Al Khaimah joined in 1972) and was made permanent in 1996.
 
Article 7 of the Constitution provides, in translation:
 
'Islam is the official religion of the Federation and the Islamic Sharia is a main source of its legislation'.
 
Note that the Article says a main source, not the main source, so it is clear that UAE law need not use Sharia as its only or even its principal source.
 
Some jurists have tried to argue that Article 110 of the Constitution, which provides, in translation, that 'Federal laws shall be promulgated in accordance with the provisions of this Article and other appropriate provisions of the Constitution’, means that any UAE law that does not take Sharia as its source is unconstitutional because it violates Article 7 of the Constitution. This, it is submitted, is too narrow an interpretation:
 
1.   Firstly, Article 7 of the Constitution provides that Sharia is a source of UAE legislation, not that it is the only source.
 
2.   Secondly, UAE courts regularly give effect to contractual provisions for the payment of interest, notwithstanding that, under Sharia, the charging of interest is haraam or forbidden.
 
3.   Thirdly, the UAE Civil Code expressly provides that a judge is to pass judgment according to Islamic Sharia ‘[where] there is no provision in the Civil Code covering the issue to be determined’. Thus, where there is an express provision of the Civil Code, or any other codified piece of applicable legislation, the Federal Supreme Court has settled on the principle that such provision or legislation is presumed to be in accordance with Sharia.
 
This brings us to consider the UAE Civil Code
The UAE Civil Code, issued as Federal Law No. 5 of 1985, may be regarded as the basic law of the UAE, applying where there is no specific legislation to the contrary, and where specific legislation is silent.
 
Each of the first three Articles of the Civil Code contains important provisions about the role of Sharia in the UAE legal system.
 
Firstly, Article 1 of the Civil Code provides, in translation:
 
'If the judge finds no provision in this Law, he has to pass judgment according to the Islamic Sharia'.
 
Article 1 then gives guidance on how the judge is to go about that task, by listing the order of precedence of the Islamic schools of jurisprudence to which the judge must have regard in reaching his decision:
 
1.   Firstly he must have regard to the principles of jurisprudence laid down by the schools of Imam Malik and Imam Ahmad Bin Hanbal.
 
2.   Secondly, if no solution is to be found in either of those schools, the judge must look to the schools of Imam Al Shafi'i and Imam Abu Hanifa.
 
Secondly, Article 2 of the Civil Code provides, in translation, that:
 
‘the rules and principles of Islamic jurisprudence shall be relied upon in the understanding, construction and interpretation of these provisions'.
 
Thirdly, Article 3 of the Civil Code provides, in translation, that:
 
‘public order shall be deemed to include matters relating to personal status such as marriage, inheritance and lineage, and matters relating to sovereignty, freedom of trade, the circulation of wealth, rules of private ownership and the other rules and foundations upon which society is based, in such a manner as not to conflict with the definitive provisions and fundamental principles of the Islamic Sharia’.
 
The following principles are apparent from the above:

  • Islamic Sharia is a source of UAE law, but it is not the only source.
  • Where UAE law contains a specific provision, UAE courts will give effect to that provision.
  • A UAE court will pass judgment according to Sharia in the absence of a provision of UAE law covering the issue to be determined.
  • UAE courts will rely on principles of Islamic jurisprudence in the construction and interpretation of UAE law.

What are the implications for legal practice in the UAE?
The most important implication for practitioners is to be ever mindful of the possible impact of Sharia, particularly when being asked to advise on innovative financial or commercial products.
 
Practitioners should not fall into the trap of reading an English translation of a UAE law, finding a provision that apparently covers the issue under consideration and go away thinking that the question is settled. Practitioners need to consider how a UAE court would construe and apply that provision in practice and how and to what extent Islamic jurisprudence may affect the construction and interpretation of the provision.
 
As a practical example of the importance of this, we point to a recent case heard before the Federal Supreme Court involving Margin Trading Agreements. In that case the Federal Supreme Court reversed previous decisions that held Margin Trading Agreements were haraam or forbidden under Sharia. The Court laid down the principle that commercial transactions are permissible unless they are shown to be expressly (or by necessary implication) repugnant to Sharia. The Court relied on the fact that Margin Trading Agreements are referred to in the UAE Banking Law, Federal Law No. 10 of 1980, and on the presumption mentioned above: that where there is an express provision of codified legislation, such provision is presumed to be in accordance with Sharia. Accordingly, the Court held that Margin Trading Agreements were valid and enforceable under UAE law.