Modernity and Sharia
Discuss how modernity and the introduction of Western law has affected the form and function of Sharia
N.B: This is an academic essay that was written in 2017 - not everything in this article - may be accurate or applicable today.
This essay will determine the extent to which the form and function of Sharia has been affected by the introduction of Western-style law and the pressures of modernity. Sharia refers to “a code of law or divine injunctions that regulate the conduct of human beings in their individual and collective lives”; it governs all aspects of a Muslim’s life ranging from matters of belief and worship (Aqaid), and socioeconomic and legal systems (Ahkam).[1] The function of Sharia can be found in Al-Maqasid (objectives), which defines the purpose of Sharia as maintaining the preservation and protection of religion, life, family, property, intellect, and honour.[2] The form of Sharia is comprised of a several sources including the Qur’an and the Hadith (the actions of Prophet Muhammad); Sharia is not present in a single form since it was developed from the use of juristic tools such as Qiyas (analogical reasoning), ijma (consensus), which are based on Ijtihad.[3]
In a neoliberal capitalist system in which the free market takes precedence over moral and religious prescriptions, the form and function of Sharia must evolve to accommodate Islamic Financial Institutions (IFI).
This essay will discuss the evolution in the form and function of Sharia in relation to: the erosion of the Islamic legal system during the Ottoman Empire; the emergence of a market-driven transnational law of Islamic Finance; the modern pressures of standardisation and the pursuit of profit and its effect of the function of Sharia particularly with respect to achieving its objectives (Al-Maqasid).
The introduction Western-style law and the erosion of the Islamic Legal system:
Hallaq notes prior to the introduction of “Western-style law” there were four essential elements to Sharia: (1) a complete judiciary with a developed court system
(2) a positive legal doctrine (3) legal methods of interpretation that reflect intellectual and juristic self-consciousness (4) doctrinal legal schools which focused on teaching juristic practices with respect to the interpretation and application of Sharia.[4]
In the Ottoman Empire jurists were employed as custodians of Muslim society, they controlled the institutions of legal education; managed municipal affairs such as collecting taxes; and administered the affairs of under-privileged groups. In addition, jurists had epistemic authority since they possessed knowledge of how the law was created, interpreted and applied.[5]
However, during the 18th and 19th century, the Ottoman Empire made a series of structural reforms to the Islamic legal system (Tanzimat) to modernise Sharia as a result of political pressure from growing European powers.[6] During the Tanzimat, the Ottoman Empire eroded the Islamic legal system upholding Sharia by: creating secular technical colleges aimed at training new legal professionals to displace the traditional jurists; establishing a hierarchical court system that gave judges (qadi) more power; removing jurists from their posts at legal and educational institutions such as the madrassa (school)[7]; this created a dramatic shift in the balance of legal power between jurists and the state.[8] Hallaq argues, “The ruin of the madrasa was the ruin of Islamic law, for its compass of activities epitomized all that had made Islamic law what it was.”[9] The Ottoman’s attempt to codify Sharia (Mejelle) allowed Islamic legal doctrine to be applied in secular courts and hence changed the way Sharia was traditionally interpreted and applied.[10]
The introduction of “Western-style law” began with the transplantation of the French Civil Code into the Egyptian constitution by Al-Sanhuri; the French civil code later became the primary source of law for many Muslim polities across the Arabian Peninsula.[11]
The destruction of the Islamic legal system, the centralisation of the state and the transplantation of European Continental law has created a vacuum in expertise and experience needed to interpret and apply Sharia.[12] Muslim polities now have constitutions based on Western legal codes and their lawyers, judges and administrators only have a cursory knowledge of Sharia. Forster argues in a modern context it is important to differentiate Islamic law from the state law of Muslim countries; some Muslim countries cite Islamic law as the principal source of law in their constitution whereas others have simply enacted statutes based on Islamic law. He argues in both cases “Islamic law” (Sharia) is not necessarily state law since in the former Islamic law is no more than a source of law and in the latter God is no longer the ultimate authority, it is the state.[13]
Evolution of Sharia into a transnational body of law: Creating a transnational law of Islamic Finance:
The absence of an Islamic legal system poses a challenge to the existence of Islamic finance as well as the revival of Sharia; this has inspired the creation of a
market-driven regulatory system for Islamic Finance. The creation of institutions such AAOIFI (Accounting and Auditing Organisation for Islamic Financial Institutions) and Sharia Supervisory Boards (SSB) represent an attempt to establish a transnational legal system to reconstruct the Islamic legal system, which created, interpreted and applied Sharia during the Islamic Empire.
The incorporation of transnational regulatory provisions into domestic legal systems is contributing to the creation of a transnational law of Islamic Finance. Although guidelines issued by organisations such as AAOIFI do not have jurisdictional authority, countries such as Bahrain and Malaysia have sought to establish legal institutions, which codify these regulatory provisions into their domestic laws.
For instance, Malaysia has created a Sharia Advisory Council (SAC), which has the power to review Islamic financial products. The SAC’s decisions are binding and can become part of the law; this can be argued to be a re-indigenisation of Sharia in Malaysia. However, the strong common law tradition has meant courts have not often deferred to the SAC, many cases that are disputed are breach of contracts attempting to use a Sharia defence.[14]
Islamic jurisprudential principles derived from Sharia are no longer confined to the umma (Muslim community) they are even being adopted in the form of regulation in countries where Christianity is the dominant religion, such as Russia.[15]Although Sharia no longer forms the basis of state law, it is being gradually codified in domestic legal systems such as Bahrain.
The use of fatwas (legal opinion) to authenticate Islamic financial products as Sharia compliant further illustrates the development of a transnational source of law for regulating Islamic finance. Muftis are employed by Sharia supervisory boards to preside over the permissibility of financial products.[16]
A growing distance from Al-Maqasid – Have the pressures of modernity altered the function of Sharia?
The preoccupation of regulating form over substance has produced a superficial regulatory system, which has resulted in Sharia being used as a form of corporate governance as opposed to an authoritative body of legal rules aimed achieving Al-Maqasid such as the “Wide Circulation Wealth”.[17]
Gamal argues it is no longer sufficient to regulate the legal structures of a transaction since the low transaction costs involved in circumventing Sharia allow IFIs to “financially engineer” products that meet regulatory requirements but remain substantively similar to conventional debt-based financial products.[18] For instance, IFIs frequently use products such as Murabaha, (purchase followed by cost plus credit-sale[19]), which is considered by many scholars to be a circumvention of riba; IFIs have also sought to adopt a “partnership structures” (mudharaba), which operates like a mutual or private equity fund.[20]. In addition, the globalisation of financial markets has put pressure on IFIs to standardise their Islamic financial contracts; legal standardisation is utilised to reduce transaction costs, reduce the burden on Sharia scholars and improve consumer confidence in the authenticity and Sharia compliance of financial products.[21]
The pressure on IFIs to remain profitable and attractive to investors alongside the lack of a “living legal instrument” to enforce a strict interpretation of Sharia concerning the permissibility of products including a consideration of Al-Maqasidhas reduced Islamic Jurisprudential principles into ethical guidelines. For instance, Mufti’s are often restricted to addressing specific questions regarding the permissibility of financial products as opposed to engaging in an assessment of whether IFIs are contributing to “Sharia’s norms of economic justice, equality of opportunity and relief of the poor[22]”.
In order to overcome the issue of regulating Islamic an institution which only began in the 1970s by “using source material that is medieval in its origin” [23] Muslims must invoke the juristic tool of ijtihad which has not been utilised for several centuries; this raises the question as to current efforts to reinterpret the principles of Sharia are an attempt to re-open the gates of Ijtihad.
Conclusion:
In conclusion, the introduction of Western-style law alongside the radically different modern context in which we now live has fundamentally altered the form and function of Sharia. The imposition of Western-style law served to erode the Islamic legal system upon which Sharia was based, this eliminated the institutions and expertise, which would have continually reinterpreted and applied Sharia across several centuries to ensure it remained compatible with the 21stcentury. The destruction of an entire legal system and the transplantation of European Continental law particularly French civil law across Muslim polities created a vacuum in expertise and experience in applying Sharia to commercial transactions.[24] Using juristic tools jurists have to reimagine the extent to which medieval prohibitions apply in a radically different context.
Attempts to reconcile the absence of regulation premised on Sharia principles for a growing Islamic finance industry has led to the development of a market driven regulatory system. A system of transnational law developed by independent regulatory authorities such as AAOIFI have effectively created a system of transnational law which countries such as Bahrain have begun to incorporate. This has arguably changed the way in which Sharia is being interpreted, developed and applied. The historical imposition of Western legal codes and the current neoliberal capitalist system has forced scholars, IFIs and even Muslim consumers to revaluate the form and function of Sharia.
Bibliography
Books:
Ayub M, Understanding Islamic Finance (John Wiley and Sons Ltd. 2007)
Ercanbrack J, The transformation of Islamic law in global financial markets (Cambridge University Press 2015)
Hallaq, W (2005) The origins and evolution of Islamic law Cambridge University Press
Hallaq, W An introduction to Islamic Law (Cambridge University Press 2009)
Hefner, R (2011) The New Cambridge History Of Islam (Volume 6) Muslims and Modernity Culture and Society since 1800 Cambridge University Press
Vogel, FE and Hayes, SL (1998) Islamic Law and Finance: Religion, Risk, and Return Brill Academic Publishers p47
Warde, I (2007) Islamic Finance in the Global Economy Edinburgh University Press
Yazbeck, HY and Stowasser, BF (eds) (2004) Islamic law and the challenges of modernity AltaMira Press U.S.
Journals:
Foster, N (2010) Islamic Perspectives on the Law of Business Organisations I: An Overview of the Classical Sharia and a Brief Comparison of the Sharia Regimes with Western-Style Law (11) European Business Organization Law Review 3
Hallaq, W (2004) Juristic Authority vs. State Power: The legal crises of Modern Islam Journal of Law and Religion
Hamoudi, H (2011) ‘Present at the Resurrection: Islamic Finance and Islamic Law’ (26) American University International Law Review 1107 p1118
Hamoudi, H (2007) Schizophrenia: On Form and Function in Islamic Finance (7) Chicago Journal of International Law605
Hogarth, D (2016) ‘The rise of Islamic finance: post-colonial market-building in central Asia and Russia’ (92) International Affairs 115 pp115-6
Hill, E (1988)‘Al-Sanhuri and Islamic Law: The Place and Significance of Islamic Law in the Life and Work of 'Abd al-Razzaq Ahmad al-Sanhuri, Egyptian Jurist and Scholar, 1895-1971’(3) Arab Law Quarterly, 182
Karmali, A (2007) Sharia and Muslim Legal Thought in the 21st Century: The Paths Ahead (13) Yearbook of Islamic and Middle Eastern Law 3
Opwis, F (2005) ‘Maslaha in Contemporary Islamic Theory’ (12) Islamic Law and Society 182
Internet Sources
Vogel, F (2008) University of Washington ‘The Sixth Farhat J. Ziadeh Distinguished Lecture in Arab and Islamic Studies - Shari‘a as Law and Legal System: Changing Perceptions’ https://depts.washington.edu/nelc/pdf/event_files/ziadeh_series/2008shari'a-frankvogel.pdf p15
[1] Ayub, M (2007) Understanding Islamic Finance John Wiley and Sons Ltd p21
[2] Opt. Cit. Ayub, M (2007) p23
[3] Opt. Cit. Ayub, M (2007) pp21-22
[4] Hallaq, W (2005) The origins and evolution of Islamic law Cambridge University Press p3
[5] Hallaq W, Juristic Authority vs. State Power: The legal crises of Modern Islam Journal of Law and Religion (2004) Page246
[6] Ercanbrack J, The transformation of Islamic law in global financial markets (Cambridge University Press 2015)
[7] Opt. Cit. (2004) Hallaq pp256-7
[8] Opt. Cit. (2004) Hallaq p255
[9] Opt. Cit. (2004) Hallaq pp256-7
[10] Opwis, F (2005) ‘Maslaha in Contemporary Islamic Theory’ (12) Islamic Law and Society 182 pp186-7
[11] Hill, E (1988)‘Al-Sanhuri and Islamic Law: The Place and Significance of Islamic Law in the Life and Work of 'Abd al-Razzaq Ahmad al-Sanhuri, Egyptian Jurist and Scholar, 1895-1971’(3) Arab Law Quarterly, 182
[12] Karmali, A (2007) Sharia and Muslim Legal Thought in the 21st Century: The Paths Ahead (13) Yearbook of Islamic and Middle Eastern Law 3 p4
[13] Foster N, (2010) Islamic Perspectives on the Law of Business Organisations I: An Overview of the Classical Sharia and a Brief Comparison of the Sharia Regimes with Western-Style Law, European Business Organization Law Review 11: 3-34 page 7-8
[14] Opt. Cit. Ercanbrack Book p109
[15] Hogarth, D (2016) ‘The rise of Islamic finance: post-colonial market-building in central Asia and Russia’ (92) International Affairs 115 pp115-6
[16] Warde, I (2007) Islamic Finance in the Global Economy Edinburgh University Press pp286-9
[17] Hamoudi, H (2011) ‘Present at the Resurrection: Islamic Finance and Islamic Law’ (26) American University International Law Review 1107p1118
[18] Opt. Cit. Gamal (2008), p617
[19] Opt. Cit. Gamal (2008), p606
[20] Hamoudi, H (2007) Schizophrenia: On Form and Function in Islamic Finance (7) Chicago Journal of International Law 605 p612
[21] Opt. Cit. Ercanbrack p108
[22] Vogel, F (2008) University of Washington ‘The Sixth Farhat J. Ziadeh Distinguished Lecture in Arab and Islamic Studies - Shari‘a as Law and Legal System: Changing Perceptions’ https://depts.washington.edu/nelc/pdf/event_files/ziadeh_series/2008shari'a-frankvogel.pdf p15
[23] Opt. Cit. Hamoudi H, (2011) p1110
[24] Vogel, FE and Hayes, SL (1998) Islamic Law and Finance: Religion, Risk, and Return Brill Academic Publishers p47
