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27 Transnat'l L. & Contemp. Probs. 249 (2017-2018)
Islamic Law and the Limits of Amorality: Reconceptualizing the Legal Ethics of Transnational Islamic Finance

handle is hein.journals/tlcp27 and id is 273 raw text is: Islamic Law and the Limits of Amorality: Re- Conceptualizing the Legal Ethics of Transnational Islamic Finance C6sar Arjona* & Greg Jehle I. IN TRODU CTION .......................................................................................... 249 II. TERMINOLOGY AND BACKGROUND ............................................................ 251 III. WESTERN LEGAL ETHICS AND ISLAMIC LAW ............................................ 252 IV. H!YAL: FORMALISM OR FUNCTIONAL EXITS? ............................................ 256 A . H istoric V iew s ...................................................................................... 256 B. M odern Views and Criticism s ............................................................ 259 V. DOCTRINAL PLURALISM AND INDETERMINACY: TAKHAYYUR A N D TA LFIQ ............................................................................................... 263 VI. LEGAL CHANGE, STAKEHOLDERS, AND COMMUNAL WELFARE: THE ETHICS OF M ASLAHAH ............................................................................... 270 V II.C ON CLU SION ............................................................................................. 274 I. INTRODUCTION The growing prominence of the Islamic finance industry, achieved with the participation of transnational law firms staffed by (often non-Muslim) common and civil law-trained lawyers, raises unique problems of legal ethics.1 Muslim customers and investors demand services that fully comply with Shari'ah rules, primarily the prohibition of riba (commonly understood as interest but in fact encompassing a wider range of transactions involving unlawful excess). 2 At the same time, a variety of forces (e.g., market, regulatory) push Islamic financial institutions (IFIs) towards the emulation of interest-based finance.3 . Cisar Arjona (J.S.D, M.Phil., LL.M, LL.B) is Associate Professor at ESADE Law School (Barcelona, Spain) and former Academic Co-Director of the Center for Transnational Legal Studies (London). 'Greg Jehle (J.D., Georgetown University Law Center (2016), M.A., Arab Studies, Georgetown University (2016)) is an Associate in the Worldwide Projects Group at Clifford Chance US LLP. 1See Mahmoud Mohieldin, Realizing the Potential of Islamic Finance, 77 ECON. PREMISE 1, 1-2 (2012). These lawyers come from a variety of jurisdictions but overwhelmingly tend to receive their primary legal trainings in a common law setting. The market for Islamic-finance-related legal services is dominated by the so-called Magic Circle of elite British firms as well as several of the largest U.S.-based multinational firms. See Islamic Finance, LEGAL 500, http://www.legal500.com/c/united-arab-emirates/islamic-finance (last visited Jun. 21, 2018) (listing the leading firms and attorneys in Islamic finance). 2See NABIL A. SALEH, UNLAWFUL GAIN AND LEGITIMATE PROFIT IN ISLAMIC LAw 13 (1986) (defining riba as unlawful advantage by way of excess or deferment). For an alternative approach to riba, see MAHMOUD A. EL-GAMAL, ISLAMIC FINANCE: LAW, ECONOMICS, AND PRACTICE 47, 51-52 (2006) (noting that not all forms of riba are synonymous with interest and should instead be understood as illicit trading in credit); but see Rafic Yunus Al-Masri, Are All Forms of Interest Prohibited?, 17 J. KING ABDULAZIZ U.: ISLAMIC ECON. 37, 37-41 (2004) (arguing that not all forms of riba are prohibited). 3See Haider Ala Hamoudi, You Say You Want a Revolution: Interpretive Communities and the Origins of Islamic Finance, 48 VA. J. INT'L L. 249, 253 (2008) (explaining how Islamic notions of economics can be developed or manipulated).

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