The Unidroit Principles and the Shari’ah Standards: any room for cooperation?

Abstract

This article presents potential cooperation between the Unidroit Principles of International Commercial Contracts (Unidroit Principles) and the Shari’ah Standards (SSs) issued by the Accounting and Auditing Organization for Islamic Financial Institutions. It starts from the new trend that considers the contribution of soft law to resolving disputes in international commercial contracts: the 2015 Hague Principles, the 2019 Guide, and the 2023 African Principles. The article evaluates the SS-making process by using the input-process-output model and proposes a legal basis and scenarios for cooperation between the Unidroit Principles and the SSs in international commercial dispute resolutions. It then explores some divergences that limit the scope of this cooperation. The article recommends the publication of SSs concerned with invalidity and the three defects of consent: mistake, fraud, and threat. It also emphasizes the need to set up model clauses for Islamic finance cross-border contracts, including cooperation with the Unidroit Principles and publishing online case law.