Demystifying Middle East regulatory systems

By Jody Glenn Waugh and Ashish Banga, Al Tamimi & Company

The Middle East can, for some, represent an unknown quantity and the prospect of conducting business in the region is a daunting one. The reality is quite the opposite. Although there are peculiarities that exist in the Middle East, especially when considering financing transactions, the region has a well developed legal and regulatory system providing an environment where international and local financial institutions thrive, and unique financing structures are developed and implemented to meet customer demands.

Civil law region

All Arab states are civil law countries and, with the exception of Lebanon, prescribe in their constitutions Islam as the religion of the state. With the exception of Jordan, all to a greater or lesser degree prescribe Shari’a as “a” or “the” source of legislation.

Jody Glenn Waugh Al Tamimi & Company 银行金融部门合伙人 Partner, Banking & Finance Department Al Tamimi & Company
Jody Glenn Waugh
Al Tamimi & Company
Partner, Banking & Finance Department
Al Tamimi & Company

While civil law jurisdictions are nothing new, it is not uncommon for questions to be raised around the applicability of Shari’a law, or the jurisdiction of Shari’a courts in the Middle East in the context of financing transactions. While we do not propose to answer this question in detail in this article, it is sufficient to say that for financing transactions the (codified) civil and commercial laws of the relevant jurisdiction will be applied. In relation to Shari’a courts, in the UAE and many other Arab states the jurisdiction of such courts is limited to inheritance, divorce and child custody matters. All commercial matters fall within the ambit of the commercial courts. Such courts are permitted to refer to Shari’a principles, however this would typically be in the absence of clear legislation and/or established customary business practices.

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Jody Glenn Waugh is a partner and Ashish Banga is an associate in the banking & finance department of Al Tamimi & Company


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