A financial product is deemed to be certified as Shariah compliant if it does not contravene Shariah principles in its legal documentation. Those principles could be qualified and/or agreed upon as law even if not related to a specific state as stipulated by the EU Rome convention. However, a contract governed by other jurisdictions could be Shariah compliant, too, if Shariah principles are not violated.
Which law is relevant in a contract is typically referred to in the Governing Law clause. The extent to which Shariah issues could and would be considered in a judgement in a certain jurisdiction differs between legal systems and jurisdictions as well as whether a court or an arbitration process was chosen.
- Guest Analysis: Shari'ah Clauses in Financial Contracts, by Dr. jur. Klaus Peter Follak