Shamil Bank Of Bahrain EC V Beximco Pha
All England Law Reports/2004/Volume 4 /Shamil Bank of Bahrain EC v Beximco Pharmaceuticals Ltd and others - [2004] 4 All ER 1072
[2004] 4 All ER 1072
Shamil Bank of Bahrain EC v Beximco Pharmaceuticals Ltd and others
[2004] EWCA Civ 19
COURT OF APPEAL ,CIVIL DIVISION
POTTER, LAWS AND ARDEN LJJ
11, 12 DECEMBER 2003, 28 JANUARY 2004
Conflict of laws - Contract - Proper law of contract - Bank - Bank entering into Islamic financing agreements with defendants - Governing law clause providing for English law subject to principles of Sharia'a - Defendants defaulting on agreements - Bank issuing proceedings - Whether agreements governed by English law alone or English law subject to principles of Sharia'a (Issue) - Contracts (Applicable Law) Act 1990, Sch 1, art 1.
(Fact)
The claimant bank was incorporated under the laws of Bahrain. Bahrain embraced and encouraged Islamic banking practice as national policy, and the bank held itself out as applying Islamic banking principles. The bank entered into a number of financing agreements with the first and second defendants, in respect of some of which the third to fifth defendants had provided guarantees. The governing law clause in the financing agreements provided that, 'subject to the principles of the Glorious Sharia'a', the agreements should be governed and construed in accordance with English law. Various defaults and terminating events (defined under the terms of the financing agreements) occurred and the bank issued proceedings in the English courts. On an application made by the bank for summary judgment, the defendants argued, inter alia, that on a true construction of the governing law clause, the financing agreements were enforceable only in so far as they were valid and enforceable both (i) in accordance with the principles of Sharia'a, and (ii) in accordance with English law; and that in fact the agreements were invalid and unenforceable under the principles of Sharia'a. The judge granted the bank's
[2004] 4 All ER 1072
Shamil Bank of Bahrain EC v Beximco Pharmaceuticals Ltd and others
[2004] EWCA Civ 19
COURT OF APPEAL ,CIVIL DIVISION
POTTER, LAWS AND ARDEN LJJ
11, 12 DECEMBER 2003, 28 JANUARY 2004
Conflict of laws - Contract - Proper law of contract - Bank - Bank entering into Islamic financing agreements with defendants - Governing law clause providing for English law subject to principles of Sharia'a - Defendants defaulting on agreements - Bank issuing proceedings - Whether agreements governed by English law alone or English law subject to principles of Sharia'a (Issue) - Contracts (Applicable Law) Act 1990, Sch 1, art 1.
(Fact)
The claimant bank was incorporated under the laws of Bahrain. Bahrain embraced and encouraged Islamic banking practice as national policy, and the bank held itself out as applying Islamic banking principles. The bank entered into a number of financing agreements with the first and second defendants, in respect of some of which the third to fifth defendants had provided guarantees. The governing law clause in the financing agreements provided that, 'subject to the principles of the Glorious Sharia'a', the agreements should be governed and construed in accordance with English law. Various defaults and terminating events (defined under the terms of the financing agreements) occurred and the bank issued proceedings in the English courts. On an application made by the bank for summary judgment, the defendants argued, inter alia, that on a true construction of the governing law clause, the financing agreements were enforceable only in so far as they were valid and enforceable both (i) in accordance with the principles of Sharia'a, and (ii) in accordance with English law; and that in fact the agreements were invalid and unenforceable under the principles of Sharia'a. The judge granted the bank's