Transfers of rights and obligations in the UAE: a comparative analysis in the light of English law, French law and the shari'a

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Transfers of rights and obligations in the UAE: a comparative analysis in the light of English law, French law and the shari'a

in Yearbook of Islamic and Middle Eastern Law Online


1 I.e. the copyright to (originally) the MS-DOS program and others developed subsequently.

2 See, for example, the UNIDROIT' Convention on International Factoring, Ottawa, 1988, available from 3 In which, as a result of the divergence among the schools, certain selected view(s) are given. 4 N.H.D. Foster, "Commercial security over movables in the UAE: a comparative analysis in the light of English law, French law and the shari'a", in this 2"earbook, vol. 4 (1997-1998), p. 1. 5 N.H.D. Foster, "Guarantees in the UAE: a comparative analysis in the light of English law, French law and the shari`a", in this 2"earbook, vol. 5 (1998-1999), p. 42. 6 The opportunity has also been taken to correct some infelicities and errors and to make some improvements.

See e.g. Rudolf Carnap, "Empiricism, semantics and ontology", in Rudolf Carnap, Meaning and Necessity: A Study in Semantics and Modal Logic, Chicago University Press, 2nd edn, 1956, p. 205, reprinted in Jaegwon Kim and Ernest Sosa (eds.), Metaphysics: An Anthology, Blackwell, 1999, p. 14. 8 Another pair of words much used is "benefit" and "burden".

9 J. Ghestin, "La transmission des obligations en droit fran5ais positif", in La transmission des obligationt. Dús Journées ditudesjutidiquesjean Dabin, 1980, p. 3. 10 OshIey Roy Marshall, The Assignment of Chotet in Action, Pitman, 1950, Chapter 1 ("The nature of a chose in action"); Chapter 2 ("The nature and history of assignments of choses in action"), passim. u �, p. 1.

12 Sometimes obligations are also transferred, as with the assignment of leases in English law.

i3 See Marshall, op. cit., p. 18, where, in a discussion on the ambiguity of the term "chose in action", which can mean both the tangible object and the right over that object, he asserts that: "The thing apart from the rights of a person over it is of no legal importance." One can take this even further. Professor Pollock wrote that: "A thing is, in law, some possible matter of rights and duties conceived as a whole and apart from all others, just as, in the world of common experience, whatever can be separately perceived is a thing." He explained this by saying: "For a material object is really nothing to the law, whatever it may be to science or philosophy, save as an occasion of use or enjoyment to man, or as an instrument in human acts ... a thing remains, for the lawyer's purposes, that which is attributed by law to the natural or conventional thing in regard to the rights and duties of person" (Frederick Pollock, "What is a thing?" Lam Quarttrly Reviem, vol. 10, 1894, pp. 318, 320-321).

14 Part of Williams's definition of a chose in action is "the benefit of some action which is valuable as tending to result in the ownership of land, goods, or money". T C. Williams, "Property, things in action and copyright', LawQuarterly Review, vol. 11, 1895, p. 223, cited in Marshall, op. cit., p. 7 (emphasis added). ls Part of Salmond's definition of a chose in action is: "a proprietary right in personam". John William Salmond and C.A.W Manning,Jurisprudence, Sweet and Maxwell, 8th edn, 1930, p. 481, note (b), cited in Marshall, op. cit., p. 7. �6 Marshall defines the two kinds of right as: "A right in rem is a right which avails against persons generally; a right in personam is one which avails against a determinate person or number of persons only" (op. cit., p. 23). Marshall even makes a distinction between a real right and a right which arises against a particular person who infringes that right, which he calls a "right in personam against the infringer" (pp. 19-20).

17 Terence Parsons, "Referring to nonexistent objects", Theory and Decision, 1979, vol. 11, pp. 95-110, reprinted in Kim and Sosa, op cit., p. 36. See, for example, Joanna Benjamin, Interests in Securitits: A Proprietary Law Analysis of the International Securities Markets, Oxford University Press, 2001.

19 See generally the various sources cited in L.S. Sealy and R.J.A. Hooley, Text and Materials in Commercial Law, Butterworths, 1994, pp. 34-40. zo [1965] AC 1175, at 1248-1249 (emphasis added). The particular right in question was the right of a deserted wife concerning the matrimonial home. 21 [1965] AC 1175, at 1248. Rights to payment of money are not "essentially dependent on the mutual claims of [the parties]", nor are they provisional or subject to review. It is this straightforward character of the right to payment which enables it to be a property

cont. right. This situation causes much controversy, and is often expressed in terms of "receivables" (i.e. rights to payment of money) and the "proceeds" of such receivables. See Lord Millett's discussion in Agnew v Commissioner of Inland Revenue [2001] 3 3 WLR 454, where the question was "whether a charge over the uncollected book debts of a company which leaves the company free to collect them and use the proceeds in the ordinary course of its business is a fixed charge or a floating charge" (Lord Millett, §1), and where the Privy Council considered that, in the context of the distinction between a fixed and a floating charge at least, making too fine a distinction between a right to payment of money and the result of the exercise of that right made "no commercial sense because alienation and collection are merely different methods of realising a debt by turning it into money, collection being the natural and ordinary method of doing so" (Lord Millett at §36). See also the articles cited by Lord Millett at §1, i.e. R.M. Goode, "The codification of commercial law", Mondale Law Review, vol. 14, 1988, p. 135. zz Of course, delivery is not the only way to signal the transfer of the right, and the attribution of a significance symbolic of the transfer to other acts was itself presumably an essential step in the "dematerialization" of the process and the invention of the transfer process for intangibles. The separation of contractual rights from the transfer of legal title in real property transactions owes its existence to a time when contract, and other factors specific to land sales, did not exist as such.

z3 Where the transferee is a holder in due course. Note the requirement of being a "holder", i.e. being in possession of something physical. z4 Some purportedly general discussions of assignment concentrate on rights and obligations concerning monetary sums. This is not surprising since historically they were by far the commonest and, at least in English law, the idea of debt pre-dated any general idea of contract, but it can be disconcerting. zs These paragraphs owe much to Philip R. Wood, Comparative Law of Security and Guarantees, Sweet and Maxwell, 1995, p. 32.

zb See G.J. Tolhurst, "Assignment, equities, The 7iident Beauty and restitution", Cambridge Law Journal, 1999, p. 546 at 555. 27 For example, Collins MR, stated in Tblhurst v. Associated Prwtland CementManufacturers (1900) Ltd [1902] 2 KB 660, at 668, citing Liversidge v. Broadbent (1859) 4 H & N 603, and cases collected in the notes to Lampleigh v Brathwait 1 Sm LC, l Oth edn, p. 136: "It is, I think, quite clear that neither at law nor in equity could the burden of a contract be

cont. shifted off the shoulders of a contractor on to those of another without the consent of the contractee." " There was an exception in equity where a decree of specific performance could be granted: see, for example, Cozens-Hardy LJ in Tblhurst associated 1'nrtland Cement Manufacturers (1900) Ltd [1902] 2 KB 660, at the same case, at 677. �8 See Guenter Treitel, The Lam of Contract, Butterworths, 10th edn, 1999, p. 623, discussing the difference between Durbam Bros v. Robertson [1898] 1 QB 765 and Tancred v. DelaBoa Bay, etc., Railmay (1889) 23 QB 239. =9 See Wood, op. cit., pp. 33 et seq., which is the source for most of this section.

30 See ibid., pp. 33-35, where Philip Wood identifies two main groups of jurisdictions, those which allow "non-possessory" transfers, and those which do not. An important consequence of a requirement that transfers must be "possessory" is that transferred rights must be specifically identified, and this precludes generic transfers and transfers and rights arising in the future. 31 [1902] 2 KB 660, at 668 (emphasis added). He quotes Lord Denman CJ in Humble v. Hunter (1848) 12 QB 310, 317: "You have a right to the benefit you contemplate from the character, credit, and substance of the party with whom you contract." In the same case, Cozens-Hardy LJ stated (at 676) that what is now s. 136 Law of Property Act 1925 did not make assignable any rights that were not assignable before: "[the section] does not enlarge the class of choses in action, the assignability of which was previously recognized either at law or in equity".

cont. It seems plausible, for example, that this was at least part of the reason for the refusal of the English courts of law to countenance assignment of rights. Marshall discusses this at length, and is rather sceptical. See Marshall, op. cit., pp. 36 et seq. 3z Wood, oP. cit., p. 33; Marshall, op. cit., pp. 45-65. Marshall identifies two further objections of medieval law, the need for livery of seisin and the feeling that a chose in action was felt to be too uncertain for a transfer of it to be allowed: ibid., pp. 66-67. The latter objection is still relevant when determining whether some rights are assignable, such as unliquidated damages for breach of contract or tort. 33 Maintenance is "intermeddling with litigation in which the intermeddler has no concern"; champerty "is a form of maintenance, and occurs when the person maintaining another takes as his reward a portion of the property in dispute" (Neville ro. London Express Newspapers Ltd [1919] AC 368, at 382, per Lord Finlay, whose speech contains various other definitions). See generally Percy H. Winfield, "Assignment of choses in action in relation to maintenance and champerty", LamQuarterly Review, vol. 35, 1919, p. 143. 34 See Holroyd v. Marshall (1861) 10 H.L. 191; Tailby v. (Official Receiver (1881) 13 AC 523 (allowing the grant of security over/assignment of future property) and s. 344 Insolvency Act 1986 (providing that a general assignment of rights by individuals is invalid on bankruptcy). See Wood, op. cit., p. 41.

3s England even allows transfers to catch debts which arise after insolvency: ibid., p. 42 citing Re Lind [1915] 2 Ch 345 and Re Irving, ex p Brett (1877) 7 Ch D 419. 36 There is no general word in English for the person who finds himself with a new counterparty, that is the person whose right or obligation is transferred. This person called herein "the transferred party".

3� The transferred party's knowledge can be very important in practice. Without knowledge he or she could pay the wrong person. Also, too formalistic a requirement for the giving of notice can open the door to fraud between the transferred party and the transferor, allowing the transferred party to pay the transferor in order to deprive the transferee of a benefit. Therefore the legal system needs to contain rules dealing with this situation.

cont. However, this is a different problem from that of whether the legal effectiveness of the substitution depends on the transferred party's knowledge or not. 3a For a history of the floating charge, and the significance of the ability to assign future property in its development, see Lord Millett's speech in Agnew v. Commissioner of Inland Revenue [2001] 3 WLR 454 at §5-13; WJ. Gough, Company Charges, Butterworths, 2nd edn, 1996, pp. 102-108 (history), 109 etseg. (characteristics); the leading cases of Holroyd v. MarsHal! (1862) 10 H.L. Cas 191 (sanctioning the assignment of future property in equity); Tailby v. Officiel Receiver (1888) (1862) 13 App Cas 523 (sanctioning the assignment of future book debts); In re Panama, Nem Zealand, and Australian Royal Mail Co (1870) 5 Ch App 318 (sanctioning the floating charge). The development was helped by the assignment by way of mortgage of the undertaking by statutory companies envisaged by the Companies Clauses Consolidation Act 1845. 39 See, for example, Ghestin, op. cit., pp. 6-8; Reinhard Zimmermann, The Law of Obligations: Roman Foundations of the Civilian TYadition, Juta, 1990, pp. 58-62. 4o It is clear that the idea that English law is all "home-grown" is a myth, and that civil law, and therefore Roman law, had some influence, through the universities (which taught civil law), the Chancery courts (which had churchmen, trained in canon law at their head for centuries), the Admiralty courts, and the lex mercatoria. The exact degree of influence, however, is very difficult if not impossible to calculate. Interestingly from a comparative point of view, this issue has resonances with the debate over the degree of outside influence in the rhari`a. 41 Zimmermann expresses it thus: "'Nomina ossibus inhaerent' said the medieval lawyers in their metaphorical way: the action arising from the obligation hinges on the bones and entrails of the creditor and can no more be separated from his person than the soul from the body" (op. cit., p. 58 (footnote omitted)).

4z This section owes a large debt to Treitel, op. cit., pp. 619 et seg. 43 Marshall, op. cit.; Bailey, "Assignment of debts in England from the twelfth to the twentieth century", Law Quarterly Review, vol. 47, 1931, p. 526; Bailey, "Assignment of debts in England from the twelfth to the twentieth century", Law Quarterly Review, vol. 48, 1932, p. 547.

44 Treitel, op. cit., p. 619. 45 See, for example, Tolhurst, op. cit., p. 555. This is not the case with the French law cession, which effects a true transfer of the right. See below, section entitled "Cession de criance ('Assignment of right')". 46 See Bailey, op. cit., 1931 and 1932. 4� The rockets had to travel by train on the US railway system; the railway tracks were built to the standard size laid down by nineteenth century UK railway engineers; that size was determined by the axle dimensions of English carts; those dimensions were determined by the width of Roman roads; the width of Roman roads was determined by the size of two horses yoked together. Occasionally, the historical vicissitudes lead to an absurd result, as in Performing Right Society v London Theatre of Varieties, Ltd [ 1924] AC 1, where the plaintiff's claim did not succeed because a legal chose of action was purported to be assigned by an equitable assignment (equitable because the requirements of the Copyright Act had not been complied with) and they did not join the owners of the copyright as parties to the action. This was described by Viscount Finlay (at p. 19) as a "mere technicality", but none the less decided the case. See K. Zweigert and H. Kotz, Introduction to Comparative Law, Clarendon Press, 3rd edn, pp. 452 et sea.

4g Holdsworth writes that, as a matter of practice, the common law abandoned its prohibition on assignment in the case of debts by permitting transfer using power of attorney (WS. Holdsworth, "The history of the treatment of choses in action by the common law", Harvard Law Review, vol. 33, 1920, p. 997, at p.1021). ). 49 Lord Finlay in Neville v. London Express Newspapers Ltd [1919] AC 368, at 382-383 quotes Blackstone's Commentaries (Book IV, c. 10, s. 12) on maintenance: "This is an offence against public justice, as it keeps alive strife and contention, and perverts the remedial process of the law into an engine of oppression." He goes on to cite Coke's Second Institute (212): "This maintenance (as hath been said) is malum in se, and against the common law, and that is notably proved by this Act (Westminster 1st c. 28) for hereby maintenance is branded with this quality that thereby common right is delaied, or disturbed, and consequently against the common law." Lord Finlay sums up by saying: The promotion of suits and defences by one who has nothing to do with them may undoubtedly lead to grave abuses and was regarded by the common law as against public policy. See also Holdsworth, op. cit., pp. 1006-1007. Maintenance and champerty are no longer crimes (s. 13 Criminal Law Act 1967) nor torts (s. 14), but may invalidate a contract (s. 14). 50 Frederick Pollock and Frederic Maitland, The History of English Law before the Time of Edward 1 Cambridge University Press, 2nd edn., 1923, vol. II, p. 226; Holdsworth, op. cit., p. 1003. 51 This consideration was not commonly mentioned. 52 Treitel, op. cit., p. 621 draws attention to the distinction between a right and a remedy. A right arises under a contract; a remedy is provided by law. Remedies are of various types, designed for various purposes. Examples include a "right" to rescind the contract for misrepresentation. Such remedies may not be transferable: ibid., p. 621, citing Investors' Compensation Scheme Ltd v. WestBromwich BC [ 1998] 1 WLR 896. Another distinction is that between a licence and a right: a licence allows rights, such as the right to own property, to exist (Al-Sanhuri, 'Abd al-Razzaq, Masadir al-baqq fs al-fiqh al-islami, Dar al- huna li al-tiba'a wa nasharat, 1954, p. 5).

53 As seen above, there was no inevitability about the categorization of intellectual property as choses in action. According to Marshall, intellectual property rights were not assimilated to corporeal hereditaments, as easements had been, but became choses in action because, when they arose in the eighteenth century, choses in action were assignable in equity. Marshall, op. cit., p. 21. On the very complex history of, and controversy concerning, this topic see ibid., Chapter 1 ("The nature of a chose in action"); Spencer Brodhurst, "Is copyright a chose in action?", Law Quarterly Review, vol. 11, 1894, p. 64; H.W Elphinstone, "What is a chose in action?", LamQuarterly Review, vol. 9, 1893, p. 311; Charles Sweet, "Choses in action", Law Quarterly Review, vol. 10, 1894, p. 303; Charles Sweet, "Choses in action", LamQuarterly Revietv, vol. 11, 1895, p. 238; T C. Williams, "Is a right of action in tort a chose in action?' Law Quarterly Review, vol. 10, 1894, p. 143. 54 [1902] 2 KB 427, 430. ss Holdsworth, op. cit., pp. 997-998, as cited in Marshall, op. cit., p. 33. 56 See Linden Gardtns Trust Ltd v. Lenesta Sludge Disposals, [ 1994j 1 AC 85; Don King 1'roduetions, Inc. ro. Warren (No. 1) [2000] Ch 291.

5� See Treitel, op. cit., p. 621 for a full list.

sa (1861) 10 HL 191. s9 (1888) 13 App Cas 523 (an assignment of future book debts had already been sanctioned by Bacon VC in Bloomer v Union Coal and Imn Company LR 16 Eq 383). These decisions paved the way for the sanctioning of the floating charge by the Court of Appeal in Chancery in In re Panama, New Zealand, and Australian Royal Mail Company LR 5 Ch App 318.

bo This does not prevent a very artificial distinction being made between the "sale" of debts for valuable consideration, structured in such a way as to produce exactly the same effect as a loan against the security of the debt, and the granting of a security interest over debts in return for a loan. sl 10 HL Cas 191. bz Treitel, op. cit., pp. 647-648. 63 Ibid., p. 620, citing Wilson v. Coupland (1821) 5 B and Aid 228; Hamilton v. Spottirmoode (1842) 4 Ex 200; Griffon v Weathirby (1868) LR 3 QB 753; Shamia vjoory [1958] 1 QB 448.

64 Delegation of the obligation is possible in certain circumstances: See Lightman J in Don King Productions Inc v. Warren (No. 1) [2000] Ch 291, 318: "In the case of contractual obligation where the obligation is such that the identity of the person who performs it is a matter of indifference to the contracting party for whose benefit the obligation is imposed (the obligee) (eg the payment of a sum of money or the delivery of a fungible), the other contracting party (the obligor) may delegate to a third party the performance of the obligation: see British Waggon Co v Lea �?' Co (1880) 5 QBD 149, [1874-1880] All ER Rep 135. But otherwise no such delegation is possible. Thus in the absence of a contractual provision to the contrary, in the case of a publishing contract, the author catinot delegate to someone the performance of the duty of writing the book and the publisher cannot delegate to someone else the performance of the duty of publishing it." bs [1893] 1 QB 256. Treitel, op. cit., p. 620.

67 It is not mentioned either in Wood, op. cit., or Treitel, op. cit. be See Linden Gardens Th<�Z,t<< v. Lenerta Sludge Disposals, [1994] 1 AC 85; [1993] 3 All ER 417; Don King Productions Inc v Warren (No.l) [2000] Ch 291. 69 See e.g. PH. Delvaux, "La mobilisation des creances a titre de garantie", in La transmission des obligations. Dies journtes d'études juridiques Jean Dabin, 1980, p. 517; Yves Chaput, "La transmission des obligations en droit bancaire fran5ais", in La transmission des obligations, in ibid., p. 371. For the history between Roman law and the Code civil, see Zimmermann, op. cit., pp. 62-67.

70 Art. 1690 Code civil. Wood, op. cit., p. 35. Chance is translated herein as "right", for three reasons: there is no precise translation, since "debt" can mean either criance (the right to receive money) or dette (the obligation to pay money); it is common practice for "criance" to be used in a more general sense than the right to receive money; and it is consistent with the terminology used in the metaphysical discussion above. 71 Art. 1692, for example, refers specifically to the "sale" of a right. See Ghestin, op. cit., pp. 17 et seq. for details of the rules. �i Delvaux, op. cit., p. 517, citing P. Hardel, Etude de la notion de dessaisirsement en matière de gage en droit franFair Sirey 1933. �3 Ghestin, op. cit., p. 7.

"Dans le transport d'une creances, d'un droit ou d'une action sur un tiers, la délivrance s'opère entre lc cédant et le cessionnaire par la remise du titre." This attitude later gave way to the "consensualist" interpretation of the Codt civil, in which the transfer of title is effected by the agreement of the parties, see Art. 1583 Code civil; Ghestin, op. cit., p. 22. �s Zweigert and Kotz, op. cit., p. 449, where the relevant cases are cited. There is a striking similarity between the rule on priority in English law (first to give notice acquires priority, the English rule being the rule in Dearlt v Hall: ibid., p. 450). (1828) 38 Eng Rep 475. The leading French case is Civ 29 Aug 1849, DP 1849 I 273. Ghestin, oP. cit., p. 18. �s Ibid., p. 19. Art. 1693 provides: "He who sells a criamcc or other incorporeal right must guarantee its existence at the time of the transfer, whatever else may be done without guarantee." ("Celui qui vend une cr6ance ou autre droit incorporel, doit en garantir

cont. 1'existence au temps du transport, quoiqu'il soit fait sans garantie.") It is possible to contract out of this guarantee, or to add to it, but in the latter case any amount guaranteed cannot exceed the amount paid for the right. This is to avoid the possibility of an unscrupulous assignee paying a small amount for low-quality rights, then enforcing the assignor's guarantee. �9 Art. 1 as amended. 10 Art. 1. 8� See Philippe Simler and Philippe Delebecque, Droit civil: ks saretés, la publicité foncière, 2nd edn, Dafloz, 1995, §551; and J. Mestre, E. Putman and M. Billiau, "Trait6 de Droit civil. Droit commun des suretes r6clIcs", LGDJ, §43-45 and §47; Delvaux, op. cit., p. 541 writes: "A lawyer trained in the categories of the Code civil cannot fail to be shocked in the first instance by the expression 'absolute assignment by way of security'. This is because a security is necessarily subordinate to a principal contract, whereas an absolute assignment can only result from a self-standing contract ..." Some commentators do view the Loi Dailly as having become the norm, but others vigorously deny this.

aZ Art. 2114, para. 1 Codc civil: "Lhypothe'que est un droit reel sur les immeubles affects a 1'acquittement d'une obligation." a3 "Le nantissement est un contrat par lequel un d6biteur remet une chose à son creancier pour s4ret6 de la dette." 84 "Pas de privilege sans texte." See the discussion in Mestre tt al., op. cit., §§237 and 238. Although it is clear that the principle applies to all other real securities, learned authors differ in their opinion of the seventy of the limitation concerning the construction of new types of security (Mestre et al. draw a distinction between "inventing" new types and "constructing" new types). Note Art. 2115 Codt civil, which provides that: "Hypothec only occurs in the cases and according to the forms authorised by statute." "rhypoth�que n'a lieu que dans les cas et suivant les formes autoris6s par la loi.") Also note Art. 2119 which specifically excludes movables from the hypothec. The existence of these articles might well have increased the reluctance to tamper with the nature of the hypothec, even by statute, for despite having no special formal higher status than other legislation, the Code civil has considerable authority.

as For an account of French security mechanisms, see Norton Rose, Norton Rose on Cross- Border Security, Butterworths, 2000, chapter on France; Foster, 1998, op. cit., p. 15 contains a brief list. 86 Delvaux, op. cit., p. 535. 87 See Ghestin, op. cit., pp. 59 et seq., who treats novation and delegation as one category. ea Ibid., pp. 7, 59.

s9 Ibid., p. 7, citing Raymond Salcillcs, "La cession de dettes", Annaler de droit Commercial, 1890, 1; E. Gaudemet, Etude sur le transport de dette A titre particulier, thesis, 1898. 9° Ghestin, op. cit., p. 45. 91 "La novation par la substitution d'un nouveau dibiteur peut s'op6rer sans Ie concours du premier d6biteur." 92 The monograph on the subject is Marc Billiau, "La delegation de cr6ance. Essai d'une th6orie g6n6rale de la delegation en droit des obligations", LGDJ, 1989. 93 Maxwell, De la délégation en droit roman, thesis Bordeaux, 1895: 107-108, quoted in Billiau, op. cit., p. 6. 94 Billiau, op. cit., p. 1.

95 Ibid., p. 5. 96 Ibid., p. 7. 97 Ibid., p. 19; see also Simler and Delebecque, op. cit., §254. 9s Some authors point out the similarity between the novatory délégation and the expromission, which are both novations by change of debtor, but others distinguish them because in the former it is the debtor who takes the initiative, whereas in the latter the third party substitutes himself or herself without the consent, and perhaps without the initial knowledge, of the primary debtor. See Billiau, op. cit., p. 19 and sources cited therein. 99 Simler and Delebecque, op. cit., §256.

100 Arts. 1249-1252 Code ciroil. See Zweigert and Kotz, op. cit., p. 451; Ghestin, op. cit., pp. 34 ct scq. (which contains an account of the history at p. 34); Jacques Mestre, "La subrogation personelle", LGDJ, 1979, pp. 5 7 et seq., 229 et seq.; Mestre et al., op. cit., §375. Subrogation pcrronnelle is divided into legal (ie statutory) and consensual subrogation, the latter being further divided into those initiated by the creditor and those initiated by the debtor. The mechanism outlined here is that type of consensual subrogation initiated by the creditor. Consensual subrogation initiated by the debtor requires a high degree of formality (notarial deeds) and is not often used. lol Ghestin, op. cit., p. 36, citing numerous cases in which it has been confirmed that Art. 1690 notice requirements do not apply to personal subrogation. 102 Ibad. p. 34. l03 "SubroBation, whether legal or consensual, invests the subrogated person with all the rights and actions of the subrogator": Req, 12 decembre 1898, DP, 1899, I, 345, cited by Ghestin, op. cit., p. 42. 1°4 There is also a third difference, in that the rule on the priority of the subrogator in the case of a partial payment is different.

105 Ghestin, op. cit., p. 42. 1°6 Ibid., pp. 66 et seq. Billiau, op. cit.

107 Frank Vogel and Samuel L. Hayes, Islamic Law and Finance: Religion, Risk and Return, Kluwer, 1998, p. 78. 108 The classification of real, physical things as property or non-property is of course also within the ambit of the law, but it would seem that doubts can more easily arise regarding "intangibles" than physical things, which would prima facie seem to be property unless there is a good reason to exclude them from the category. 1°9 See, for example, Muhammad Wohidul Islam, "Al-Mal: the Concept of Property in Islamic Legal Thought", Arab Law Quarterly, 1999, p. 361; Vogel and Hayes, op. cit., pp. 94-95; S.E. Rayner, The Theory of Contracts in Islamic Latv, Graham & Trotman, 1991, pp. 131-132. Art. 127Majalla provides: "Property consists of something desired by human nature and which can be put aside against time of necessity. It comprises movable and immovable property." Majalla (Majalat al-ahkdm al-'adliya, the Ottoman code based on the Hanafi school). Arabic text and commentary in Salim Rustam Baz, Sharh al- majaila, Al-Matba'a Al-'adabiyya, 3rd edn, 1923. English translation in C.A. Hooper, The Civil Law of Palestine and 1rRns-JordRn, Azriel Printing Works, 1933; serialized in vols 1-5 ArabLawQuarterly ([1985]-[1990]); C.R. Tyser, D.G. Demetriades and Ismail Haqqi Effendi, The Mejelle, being an English. translation of Majallahel Ahkam-i-Adliya and a complete code oflslamic civil law, Law Publishing Company, 1901, reprint 1967 (this translation contains an index and a glossary of technical terms). llo Art. 127 Majalla concerns mal mutaqawwim. 111 Discussions regarding the place of abstractions as mal often concentrate on the usufruct (manfa'a) but these are not decisive for our purposes, as the usufruct is quite different from a right to payment, being a type of real right with a very close link to the physical thing to which it relates.

112 Se'lim Jahel, "Ladequation du droit musulman classique aux precedes modernes de financement et de garantie", Revue trimestrielle de droit commercial et de droit Economique, vol. 38, 1985, p. 483, citing S. Mahmassani, Théorie générale des obligations et des contrats en droit islamiguc, Beirut, 1983, p. 597; Emile Tyan, "Cession de dette et cession de cr�ancc dans la theories et la pratique du droit musulman (d'après le madhab hanafite)", Annales da licokfranfaise de droit de Beyrouth, 1985, pp. 23-24; Sanhuri, op. cit., pp. 14-18 contains an extensive discussion of the correlation, if any, between Western concepts of real and personal rights on the one hand and shari'a ideas of dain and 'ain on the other. 113 Chafik Chehata, Théorie générale de l'obligation en droit musulman hanefite, Sirey, 1969, p. 97. t14 The concepts of right to payment and obligation to pay were expressed by distinguishing between owing a debt (akibi dain) and being owed a debt (lehu dain). 115 Vogel and Hayes, op. cit., p. 94. 116 Chehata, op. cit., p. 176. 117 Professor Vogel defines the dhimma as: "the faculty or capacity in an individual by which he accepts duty and obligation" (Vogel and Hayes, op. cit., p. 95). Professor Tyan calls it a "duty of conscience" (devoir de conscience) (Tyan, op. cit., p. 489). See Sanhuri, op. cit., pp. 15-20. One might call it the sum total of a person's responsibilities.

118 Vogel and Hayes, op cit., p. 172. 119 As regards gharar, there are echoes of Roman, English and French law here, in that one of the main issues discussed in all the legal systems is the question of certainty. For example, one of the principal arguments used by counsel in the leading English cases arguing against the sanction by the court of total transfers was that future rights could not be described with sufficient certainty to create a binding contract. izo The following account follows Professor Vo�el's in Vogel and Hayes, op. cit., pp. 114-117. lzl But it is as well to remember the uncertainties: Art. 158 Majalla gives a simplistic definition of a debt: "the thing which is proved to be owing". Four examples are given, including "A certain sum of money lent to A and owed by him", "A sum of money not immediately available" and "A definite sum of money now available." 122 "Gold and silver were means of payment, but were also traded like goods.... `Payment' was expressed by the word for 'weighing'." S.D. Goitein, AMcditerranean Society: The Jewish Communities of the Arab World as portrayed in the Documents of the Cairo Geniza, vol. I, Economic Foundations, University of California Press, 1967, p. 230. izz For more detail on ribawi commodities and the riba rules, see Vogel and Hayes, op. cit., pp. 74-76. 1z4 A hadith, or tradition, is an account of an incident or saying, usually of the Prophet, but which can also relate to one of his Companions. The body of hadith form the core of the sunna, the practice of the Prophet and his Companions, which supplements the primary source of the shari(a, Qur'an; the sunna is itself supplemented by other sources, such as ijma', the consensus of shari(a scholars.

tzs Ibn al-Hajjaj al-Nisaburi Muslim, SahihMuslim, with a commentary by Yahyn bin Sharaf al-Nawahl, edited by Abd Allah Ahmad Abu Zinah, Cairo, al-Sha'b Press, no date, quoted in Vogel and Hayes, op. cit., p. 73. tze Delay in delivery of one of the assets is acceptable. 127 Cited in Vogel and Hayes, op. cit., p. 68. Although the haditb itself is somewhat dubious, there is no doubt about the applicability of the rule, which is accepted by all Sunni scholars. 128 There are some exceptions to the rule prohibiting bai'al-dain. Vogel and Hayes, op. cit., p. 117 mention Mahki exceptions to sales for immediate delivery of the price for the right; Mufti Taqi Usmani, "On the permissibility of bai al-dain", International Journal of Islamic Financial Services, vol.1, 1999, available on taqi6.html (visited 7 June 2000), mentions similar Shafi'i exceptions, but even this does not accord with a story cited in the Muwatta: "Malik related to me from Musa ibn Maysara that he heard a man say to Sa'id ibn al-Musayyab, 'I am a man who sells for a debt.' Sa'id said, 'Do not sell except for what you take directly to your camel' (Al- Muwatta: §85)." He also mentions that some jurists make an exception to the rule where the right arises out of the sale of a commodity. However, the Islamic Fiqh Academy "has approved the prohibition of Bai'-al-dain unanimously" (ibid.), with no exceptions.

lz9 Nicholas Dylan Ray, "The medieval Islamic system of credit and banking: legal and historical considerations", Arab Law Quarterly, 1997, pp. 60-64 provides the most comprehensive account in English known to the author of the variations among the schools, as well as (at p. 65) an account of the hamala as "an instrument for efficiently dealing in credit". An even more detailed account is A. Chiron and M. Sadek Fahmy Bey, "Le transport de dette dans les 16gislations européennes et en droit musulman", L'Egypte contemporaine, vol. 22, 1931, p. 37 (European) and p. 137 (shari`a). See also Arts. 673-700, Majalla; AI-Bukhari (trans. Muhammad Muhsin Khan), The 1translation of the Meanings of Sahih Al-Bukbari, Kazi Publications, 6th edn, 1986, vol. III, §487; Al- Mawsu'ah Al-Fiqhiyya, Ministry of Awqaf and Islamic Affairs, Kuwait (Wizarat al-awqaf wa al-Shi'in al-Islamiyya), vol. 18, pp. 169 et seq.; Foster, 1998, op. cit., pp. 23-51; lahel, op. cit., p. 483; Ray, op. cit., pp. 43, 60-80; Tyan, op. cit., p. 23; Vogel and Hayes, op. cit., p. 108. Among the books offiqh, see for example, Averroes (1126-1198), Bidayat al-mujtahid wa-nihayat al-muqtasid, Cairo, 1935, vol. 2, pp. 294-296; Averroes (Imran Ahsan Khan Nyazee, trans; reviewed by Muhammad Abdul Rauf), The Distinguished Jurist's Primer: A 1ranslation of Bidayat al-Mujtahid, Garnet, 1994, pp. 360-362; AI-Jaziri, 'Abd al- Rahman; Kitab al-fiqh `ala al-madhahib al-arba'a Matba'at al-istiqama, 1969-1972, vol. III, pp. 251 et seq.; Ibn Qudama al-Maqdisi, Abd Allah ibn Ahmad, Al-Mughni, Dar al- fikr, 1984, vol. IV, pp. 390 et seq.; Al-Dardir, Ahmad ibn Muhammad, Al-Sharh al-saghir, Dar al-Ma'rif, 1972, vol. III, pp. 423 ctseq.; AI-Mawardi, Ali ibn Muhammad; Al-Hawi al- kabir, Dar al-fikr, 1994, vol. VIII, pp. 90 et seg.; AI-Nawawi, Mahiudin Abu Zakaria Yahya Ibn Sharif (E.C. Howard trans. from 1882 French edition of L.WC. Van Den Berg), Minhaj Et Talibin: A Mareual ofMuhammadan Lam according to the School of Shafii, Law Publishing Company, 1914, pp. 174 et seq. Book IV Majalla deals with hawala. On substitution of debtors as an equivalent mechanism to guarantees in other systems, see J. Gilissen, "Esquisse d'une histoire universelle des suretes personnelles. Essai de synthèse g�n6rale', in Soditijean Bodin, 1969-1974, vol. I, p. 6, at pp. 36-37. Some examples of documentary hamalat are translated in Goitein, op. cit., pp. 241-242. 13o See e.g. Noel J. Coulson, Commercial Law in the Gulf States: The Islamic Legal Tradition, Graham & Trotman, 1984, p. 18.

tat See, for example, David Santillana, Istituzioni di dititto musulmano malichita: con riguardo anche al sistema sciafiita, Istituto per l'Oriente, 1938, vol. II, 1938, pp. 200-201 and sources cited therein. i3z Averroes, 1994, our. cit., p. 360. 133 Emphasis added. See also Art. 674 Majalla, which provides: "The transferor is the debtor who makes the transfer." Art. 680 Majalla, entitled "The fundamental basis of a transfer of debt" provides that hamala is: "concluded by the transferor informing his creditor that he has transferred his debt to some other person, and by the agreement thereto of the creditor and such other person" (emphasis added). Art. 673 defines the hamala as a transfer of a debt "from the dhimma of the debtor to another dhimma" (author's literal translation). Art. 724 Iranian Civil Code is in much the same terms. Al-Mawsu'ah Al- Fiqhiyya, op. cit., vol. 18, p. 169 states: "the transferor [al-muhil] is the debtor". Chehata sums up the situation thus: "We need first to examine transfer from the active point of view, then from the passive point of view. It will be seen that the rules are diametrically opposed. Obligations are not actively transferable inter vivos, they are transferable mortis causa. On the other hand, they are passively transferable inter vivos, non-transferable mortis causa (Chehata, op. cit., p. 97)." Lane's Lexicon gives the first meaning of the root as: "It (a thing) became altered, transmuted, or changed." Professor Coulson translated the verb as "to turn over" (Coulson, op. cit., 29-30). The word hamala is also used to describe a type of financial instrument, which is presumably derived from the simple bamala. Lane's Lexicon's third definition refers to this type of hawala as: "an order for the payment of a debt, or of a sum of money, given by one person, upon another, to a third person".

134 Emphasis added. Dietrich compounds the error by stating that the word means "literally `draft', 'bill"'. t3s The different accounts given in the original edition and new editions of the Encyclopaedia of Islam referred to above are good examples of this phenomenon also. '36 See the text in the Explanatory Memorandum on Art. 1106, specifically referring to Art. 673 Majalla, t3� The relevant hadith are to be found in Al-Bukhari, op. cit., pp. 269-271. 1. t3s According to Professor Ballantyne, only the Hanafi sources contain this distinction, but it is essential to understanding the mechanism. For more details, see Jahel, op. cit., pp. 491-493. The basic principle was that the hawala discharged the debtor. This rule could be displaced by contrary agreement.

139 This was acknowledged by the jurists. See, for example, Jahel, op. cit., p. 495; Al-Shirazi, Abu Ishaq al-Shirazi, Kitab et-Tanbih: ou le livre de l'admonition touchant la loi musulmane relon le rite de l'Imam Ech-Chafe'i (a]-Tanbib fi al-fiqh aI-shafi'i) (trans. G.-H. Bousquet), La maison des livres, 1949, vol. II, 1949, §135.

t4o See ibid. §135i. He asserts that the type, method of demand and due date must be the same. Santillana viewed the hamala as two mechanisms: a mandate to pay and a delegation (Santillana, op. cit., pp. 351-352). Cf. England, where the courts of law did allow assignment where the assignor owed money to the assignee (Holdsworth, op. cit., p. 1020). 141 This situation has apparently misled even the most eminent authorities, or perhaps forced them into misleadingly brief accounts. See, for example, Coulson, op. cit., pp. 29-30, where he describes hawala as a kind of assignment of a right which "has a very much narrower and more restricted scope" than common law assignment. The jurists (including those who drafted theMajalla) can be less than helpful in this regard. One instance of this is the example given after Art. 681, where one scenario is a transfer of a right, the other a transfer of an obligation. t42 If a hawala were to be invalid, all was not necessarily lost. The circumstances might be interpreted as a contract of wakala. Coulson, op. cit., pp. 29-30. 143 On the kafala generally, see N.H.D. Foster, "The Islamic law of guarantees", Arab Law Quarterly, 2001, p. 18. The kafala could also be used as a hawala, see below, section entitled "The ka, fsla (guarantee) as a transfer mechanism". There is some evidence that the hawala was even preferred to the kafala, since it seemed (although this was controversial) that the transferred obligation remained in existence even if the initial debtor was discharged, whereas the opposite was true of the kafala (Art. 662 provides: the "release of the principal debtor from liability brings about the release of the guarantor" and that defences available to the principal/initial debtor were not available to the transferee debtor). See Jahel, op. cit., pp. 491-493. Formally speaking, the hawala was distinguished from the kafala by being a transfer of the obligation, rather than the assumption of a new obligation, linked to the original obligation (Al-Mawsu'ah Al-Fiqhiyya, op. cit., vol. 18, p. 170). 144 it was possible to have a hamala mutlaga where the initial debtor was freed almost entirely from his liability, the only exception being where the transferee debtor became

cont. insolvent, in which case liability would be re-transferred. Muhammad Hamidullah, "Le problem des origines des sûretés personnelles dans I'Islam", in Society Jean Bodin pour ilhistoirc comparative des institutions, Les stlretés personelles, Recueils de la Society Jean Bodin, vols. 28-30, Librairie Encyclopedia, 1969-1974, vol. I, p. 327, at pp. 341-342. 145 See e.g. Arts. 680-683 Majalla. "6 Ray, op. cit., p. 61. 147 Ibid., p. 62. taa Section entitled "The Limited and the Absolute Hawala". 149 Shafi'i and Hanbali law are similar to Maliki law, but in Hanbali law hawala is the Hanafi hamala mugayyada, and Hanafi hamala mutlaga is regarded as wakala, with the transferee being viewed as the agent of the creditor, lending the transferor money on behalf of the creditor. In all three schools, the consent of the transferee is not required (Ray, op. cit., pp. 63-65). 150 Not all the jurists allowed this: see Santillana, op. cit., p. 488.

151 see Jahel.of. cit., pp. 491-493 for an account of the more complex classical, non-Majalla position. 152 Ibid., p. 494; Art. 662Majalla. is3 On hiyal see, for example, Robert Brunschvig, "Fiction legate dans I'lslam mEdiEval", Stxdia Islamica, 1971, p. 32, at p. 41. ls4 Vogel and Hayes, op. cl p. 107. 155 Tyan, �, cit., pp. 25-26. Cf. Art. 715(2) Egyptian Civil Code, which makes an agency irrevocable where it is granted for the sole benefit of the agent. 156 Tyan, �, cit., p. 26.

157Lane's Lexicon (Edward William Lane, An Arabic-English Lexicon, London, Williams and Norgate, 1865) gives the meaning of musta'ar as "borrowed; or asked, demanded, or sought, as a loan"; it can also be used for "a word or phrase used metaphorically". 158 Tyan, op. cit., p. 26, citing Art. 1590 Majalla. 159 Ibid., p. 27. 160 Ibid. 161 Ibid., pp. 31-37. 162 Art. 257 seems to be even clearer, but the commentators do not admit a literal interpretation, and only allowed its application in cases of bawala muqayyada.

163 See generally Ray, op. cit., pp. 60-65. 164 Ibid. , p. 64. lbs WL Fischel, "The origins of banking in Medieval Islam", Journal of the Royal Asiatic Society, 1933, p. 339, at p. 574. Fischel traces the history of financial experts and bankers in the medieval Arab world. See also A.L. Udovitch, "Reflections on the institutions of credit and banking in the medieval Islamic Near East", Studia Islamica, vol. 41, 1975, p. 5, at pp. 14-16, who concludes that the profession of banker did not exist as such, but that merchants also acted as bankers. 1� The references to "letters of credit" by some commentators is presumably not meant to imply that these instruments were letters of credit in the modern sense of documents against which payment was made on presentation of certain sale, title and insurance documents. �6� Such studies include Ronald C. Jennings, "Loans and credit in Ottoman records", Journal of the Economic and Social History of the Orient, 1973, p. 184; A.L. Udovitch, "Credit as a means of investment in medieval Islamic trade", Journal of the American Oriental Society, 1967, p. 260; S.D. Goitein, Letters of Medieval Jewish Traders, trans. from the Arabic with introductions and notes by S. D. Goitein, Princeton University Press, 1967, pp. 197-200,

cont. 229-266. Professor Goitein concluded that: "Business was normally conducted on credit" (ibid. p. 197). More generally, Jennings writes (Jennings, op. cit., p. 168): "Because of the absence or inaccessibility of judicial and business archives, loans and credit in the history of Muslim peoples have been studied through religious law and commentary (sbari'a andfikh). Although such tomes may be good sources for legal and religious theory, or even for intellectual history, they often are far removed from the real business and commercial practices of the socio-economic order". For an example of documentary evidence of the practice, see Goitein, 1973, op. cit., pp. 295-299 (a banker's account for his customer). lba Udovitch, 1967, ap. cit., p. 260. 169 See also, for example, Abu Ishaq al-Shirazi, Al Tarebih fi al-ftqh al-sbafii, Dar al-Kutub al- ilmiya, 1995, p. 157, which refers to an "established debt" (dain mustaqirr). 170 But see Vogel and Hayes, op cit., pp.172-174, on mixed assets of businesses, referring to Decision 5 (14/08/88), fourth session (1988) of the OIC (Organization of the Islamic Conference) Academy, Fiqh Academy Jaurnal 3, pp. 2161, 2163.

171 Art. 108. ' l�z Art. 109. In Whelan and Hall, op. cit., the term is translated as "property right", but "real right" corresponds to French terminology and to the terminology used in this article. ��3 Art. 111. In Whelan and Hall, op. cit. the translation includes a note in brackets equating moral rights to choses in action, but this is somewhat misleading, since moral rights are equivalent only to certain types of chose in action, not rights to payment. 174 The Explanatory Memorandum is of no assistance here, as no comment is provided to this section. 175 Art. 126(a). A further complication is that the primary meaning of 'aqar is land, although a more general meaning is possible (see the entry in Lane's Lexicon).

��6 The expression used in both articles is al-nidham al-�am. 1�� Art. 199 specifically decrees that: "Every contract must have a subject matter to which it attaches." " 178 Art. 200(1). ). 179 Section entitled "Mal, 'ain, dain, dhimma, and the sbatia approach", p. 53; Islam, op. cit., pp. 362-364, V '� -' iao Art. 200(2). lal According to Art. 130Majalla: "Cash [al-nugud, the same word as the word rendered as "money" in the translation of Art. 95] consists of gold and silver coins,"

iaz Arts. 377-390 Kuwaiti Civil Code contains the hawala provisions, Arts. 364-376 those permitting transfers of right. Art. 303 Egyptian Civil Code refers to transfers of rights, Art. 315 to transfers of debts. ls3 See section entitled "Riba, gharar and bai' al-dain". laf Recall also that Art. 129(b) requires that the subject matter of the contract must be "defined". ias Section entitled "Total transfers in the UAE". ieb The Explanatory Memorandum specifically confirms this in the explanatory text to the beginning of the hamala section.

187 Sanhuri, op. cit., pp. 21 etseq. 188 Author's literal translation. la9 There are echoes here of the s. 136 Law of Property Act 1925 requirement that an assignment must be "absolute". Is a hamala granted by way of security "completed"? Presumably this would be "appropriate" and "customary". 190 See the discussion below on the effect of these provisions on the possibility of transfers of future rights to payment. 191 Art. 1109 and Art. 1130(2). 192 This is an adaptation of the translation in Whelan and Hall, op. cit., which contains an error. The original translation reads: "A Ltd assignment is one the execution of which is restricted to a (particular) debt owned by the transferor to the responsibility of the transferee or (liability in respect of) particular property in his possession by way of trust or guarantee." 193 Art. 1113(e).

194 Art. 1113(f). 195 Arts. 648 and 649 Majalla. 196 As seen above, Art. 95 does include rights in its definition of mal. 197 Jahel, o�. cit., p. 498.

198 Art. 1494. 199 Art. 1491. zoo Art. 1492(2). 201 Art. 1492(1).

zoz See, for example, Arts. 478-483, Commercial Code. zoa Art. 203(2). For a general discussion on contracts involving future property, see Foster, 1998, op. cit., pp. 25-27.

zo4 It is the practice therefore, for all of the rights under a contract to be transferred, rather than just the amounts due pursuant to the contract (advice given by Clifford Chance, Dubai, September 2001). zos One can think of solutions to this difficulty in certain contexts, such as providing a consent to transfer in standard conditions of sale. z°6 See Rayner, op. cit., pp. 24-25 and works there cited.

zo� Emphasis added. 208 Emphasis added. �09 The situs of "intangible property" is a matter of much debate, particularly as regards securities the "existence" of which is now solely determined by electronic records.

210 A parallel could be drawn with what happened in Ra's Al-Khaima Asphalt Company and The Bank of Oman 1'. Lloyds Bank Ltd and Others, Ra's Al-Khaima Civil Court, Suit No. 397/78, in which a UAE court applied shari'a principles to the situation of the holder in due course of bills of exchange. But a later (1989) case in Abu Dhabi went the other way (Rayner, op. cit., 166-167). Similar considerations arise in France regarding the possible enforcement of English floating charges, see Frédérique Dahan, "La Floating Charge: Reconnaissance en France d'une surety anglaise", Journal du droit international, vol. 123, 1996, p. 381 and Art. 2128 Code civil which provides that: "Contracts entered into in a foreign country may not create a hypothec on property in France, in the absence of dispositions contrary to this principle in political laws or in treaties." ("Les contrats passes en pays 6trangcr ne peuvent donner d'hypothèque sur les biens en France, s'il n'y a des dispositions contraires à ce principe dans les lois politiques ou dans les trait6s.") 211 The comparative analysis herein uses the considerations suggested above (section entitled "Assessing transfer systems"). ziz See, for example, Vivian Grosswald Curran, "Cultural immersion, difference and categories in US comparative law", American Journal of Comparative Law, vol. 46, 1998, p. 43.

z�3 Goode describes English commercial law as "a collocation of ill-assorted statutes bedded down on an amorphous mass of constantly shifting case law" (Goode, op. cit., p. 1205). z14 On the general principles, or "philosophy" of English commercial law, see ibid. zis Section entitled "Particular mechanisms". zlb The structure of the French security over movable regime and the structure of the French company law regime are also disorganised.

217 Ghestin, ap. cit., p. 79. zis 10 HL Cas 191, 13 App Cas 523. zl9 For an example of the influence of the legal profession in such matters, see N.H.D. Foster, "Transmigration and transferability of commercial law in a globalised world", forthcoming.

220 See e.g. G. Teubner, "Legal irritants: good faith in British law or how unifying law ends up in new divergences', MLR, vol. 61, 1998. p. 11; 1998; Foster, forthcoming, op. cit. The degree to which the culture of a group affects the law depends on the degree of influence which that group has on the law reform process.

221 The subject of the influence (or lack of it) on the shari'a is a controversial and difficult one. Some consider that most of the shan'a was borrowed. One author considers it: "totally unthinkable that the construction of the edifice elaborated, as described by Shaibani, could have been achieved in such a short time, about a hundred and fifty years, from the coming of Islam until the time Shaibani was active.... One is obliged to admit that Muslim law is in reality the crystallization of a customary law, notably that which regulated the valley of the Tigris and the Euphrates" (Yaakov Meron, "Points de contact des droits juif et musulman", Studia Islamica, 1984, p.60, at p. 84). Others view the shari`a as almost entirely, if not completely, formed by the fuqaha' on the basis of the Quran and the Sunna. See, for example, J. Schacht, "Foreign elements in ancient Islamic law', Journal of Comparative Legislation and International Law, Series III, vol. 32, 1950, p. 3; Muhammad Hamidullah, "Influence of Roman law on Muslim law", Journal of the HyderabadAcademy, Studies No. 6, 1943?, reprinted as a pamphlet; S.V Fitzgerald, "The alleged debt of Islamic to Roman law", LamQuarterly Rtview, 195 1, p. 67, at p. 81 (a particularly scathing attack, in which he denies the very existence of Roman law in most of the territories conquered by the Arabs); Gideon Libson, "Sefer Ha'arevuth ('Book of Surety') of Rav Shmuel Ben Hofni Gaon and its relationship to Islamic law", Studia Islamic, vo. 73, 1991, p. 5. See Patricia Crone, Roman,1'rovincial and Islamic lam: the Origins of the Islamic Patronate Cambridge University Press, 1987, pp. 2-3; Ray, op. cit., for a discussion on commercial law, and Foster, 1999, op. cit., pp. 81-86 for possible evidence in the law of guarantees. zzz Exceptions include the work of Udovitch and Pryor in the area of the commenda. See, for example, A.L. Udovitch, "At the origins of the Western Commenda: Islam, Israel, Byzantium?", Speculum, vol. 37, 1962, p.198; John H. Pryor, "The origins of the Commenda contract", Speculum, vol. 52, 1977, p. 5. For a bibliography of the history of European commercial law, see R. S. Lopez and Irving W Raymond, Medieval Trade in the Mediterranean World, Columbia University Press, 1955, pp. 156-157. zza See Leon E. Trakman, The Law Merchant: the Evolution of Commercial Law, Fred B Rothman & Co: Chapter 1 ("The medieval law merchant") and Chapter 2 ("The modern lex mercatoria"). the letters from the Cairo Geniza translated in Goitein, 1973, op. cit., pp. 39-42 are most evocative of the trade between Italy and Egypt. Two letters of a similar type are to be found in Lopez and Raymond, op. cit., pp. 384-387. Norman A. Stillman, "The eleventh century merchant house of Ibn Awkal", Journal of the Economic and Social Hiswry of the Orient, 1973, p. 15 is a detailed study of one such merchant. For the general background to the trading environment, see Lopez and Raymond, op. cit., especially pp. 23-29.

zzs Simler and Delebecque, op, cit., §255. 226 On the Roman law see Henry John Roby, Roman Priroate Lam in the times of Cicero and the Antonines, Cambridge University Press, 1902, vol. II, pp. 42-45. zz� Another explanation is that the bill of exchange was used to change currencies, but this may be a popular etymology, invented when the real reason was forgotten. Modern Arabic uses the Italian cambiale. More linguistic evidence comes from the related area of real security, in which the shari`a security device of mukhatara was well known and used in Western Europe under the name of mohatra, a word which might have been the origin of the word mortgage (the "h" would have disappeared in French pronunciation, and the meaningless collection of consonants could have assimilated to a known French word, "mort" which shared the same consonants, in the same way as "Eleanor Infanta of Castile" became "Elephant and Castle"). 228 Ray, �, cit., 1997.

zz9 An example of this is Usmani, op. cit. 230 professor Tyan's work discussed above seems to indicate a quite wide gulf between the contents of the books and reality; Professor Udovitch's work indicates the opposite (Udovitch, 1967, op. cit.; Udovitch, 1970, op. cit.), as does Jennings, op. cit. There is no reason why both should not be correct, and that the disparity was great in hawala and small in partnership. z3t See above, section entitled "The Commercial Code". These in turn are subject to share'a principles. zaz Section entitled "Total transfers in the UAE".

z33 As Zimmermann puts it: "each society in which commerce plays a role sooner or later has to face a strong demand to increase the circulation of credit" (Zimmermann, op. cit., p. 59).

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