Islamic finance contracts typically provide that the laws of England and Wales will govern agreements performed in the UK. However, on cross-border transactions, particularly transactions involving finance parties from major Western economies, the governing law clause may also be English law. A number of factors have given rise to this:

1. •

   most of the parties to such contracts reside in the UK (in the case of UK-based transactions), and understand the legal regimes of such jurisdictions

2. •

   Islamic financial institutions (IFIs), which are often banks or other financial institutions, and other institutions insist on this choice of law

3. •

   disputes regarding these agreements will likely, as a matter of convenience, be heard by an English court, and these courts function best when interpreting their own law, and

4. •

   no superior alternative to such bodies of law currently seems available

Some Islamic finance commentators have criticised the use of English law and courts on the grounds that they lack the capacity to correctly interpret Islamic finance agreements. While this may be the