Legal Environment of Global Markets

Legal Systems in International Markets Common Law Code Law Islamic Law Socialist Law

Islamic Law and Business Islam is not just religion but source of law, arbiter of social behavior, and guide for politics. Prophet Mohammed transmitted literally the word of god in the Koran: fundamental, immutable source of Islamic doctrine. The words of Mohammed and his life are recorded in the Hadith. Muslims see Islam as continuation of Judeo-Christian tradition. There was always one religion and one god. God sent from time to time prophets: Moses, David, Jesus, and Muhammad. Muhammad is last prophets since all things are now revealed. Mohammed did not leave a male offspring and did not give instructions for his succession ( The Shiite believe he chose Mohammed Ali). His closest companions chose Abu Bakr as Caliph. Mohammed Ali, Mohammed’s son in law was not selected, so he created Shiism. Sharia (path to the source of life) is the code of law based on religious principles regulating commercial, social and political life. In Saudi Arabia, sharia is the only code of law, in Egypt’s constitution sharia is the basis for legislation, in Turkey sharia is excluded from state’s legal and administrative affairs.

Legal Dispute Situations Between Governments Between Companies and Governments Between Companies

Determination of Legal Jurisdiction There is no Supranational System of Laws for Disputes among Companies. Disputes have to be Settled under National Law. Jurisdiction is determined by: - Jurisdictional Clauses Included In Contract - Domicile - ‘purposeful availment’ of doing business in particular country. Ex: shipping goods, signing contract etc.

International Dispute Resolution - Conciliation or Mediation  Not Legally Binding  No Disclosure of Information - Arbitration  Arbitration Centers  Arbitration Clauses  Enforcement of Arbitration - Litigation  Costly  Time Consuming