Globalization and National Law: The Regulation of Bankruptcy as an Example – Ideas for Developing the Legal Regulation of Bankruptcy Based on Islamic Law

Abstract

Globalization has involved globalizing law through extending some western legal regimes, particularly from American law, to developing countries. Remaking bankruptcy law on a new policy is one example. Although bankruptcy law needed reform, it seems that appropriate reforms to cope with contemporary economic crises and changes are believed to be better achieved through importing foreign legal regimes. Thus, globalization promotes a particular legal system. For example, the new bankruptcy laws of Jordan and Saudi Arabia adopted in 2018 have been drawn on the American bankruptcy law. This article seeks to disprove that belief by demonstrating that Islamic fqh regulates many matters that defne modern bankruptcy laws, such as treating traders and non-traders alike and protecting debtors acting in good faith. This article suggests a number of ‘fqh propositions’ for developing new solutions based on fqh, such as introducing criteria for fnancial hardship and solvency for the purpose of suspending claims against enterprises whose operation serves public interest, the applicability of the theory of abuse of the right in this domain, and the possibility of extending Zakat funds to moral entities for whose debts individual members are liable, like general partnerships. Demonstrating that bankruptcy law can be developed based on fqh may well encourage legal education to pay more attention to the study of fqh as a basis for developing national laws and their contribution to solving common problems across societies, and globalization will then be a collaborative product of cultures and legal systems rather than imposing one legal system