The Rise of Distinct “Common Law” Financial Zones in Islamic Countries

This article investigates four instances of the transplantation of English commercial law (broadly defined) into a different legal environment. The financial centers in Dubai (UAE), Abu Dhabi (UAE), Doha (Qatar) and Astana (Kazakhstan) have adopted a legal regime based on English Common Law, despite their national civil law and Islamic traditions. This choice on the face of it seeks to create an attractive business environment through optimal protection of market participants’ rights. This research appraises comprehensively, through a comparative perspective, the unique institutional and regulatory model adopted and practiced by the four zones: the Dubai International Financial Center (DIFC), Abu Dhabi Global Market (ADGM), Qatar Financial Center (QFC), and Astana International Financial Center (AIFC). There are three dimensions of comparison: (1) comparing the centers’ rules and regulations with their UK counterparts to reveal the degree of legal transplantation; (2) comparing the centers’ rules and regulations with their domestic counterparts to explore a potential regulatory gap between the two systems; and (3) comparing the four different regimes to reveal their potentially different experiences. Through a rigorous comparative examination of the experiences of the four zones, this research provides fresh perspectives to the need for robust law in economic and financial development, in particular through legal transplantation to achieve such purpose. The four zones have provided an excellent natural experiment for these enduring theoretical debates.