U.S. legal win could help Islamic finance counter sharia concerns
A U.S. court decision to dismiss a case alleging that AIG’s (AIG.N) sharia-compliant businesses promoted religious doctrine looks likely to boost confidence in the industry and lift sales of Islamic products in the longer term.
A Michigan district court rejected on Friday a claim filed by U.S. Marine veteran Kevin Murray in 2009 that the U.S. government violated the constitution by allowing funds from insurer American International Group’s $40 billion bailout to be used to fund its Islamic insurance businesses.
(Photo: A logo of Malaysia’s Bank Islam in Putrajaya September 3, 2008/Bazuki Muhammad)
Lawyers say the case is significant for the industry in the United States, which has struggled with a backlash against Islam, and is looking for support from the courts and government to promote Islamic finance as a legitimate business.
Islamic finance has been plagued by criticism in the U.S. that it is a means of funneling funds to terrorists or a plot by Muslims to spread a system of Islamic principles known as sharia has plagued the industry in the U.S.
“The case helps the industry by putting the fringe element that is fearful of sharia in its place,” said Isam Salah, partner at King & Spalding in New York. “But I expect we’ll see more of these kinds of cases as we see a multi-pronged effort to combat all things Islamic in the U.S.”