Arafat’s Millions: A Great Choice of Law Problem

News reports suggest that Yasser Arafat retains sole control of a large number of Swiss bank accounts, and that his extreme ill health is setting off a struggle to control them. I will leave it to others to opine on the geo-political implications of Arafat's death, and of the political consequences flowing from control of the money.

Instead, in the spirit of professional deformation, I want to speculate about the somewhat hypothetical legal issues of inheritance, keeping in mind that all I know about the subject I learned for the bar exam and then mostly forgot right away.

First, did Arafat leave a will? On this, we have basically no reliable information: Who will get Arafat's millions? / Wife is fighting Palestinian officials for assets, Arab TV reports states that:

According to Al-Jazeera, Arafat had written a will leaving at least some of his fortune to his wife and their 9-year-old daughter Zahwa, but other reports said Arafat has no will, leaving most of his fortune in the hands of Rashid.

I suspect that if in fact Arafat has no will, the question is not nearly that simple if only because to know the disposition of the estate we have to decide what law applies. Here we have a non-Israeli Arab, living in the occupied territories, dying in France, with assets in Switzerland. The courts in the place where the money is will usually have to decide disposition of a disputed asset, but they will frequently look to the law that applies to the estate. Ordinarily, in most countries, the law of the domicile of the decedent will apply, but I have no idea what testamentary law applies in the occupied territories: Is it Israeli law (which would look to Muslim, Quranic law for Muslim decedents)? Is it British Mandate law (which oftentimes incorporated Ottoman leftovers including Quranic elements)? Or have the territories somehow adopted their own rules, in which case one must ask whether the Swiss would recognize them?

If some form of Quranic law applies, then I'm not sure that things look so good for Rashid, especially if there is no will. According to this summary by the International Tax Planning Association,

In Israel, Islamic law is applied to some degree to Muslim citizens¹ in Islamic courts. …

The core Islamic rules of succession, however, are essentially similar in all Muslim countries. A Muslim does not have testamentary freedom: at least 2/3 of his estate must pass in accordance with the rules. The Sunni and Shia rules have some differences (the Shia Muslim may bequeath property to an heir, a Sunni Muslim may not), but the Sunni Hanafi rules apply to a majority of Muslims – including those in Israel. …

Daughters are the main beneficiaries. The wife (or husband) takes a share, as do children, parents and siblings, but no share is given to a son or full brother. Minor children (generally under 15) require a guardian, normally male.

…A will may be valid as regards 1/3 of the estate, and it cannot contain a bequest to a person who inherits under the law – though this rule has been modified in some countries where the Shia view is applied.

There is of course a further wrinkle: if there really are millions upon millions in the Swiss accounts it's easily arguable that much of the funds were held in constructive trust for Fatah, the PLO, or the Palestinian Authority — although deciding which one of these gets how much could be tough. Common law countries are comfortable with the idea of constructive trusts, and my understanding is that concepts with the same effect exist in civil law countries. But whether and how robustly they exist in Islamic law, I simply don't know.

(There's also the issue of what happens if Arafat takes the knowledge of the existence of some of the accounts to his grave without being able to tell anyone. Under Swiss law does the bank have any duty to seek out heirs? They will presumably hear when he's dead, but if the account is fully anonymous they may not (officially) connect the pile of money with Arafat. Does it just sit there? Escheat?)

¹ I understand that Arafat is not an Israeli citizen under Israeli law (indeed, he may not even be a legal resident of the territories under Israeli law for all I know). I quote this text as probative of the content of Quranic law, which I gather is more or less the same whether applied through its reception into Israeli family law or by other means.