Investors in Western securities have been given plenty to fret about recently as markets have seized up, money flows have frozen, and confidence has evaporated. But at least they haven't had to tangle with God as well.

Not so in the land of Islam, where the world's fastest-growing debt market has hit the skids in part because leading Islamic scholars began to question whether some popular Islamic bonds, or sukuks, followed religious law.

The fact that such questions exist point to a peculiar risk in Islamic markets that—because leverage is generally eschewed and securities are closely tied to assets—have been viewed as more resilient than their Western counterparts.

The questions also come at a time when that resilience is showing its limits; the Middle East is now grappling with the contagious global credit crunch and worries over its own overheated asset market. And the debate among Islamic scholars is sure to complicate those woes.

"The irony is that current market conditions are the result of deficiencies with [the] backbone of the conventional finance industry," says Rahail Ali, head of Islamic Finance at the Dubai office of Lovells, an English law firm.

Ali added that the debate among Shariah scholars has gained prominence because the sukuk market is now "open to a much wider investor base, some of which isn't familiar with the fact that differences of opinion among the Shariah scholars are very much to be expected."

Those investors got their first taste of "religious interpretation risk" last November when Sheik Muhammad Taqi Usmani said he believed that as much as 85 percent of Islamic bonds already in the market had a critical religious flaw baked into them: They guaranteed a buyer that principal would be paid back, even in the case of default.

Conventional bonds routinely carry such provisions but they are problematic for Muslims who are, among other things, barred from accepting interest, or engaging in any business where profit and risk are not equally shared.

To work around some of the simplest issues, Islamic bonds are supposed to derive their payment stream from the revenue thrown off by a real asset or some similar structure, while any repurchase is seen as just a return on a lease, and should be done at market rates.

But in an attempt to securitize a wider array of assets, or to make more appealing structures, many Islamic bonds have veered too close to a Western interpretation of what a bond should be.