scholarly journals Court referral and Nigeria's Financial Regulation Advisory Council of Experts (FRACE)

2019 ◽  
Vol 11 (2) ◽  
pp. 206-225
Author(s):  
Zakariya Mustapha ◽  
Sherin Kunhibava ◽  
Aishath Muneeza
Keyword(s):  
Dispute Resolution ◽  
Financial Regulation ◽  
Common Law ◽  
Advisory Council ◽  
Islamic Finance ◽  
Content Type ◽  
Finance Industry ◽  
Legal Risks ◽  
Civil Courts

Purpose This paper aims to highlight resolution of Islamic finance dispute by common law-oriented courts in Nigeria with respect to Sharīʿah non-compliance and legal risks thereof, as well as the lesson to learn from Malaysia in that regard. This is with view to ensuring Sharīʿah compliance and legal safety of Islamic finance practice as prerequisites for sustainability of the Nigerian Islamic finance industry. Design/methodology/approach A qualitative method was used; interviews were conducted with different categories of experts and primary data collected in relation to Sharīʿah non-compliance and legal risks in adjudicating Islamic finance dispute by civil courts and the role of expert advice as basis for court referral to Financial Regulation Advisory Council of Experts. A doctrinal approach was adopted to analyse relevant legislative provisions and content analysis of secondary data relevant to applicable provisions in matters of finance before civil courts. Findings The paper discovers an indispensable role of conventional financial regulations in sustaining Islamic finance industry. Appropriate laws for Islamic finance under the conventional framework foster legal safety and Sharīʿah compliance of Islamic finance activities in related cases handled by courts. Nigeria civil courts can aid sustainability of Islamic finance when so equipped and enabled by laws that address apparent Sharīʿah non-compliance and legal risks in judicial dispute resolution. Inadequate legal provisions for dispute resolution breeds Sharīʿah non-compliance and legal risks in Islamic finance, undermine its prospects and stand inimical to its sustainability. Research limitations/implications This research is limited by its focus on Sharīʿah non-compliance and legal risks alone, which emanate mainly from judicial resolution of Islamic finance dispute by Nigerian civil courts. Practical implications This research seeks to motivate a determined and deliberate regulatory action and change in approach towards addressing apparent risks associated with Islamic finance while resolving disputes therein by civil courts. It has implications on common law jurisdictions generally that adopt similar approach as Nigeria's while introducing Islamic finance into their conventional finance framework. Originality/value Dispute resolution and other regulatory functions of civil courts are important to Islamic finance though apparently overlooked while introducing Islamic finance in Nigeria as in other emerging jurisdictions. This research ascertains the role of the civil courts as indispensable for Islamic Financial Institution (IFIs) operations and demonstrates that such courts are needed for the development and sustainability of Islamic finance industry. The research demonstrates the end-to-end requirement of Sharīʿah compliance of Islamic financial transactions as absolute and needs be ensured and guarded at dispute resolution level by properly equipped courts.

scholarly journals A JUDICIAL PERSPECTIVE ON ISLAMIC FINANCE LITIGATION IN MALAYSIA

1970 ◽  
Vol 21 (2) ◽  
Author(s):  
Tun Arifin Bin Zakaria
Keyword(s):  
Dispute Resolution ◽  
Financial Services ◽  
Legal Framework ◽  
Islamic Finance ◽  
Finance Industry ◽  
International Recognition ◽  
The Future ◽  
Competitive Products ◽  
Civil Courts

In the last four decades, Malaysian jurists and Sharî’ah scholars have immensely contributed to the field of Islamic finance sufficient to attract international recognition and acceptance. This has turned Malaysia to a vibrant global hub for Islamic financial services. In furtherance of this enviable position, a new legal framework was recently introduced which is expected to reemphasize the pragmatic and resilient nature of the Islamic finance industry. This paper therefore provides a judicial perspective on the recent reforms in the legal framework of Islamic finance industry, examines the dynamics of Islamic finance litigation, and highlights the important role of the judiciary and other dispute resolution institutions in shaping the future of the industry. In Malaysia, the nature of the trading concepts, upon which the Islamic finance facilities are based, are the major sources of disputes since the Islamic finance industry operates within a conventional framework and related disputes are litigated in the civil courts. It is therefore argued that the biggest challenge for the courts in the exercise of its judicial function is the application of relevant laws to Islamic finance transactions. The paper concludes that strengthening the legal architecture of the industrywill necessarily lead to the development of competitive products that are not only Sharî’ah-compliant but alsoconventionally viable. This can be achieved through the channelling of Islamic finance disputes to an alternative forum for appropriate dispute resolution. ABSTRAKDalam empat dekad yang lalu, cendekiawan Malaysia dan pakar Syariah telah memberi sumbangan yang besar kepada bidang kewangan Islam yang cukup bagi menarik pengiktirafan dan penerimaan antarabangsa. Ini telah menjadikan Malaysia suatu hab global bertenaga untuk perkhidmatan kewangan Islam. Bagi meneruskan kedudukan yang dicemburui ini, satu rangka kerja undang-undang baru telah diperkenalkan baru-baru ini yang diharap lebih menekankan kepada lumrah pragmatik dan berdaya tahan industri kewangan Islam. Oleh itu, kertas kerja ini memberikan perspektif kehakiman terhadap pembaharuan mutakhir dalam rangka kerja undang undang industri kewangan Islam, mengkaji dinamik litigasi kewangan Islam, dan menjelaskan peranan penting badan kehakiman dan institusi-institusi penyelesaian pertikaian yang lain dalam membentuk masa depan industri ini. Di Malaysia, lumrah konsep perdagangan, yang mana menjadi dasar kemudahan kewangan Islam, adalah punca utama pertikaian sejak industri kewangan Islam beroperasi di dalam rangka kerja konvensional dan pertikaian berkaitan telah dilitigasikan di mahkamah sivil. Maka ia telah dibahaskan bahawa cabaran terbesar bagi mahkamah pada menjalankan fungsi kehakimannya adalah aplikasi undang-undang yang berkaitan dengan urus niaga kewangan Islam. Kertas kerja ini menyimpulkan bahawa pengukuhan rangka kerja undang-undang industri akan membawa kepada pembangunan produk yang berdaya saing yang bukan sahaja patuh Syariah tetapi juga berdaya maju dari sudut konvensionalnya. Ini boleh dicapai melalui penyaluran pertikaian kewangan Islam kepada forum alternatif untuk penyelesaian pertikaian yang sesuai.

Judicial Challenges Facing the Islamic Finance Industry of Nigeria

2021 ◽  
Vol 29 (2) ◽  
pp. 244-262
Author(s):  
Zakariya Mustapha ◽  
Sherin Kunhibava ◽  
Aishath Muneeza
Keyword(s):  
Dispute Resolution ◽  
Judicial System ◽  
Islamic Finance ◽  
Curricular Reform ◽  
Legislative Reform ◽  
Finance Industry ◽  
Financial Regulations ◽  
Contractual Agreements ◽  
Civil Courts ◽  
Fundamental Requirement

A fundamental requirement of Islamic financial practice, Shariah-compliance covers all aspects of the transaction from contractual agreements to execution to dispute resolution. Thus a sound judicial system with in-built Shariah-compliance mechanisms is indispensable to facilitate the execution of such contracts and to ensure the sustainability of the practice. In Nigeria, this system is still under development with the judiciary the most readily available option for dispute resolution. However, comprised merely of civil courts with jurisdiction to hear Islamic finance cases, these mechanisms subject the industry to possible legal and Shariah-compliance risks. Having conducted a series of interviews with experts, this study recommends: constitutional and legislative reform to grant jurisdiction to existing civil courts; the Financial Regulations Advisory Committee of Experts (FRACE) should be statutorily entitled to offer binding advice to courts; the practice itself should be enshrined in appropriate legislation; and there should be curricular reform to ensure judges and lawyers are adequately trained/educated in the particulars of Islamic finance.

Dispute Resolution in the Islamic Finance Industry

2020 ◽  
pp. 804-833
Author(s):  
Camille Paldi
Keyword(s):  
Dispute Resolution ◽  
Common Law ◽  
Legal Framework ◽  
Islamic Finance ◽  
Finance Industry ◽  
The Common ◽  
Law Courts

A unique and independent legal framework is important to effectively adjudicate Islamic finance disputes, Sukuk bankruptcies, and Takaful disputes. Currently, these disputes are being adjudicated in common law courts or ineffective arbitration centres where often the Islamic finance transaction is inadvertently converted into a conventional transaction due to the common law nature of the dispute adjudication. In this chapter, a framework is proposed for Islamic finance dispute resolution in the form of the Dubai World Islamic Finance Arbitration Centre (DWIFAC), DWIFAC Jurisprudence Office, the Sukuk Bankruptcy Tribunal (SBT) and the Takaful Tribunal (TT).

Towards a global hub

2016 ◽  
Vol 58 (1) ◽  
pp. 48-72 ◽  
Author(s):  
Umar A. Oseni ◽  
Abu Umar Faruq Ahmad
Keyword(s):  
Dispute Resolution ◽  
Legal Framework ◽  
Institutional Framework ◽  
Islamic Finance ◽  
Legal Analysis ◽  
Content Type ◽  
Finance Industry ◽  
Recent Developments ◽  
Islamic Financial Institutions ◽  
Resolution Processes

Purpose – The paper aims to examine significant developments in the institutional framework for dispute resolution in the Islamic finance industry in Malaysia. Malaysia, as part of its efforts to consolidate its enviable Islamic finance industry, has strengthened its institutional framework for dispute resolution. Design/methodology/approach – Data for this study were collected from both primary and secondary legal sources. Through a conceptual legal analysis, the institutional frameworks of dispute resolution in the Malaysia’s Islamic finance industry are studied. Findings – The study finds that Malaysia is far ahead of other jurisdictions by a significant margin in spearheading reforms in the emerging global Islamic finance industry. The dispute resolution framework has been largely affected by the recent reforms. Research limitations/implications – Other jurisdictions may borrow a leaf from Malaysia’s initiative in providing a robust legal framework for dispute management in the Islamic finance industry. Practical implications – Apart from adopting Malaysia’s framework and possibly adapting it to suit their specific local variations, other jurisdictions may also encourage Islamic financial institutions to incorporate effective dispute resolution processes in Islamic finance contracts. Originality value – This study critically discussed most recent developments in the institutional framework on dispute resolution in the Islamic finance industry in Malaysia.

The role of maqasid al-Shariʿah in applying fiqh muamalat into modern Islamic banking in Malaysia

2020 ◽  
Vol 11 (9) ◽  
pp. 2137-2154
Author(s):  
Muhammad Shahrul Ifwat Ishak ◽  
Fathullah Asni
Keyword(s):  
Empirical Studies ◽  
Well Being ◽  
Advisory Council ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Content Type ◽  
Floating Rate ◽  
The Impact ◽  
Banking Operations

Purpose This paper aims to explore the practical role of maqasid al-Shari’ah in applying fiqh muamalat to the reality of modern banking practices. As the modern financial environment is complicated and not too conducive for Islamic banking operations, a special approach based on maqasid al-Shari’ah is needed to harmonize between revelation and reality. Design/methodology/approach The data of this study are obtained through literature and empirical data. As for the empirical, the exploratory qualitative approach is applied in which three members of the Shari’ah Advisory Council (SAC) of Bank Negara Malaysia (BNM) as well as three Shari’ah committees (SC) of Islamic Finance Institutions are selected as interviewees. As a result, several themes are defined from the interview data before they are analyzed based on the concept of maqasid al-Shari’ah. Findings The findings reveal that several practices are prevalent in developing Islamic banking products, including replicating conventional products to be Islamic ones, imposing wa’ad (unilateral promise) to strengthen the combination of different contracts into one product, and adopting floating rate with ibra’ (rebate) for financing price, which are needed to sustain this industry in modern financial system. In this regard, maqasid al-Shari’ah is applied to reconcile between rulings in fiqh muamalat and banking environments, so that these rulings can be adopted pragmatically without compromising Shari’ah principles. Research limitations/implications This study has its limitations, as it focuses on the extent of the role of the maqasid al-Shari’ah in Islamic banking operations, excluding other segments of Islamic finance such as Islamic capital markets and Islamic insurance. Moreover, as data are collected from only six interviewees from SAC and SC of Malaysia, the results cannot be represented for the whole Islamic banking practices of this country. Practical implications This study provides several policy recommendations regarding the practice of the maqasid al-Shari’ah in Islamic banking. These may be useful for all Islamic finance players, including regulators and bankers in introducing policies and products in this area. Social implications This study has the potential to enhance the confidence of the Muslim community, particularly in Islamic banking to support its existence and practices. The impact of such optimism will lead to an increase in demand for Islamic banking products, hence encouraging Islamic banking to sustain and update its activities in line with maqasid al-Shari’ah. Originality/value This paper offers a practical approach as regards to how the maqasid al-Shari’ah can play a significant role in sustaining the Islamic banking industry, particularly in circumstances that are not favorable to its progress. It is indispensable to prevent the Islamic rulings from being diverted in the name of human well-being and to avoid basing them on a literal textual approach. Moreover, as it provides empirical studies on the issue of replication, wa’ad, floating rate and ibra’, the discussion on this subject becomes more practical.

scholarly journals ARBITRATION AS A MECHANISM TO RESOLVE ISLAMIC BANKING DISPUTES IN MALAYSIA: CHALLENGES AND DRAWBACKS

2019 ◽  
Vol 10 ◽  
pp. 19-44
Author(s):  
Mohamad Fateh Labanieh ◽  
Mohammad Azam Hussain ◽  
Nazli Mahdzir
Keyword(s):  
Dispute Resolution ◽  
Research Methods ◽  
Legal Framework ◽  
Advisory Council ◽  
Islamic Banking ◽  
Court System ◽  
Legal Research ◽  
Finance Industry ◽  
Tremendous Progress

Malaysia has shown tremendous progress in the arena of Islamic banking and the finance industry, and has become an essential Islamic financial hub within the region. The comprehensive legal framework consisting of legislation and dispute resolution mechanisms have been crucial elements that ensured the robust development of the industry. The court system and arbitration are two significant platforms for the settlement of Islamic banking disputes that are brought before them. However, the court system has been widely favoured compared to the arbitration, even though both approaches have almost identical roles. Therefore, one question arises; why is arbitration less preferred compared to the court system? By using legal research methods, this article seeks to analyse the challenges and drawbacks that faces the current arbitration framework when dealing with Islamic banking disputes. This study suggests that the Malaysian arbitration framework faces several challenges such as, issues regarding high-cost, high-formality, less-speed, and the uncertainties when referring any Shariah matters to the Shariah Advisory Council. This article suggests that some improvements should be made by the relevant authorities and establish the necessary statutory amendments to strengthen the role of arbitration in Malaysia as a complementary forum to the court system in settling Islamic financial disputes.

Building trust in Islamic finance products and services

2017 ◽  
Vol 12 (3) ◽  
pp. 356-372 ◽  
Author(s):  
Syed Nazim Ali
Keyword(s):  
Financial Services ◽  
Islamic Finance ◽  
Illustrative Case ◽  
Content Type ◽  
Finance Industry ◽  
The Past ◽  
Building Trust ◽  
Central Tenet ◽  
Stake Holder ◽  
Perceived Impact

Purpose With the increasing instances of malfeasance and frauds coming to light in the financial services industry, trust has become a key concern for customers. Fortunately, in the case of Islamic Finance, trust is a central tenet, and its importance can be seen through the emphasis of Amanah or trustworthiness that should be present in every financial transaction. However, it has been argued that the principle of trust has not been truly realized in Islamic Finance, or that there are still issues of distrust regarding anything which is obtrusively branded as “Islamic”. In this paper, the author will analyze the reasons for gaps between the expectations and reality of the finance industry today by looking at the main factors contributing to distrust among the different stakeholders and the perceived impact of the distrust on the industry and the general public. It then focuses on the past and ongoing efforts by academia to bridge these gaps between the different stake holder groups with the help of illustrative case studies as well as recommends future steps to be taken to ensure a stronger foundation of trust within the Islamic Finance community.

scholarly journals Evaluation of The Role and Position of Dispute Resolution Councils In Iran's Criminal Policy In Comparison with Similar Institutions In The French Judiciary

2021 ◽  
Vol 9 (2) ◽  
pp. 237-258
Author(s):  
Hassan Vahedi ◽  
Abdolvahid Zahedi ◽  
Firooz Mahmoudi Janaki
Keyword(s):  
Criminal Justice ◽  
Dispute Resolution ◽  
Common Law ◽  
Criminal Policy ◽  
Criminal Justice Policy ◽  
Public Institution ◽  
Effective Measure ◽  
The People ◽  
The Common

The Dispute Resolution Council was established as a public institution in the last few decades to reduce the number of cases sent to the judiciary in Iran and strengthen public participation and increase the role of the people in criminal justice policy. Although the activities of this institution in recent years have led to a decrease in the number of cases sent to judicial institutions, but its public aspect was not fulfilled as intended. In addition, the law of this council has many contradictions with the constitution with limitations and problems in the legal and structural field that have affected its functions. However, the role of the people is significant in similar institutions in the legal system of the Common Law and France, while strengthening the participatory aspect. This issue has been an effective measure in strengthening participatory criminal policy in these countries. The purpose of this research was to investigate the criminal policy of the Dispute Resolution Council and similar institutions in France.Keywords: Dispute Resolution Council, French Law, Iranian Criminal Justice Policy Evaluasi Peran dan Kedudukan Dewan Penyelesaian Sengketa Dalam Kebijakan Pidana Iran Dibandingkan dengan Institusi Serupa di Peradilan Prancis AbstrakDewan Penyelesaian Sengketa didirikan sebagai lembaga publik dalam beberapa dekade terakhir untuk mengurangi jumlah kasus yang dikirim ke peradilan di Iran dan memperkuat partisipasi publik dan meningkatkan peran masyarakat dalam kebijakan peradilan pidana. Meskipun kegiatan lembaga ini dalam beberapa tahun terakhir telah menyebabkan penurunan jumlah kasus yang dikirim ke lembaga peradilan, tetapi aspek publiknya tidak terpenuhi sebagaimana dimaksud. Selain itu, undang-undang dewan ini memiliki banyak kontradiksi dengan konstitusi dengan keterbatasan dan masalah di bidang hukum dan struktural yang mempengaruhi fungsinya. Namun, peran masyarakat cukup signifikan dalam lembaga sejenis dalam sistem hukum Common Law dan Perancis, sekaligus memperkuat aspek partisipatif. Isu ini telah menjadi langkah yang efektif dalam memperkuat kebijakan kriminal partisipatif di negara-negara tersebut. Tujuan dari penelitian ini adalah untuk mengetahui kebijakan kriminal dari Dispute Resolution Council dan lembaga sejenis di Perancis.Kata Kunci: Dewan Penyelesaian Sengketa, Hukum Prancis, Kebijakan Peradilan Pidana Iran Оценка роли и позиции советов по решению спорных вопросов В уголовной политике ирана по сравнению с аналогичными учреждениями во французской судебной системе  АннотацияСовет по решению спорных вопросов был создан как государственное учреждение в последние десятилетия для сокращения количества дел, передаваемых в судебные органы в Иране, и расширения участия общественности и повышения роли общественности в политике уголовного правосудия. Хотя деятельность этого учреждения в последние годы привела к уменьшению количества дел, направляемых в судебные органы, общественный аспект не выполняется должным образом. Кроме того, закон этого совета имеет много противоречий с конституцией с ограничениями и проблемами в правовой и структурной областях, которые влияют на его функционирование. Тем не менее, роль сообщества весьма значительна в аналогичных учреждениях в системе общего права и правовой системы Франции, а также в усилении аспекта участия. Этот вопрос стал эффективным шагом в укреплении совместной уголовной политики в этих странах. Целью данного исследования является определение уголовной политики Совета по разрешению спорных вопросов и аналогичных учреждений во Франции.Ключевые Слова: Совет по решению спорных вопросов, Французское право, политика в области уголовного правосудия в Иране 

scholarly journals ??? ???? ??????? ??????? ?? ??????? ??????? ??? ??????? ????????? ?? ????????? ??????? ?? ??????: ????? ????? ?????? ?????

2016 ◽  
Vol 1 (2) ◽  
pp. 215
Author(s):  
Hatta Syamsuddin ◽  
Abdul Khaliq Hasan ◽  
Moh Muinudinillah
Keyword(s):  
Supervisory Board ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Finance Industry ◽  
Islamic Jurisprudence ◽  
Banking Business ◽  
Rules And Principles ◽  
Muslim Communities ◽  
Financial Transactions

The emergence of Islamic banking was considered as a response to the desire of Muslim communities to disassociate from usury (riba-based) system. The development of time increasing the diversity of financial transactions, both in trading and banking business, which has no provisions in the old sources of Islamic jurisprudence. This dangerous phenomenon was the reason for the importance of a Sharia Supervisory Board to ensure all of the banking transactions comply with the rules and principles of sharia. This research focused on the role of National Sharia Board and his methodology in the fatwa. This research uses analytical descriptive methodology. The limitations of this research were about: how the National Sharia Board played their roles in Indonesia and how the method applied by the National Sharia Board in issuing a fatwa. The research found that: the National Sharia Board in Indonesia has played their roles, especially in developing Islamic finance industry, ensuring financial and banking transaction comply with the rules and principles of sharia, and providing awareness and guidance to the Muslim communities. The issuing of fatwa on financial transactions was the authority of the National Sharia Board. The National Sharia Board hold on procedures, specific steps, and certain agreed methodology in issuing the fatwa. Nevertheless, there still some fatwas that caused controversy in the Islamic community

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