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.

Dispute resolution in the Islamic banking industry of Tanzania: learning from other jurisdictions

2016 ◽  
Vol 9 (1) ◽  
pp. 125-142 ◽  
Author(s):  
Abdul-Nasser H.R. Hikmany ◽  
Umar A. Oseni
Keyword(s):  
Dispute Resolution ◽  
Dispute Settlement ◽  
Banking Industry ◽  
Banking System ◽  
Legal Framework ◽  
Policy Framework ◽  
Islamic Banking ◽  
Court System ◽  
Content Type ◽  
Good Policy

Purpose This paper aims to examine the prospects of a dispute resolution framework for the Islamic banking industry in Tanzania under the existing legal framework. Design/methodology/approach This paper is based on comparative study by drawing significant lessons from other jurisdictions, and argues that to avoid some of the initial drawbacks in the dispute resolution framework for Islamic banking transactions in more advanced jurisdictions like Malaysia and United Kingdom, it is important for Tanzania to get it right from the onset to effectively manage Islamic banking disputes. Findings The study finds that apart from the court system which provides the main avenue for Islamic finance litigation, other processes such as arbitration and mediation which are deemed to be more sustainable could also be developed for effective dispute management. Research limitations/implications The study focuses on Tanzania banking system with comparison to other jurisdictions. Practical implications An increase of Sharī’ah-compliant products in Tanzania has led to the establishment of a number of Islamic banks. This study demonstrates the need for Tanzania to make use and/or make adjustment of its laws for effective dispute settlement of banking-related disputes. Originality/value This study appears to be the first paper to draw significant experiences from other jurisdictions to resolve Islamic banking disputes in Tanzania. It is expected to provide a good policy framework for the stakeholders in the Islamic banking industry in Tanzania.

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.

scholarly journals The Significance of Central Bank of Malaysia Act to Islamic Banking

2019 ◽  
Vol 6 (4) ◽  
pp. 158-180
Author(s):  
Aishath Muneeza
Keyword(s):  
Central Bank ◽  
Case Law ◽  
Legal Framework ◽  
Legal Issues ◽  
Advisory Council ◽  
Islamic Banking ◽  
Legal Research ◽  
Or Practice ◽  
To Come

Malaysia is considered as the cranium of Islamic banking. The purpose of this paper is to find out the significance of Central Bank of Malaysia Act (CBMA) to Islamic banking by analysing the relevant provisions of CBMA and the reported case law in Malaysia in this regard. This is a legal research where the provisions of this Act relevant to Islamic banking is reviewed and assessed in the light of reported case law. It is found that there is a need for the legislature to come up with the specific directions or practice notes in which Shariah issues of the case could be differentiated from factual issues/legal issues. It is hoped that the outcome of this paper will assist those jurisdictions aspiring to have a sophisticated legal framework for Islamic banking to comprehend the significance of having statutory provisions to establish the apex Shariah Advisory Council at the Central Bank level.

scholarly journals Dispute Resolution for Islamic Banks in Indonesia

2021 ◽  
Vol 4 (SI) ◽  
Author(s):  
Atharyanshah Puneri
Keyword(s):  
Dispute Resolution ◽  
Alternative Dispute Resolution ◽  
Legal Framework ◽  
Islamic Banking ◽  
Islamic Banks ◽  
Banking And Finance ◽  
Finance Industry ◽  
Positive Law ◽  
Islamic Financial Institutions ◽  
Dispute Resolution Mechanism

The rapid growth of Islamic banking and finance industry demanded an improvement in term of standards, frameworks, policy, technologies, resources, and guidelines in order to go beyond without compromising the core values of Islam itself. In the context of legal framework of Islamic banking and finance, it is most likely this industry needs to be highly regulated in order to avoid manipulation and abuse by the irresponsible parties. One of the crucial issue in the area of Islamic Banks in Indonesia is regarding about the dispute resolution mechanism for Islamic Banks. Based on Indonesian positive law, there are two alternative dispute resolution mechanisms that can be exercised by parties to settle disputes in cases involving Islamic Financial Institutions (IFIs) namely through litigation or non-litigation. Litigation comes under the jurisdiction of the Religious Court. Researcher in this study are look deeper into the dispute resolution mechanism for Islamic Banks in Indonesia, as well as going through some decided cases. And based on the study done, it was found that alternative dispute resolution mechanism is more effective to resolve Islamic Banks dispute rather than litigation. In the future, researchers may conduct more research to examine deeper about the dispute resolution mechanism for the whole Islamic Economics and Finance in Indonesia. Moreover, researchers need to look at the regulators' and legislators’ perception towards dispute resolution and legal environment.

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.

Execution of Security Rights in Islamic Banking at The Religious Court of Purbalingga

2016 ◽  
Vol 1 ◽  
pp. 287-297
Author(s):  
Nita Triana
Keyword(s):  
Field Research ◽  
Economic Security ◽  
Islamic Banking ◽  
Actual Situation ◽  
Legal Research ◽  
Security Interest ◽  
Final Verdict ◽  
Islamic Economic ◽  
Religious Courts

This article examines the execution of a security interest in Islamic banking in the Islamic economic disputes in  the  Purbalingga  Religious  Court. The case of non-performing loans in the world of Islamic banking is often the case, this was due to the debtor defaults. Mortgages used as collateral can be executed based on the decision of the Religious Court. The method used in this research is a kind of field research with the approach of Socio Legal Research, including in the realm of non-doctrinal study. The results show the execution of a security interest in dispute sharia economy in Purbalingga Religious Court has been run in accordance with the mandate of the Act: On the substance of the Implementation of the decision of execution is the end of a case that is the result of what is required by the plaintiff are determined in a court of Religion with using the guidelines do not separate from the disciplinary proceedings contained in HIR or Rbg. On the  Structure  of  Purbalingga Religious Court  carry out executions by institutions that are available from the start to the filing of the petition to the Chairman of the Religious Courts, judges who will examine the final verdict, Executor who will call and will execute and when the auction Clerk role of the mentor  State Property Office and Auction (KPKNL). Culturally law. Purbalingga Religious Court  carry out the execution-based approaches to religion and culture. This approach proved to facilitate execution. Obstacles that faced in general, form, creditors often receive a guaranteed land and buildings where the land certificate is no longer appropriate to the actual situation, the Debtor is not willing to leave the place right dependents, barriers to the sale of objects auction execution which does not go unsold objects auction / auction. Constraints that normally occurs in the execution of this economic security rights dispute, can be resolved by various reinforcement structures / institutions and culture through the law chosen by the Purbalingga Religious Courts.

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

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).

How Much “Law” in Legal Studies? Approaches to Teaching Legal Research and Doctrinal Analysis in a Legal Studies Program

2014 ◽  
Vol 29 (03) ◽  
pp. 297-310 ◽  
Author(s):  
Vincent Kazmierski
Keyword(s):  
Research Methods ◽  
Legal Education ◽  
Multiple Roles ◽  
Methods Course ◽  
Law Schools ◽  
Legal Research ◽  
Pedagogical Strategies ◽  
Legal Studies ◽  
Professional Law

Abstract This article addresses the teaching of legal research methods and doctrinal analysis within a legal studies program. I argue that learning about legal research and doctrinal analysis is an important element of legal education outside professional law schools. I start by considering the ongoing debate concerning the role of legal education both inside and outside professional law schools. I then describe the way in which the research methods courses offered by the Department of Law and Legal Studies at Carleton University attempt to reconcile the tension between “law” and legal studies. In particular, I focus on how the second-year research methods course introduces students to “traditional” legal research and doctrinal analysis within a legal studies context by deploying a number of pedagogical strategies. In so doing, the course provides students with an important foundation that allows them to embrace the multiple roles of legal education outside professional law schools.

scholarly journals The Role of Musharakah in the Economic Development of Tehsil Dargai, District Malakand, Khyber Pakhtunkhwa, Pakistan

2019 ◽  
Vol 6 ◽  
pp. 80-97
Author(s):  
Suhail Ahmad ◽  
Ejaz Aslam ◽  
Prof. Dr. S. Ghiasul Haq ◽  
Prof. Dr. Mohd Ma'Sum Billah
Keyword(s):  
Response Rate ◽  
Islamic Finance ◽  
Islamic Banking ◽  
Limited Data ◽  
Khyber Pakhtunkhwa ◽  
Banking And Finance ◽  
Finance Industry ◽  
Muslim Countries ◽  
Job Opportunities

Islamic finance industry has been growing for the last twenty years, both in Muslim and non-Muslim countries around the world. There are different modes of Islamic finance which provide job opportunities across the globe. In Pakistan, the contemporaneous growth of Islamic banking and finance is not different from other countries. Islamic banking and finance does not only provide employment for individuals, indeed it also offers various products and services to customers across the country. Musharakah is a form of business in Islamic finance that is being adopted rapidly by most of the customers in Islamic banking and finance institutions. Therefore, the purpose of this study is to examine the role of Islamic finance, mainly how Musharakah is playing its due role in creating employment and maintaining sustainable development projects which in turn are causes of the development of the economy, particularly of Tehsil Dargai. For this purpose, this study collected data through a questionnaire that was randomly distributed among 100 respondents in Tehsil Dargai, District Malakand, Khyber Pakhtunkhwa (KP), Pakistan and the response rate was 60%. We found that Islamic finance is rapidly growing in Dargai; indeed, people are practicing different modes of Islamic finance and Musharakah is the most popular form of Islamic finance in this area. This study utilizes limited data because it was only conducted in Dargai.

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