Settlement of Disputes and the Islamic Financial Institutions (IFIs) (original) (raw)

Sustainability of Islamic Finance Industry : Arbitration as Forum for Dispute Resolution

2011

IslamicJinance industry is one of the fastestgrowing components of theglobal Jinance. The sustainable growth of the IslamicJinance industry cannot be achieved without a comprehensive legal andjudicialJlamework. An eficient legalji-amework for IslamicJinance in any jurisdiction would requires three basic elements namely enabling laws and regulations, enforceability of Islamic Jinancial contract and appropriate dispute resolution mechanism. The objective of this paper is to discuss the possibility of lslamic finance industry moving towards alternative dispute resolution mechanism in particular the arbitration as forum for disputes settlement. This is due to the growing concern among industry players and public consumers that dispute resolutions by way of reference to the civil court will result in less than satisfactory decisions in terms of Shariah compliance.

Reformulation of Mediation in Dispute Settlement on Islamic Banking

Humanities & Social Sciences Reviews

Purpose of the study: The general objective of this study was to explore the potential of the mediation process as a reformulation of Islamic banking dispute settlement after the Supreme Court Regulation (SCR) on mediation procedure in the court. On the one hand, this study tries to find a repositioning of mediation procedures in resolving disputes over Islamic Banking in religious courts. Methodology: This research was normative and empirical. The data collection techniques of this literature would be done utilizing literature study and field research. Primary data was obtained through field research with interviews. The participants from Judges of Religious Court, Abdul Manan as a Judge of in the Supreme Court Institution, Islamic banking legal unit. Data were processed by a qualitative descriptive analysis technique. Secondary data used consisted of primary legal material sourced from SCR No. 1 of 2016 and the contract. Principal Findings: The mediation process as a reformulation...

ARBITRATION AND MEDIATION METHOD APPLIED TO ISLAMIC FINANCE CONFLICTS IN MALAYSIA

Malaysia has already known as an Islamic country. In a country of multi-ethnicity, multi-religion and multi-cultural societies, demands a concept of justice and equality that is different from other countries, particularly the ones with homogenous societies. The highest law of the land places Islam, the religion associated with one of the main ethnicity, as the official religion of the nation and allowed the duality of economic system, in particular banking system, whereby conventional banking system exists side-by-side with the Sharia-compliant, Islamic banking. By reviewing the pertinent literature on the development of Islamic banking, the reviewed cases on Islamic banking and its contributions to Malaysian society regardless of ethnicity and religion. The discussion in this paper therefore will be directed towards highlighting the laws and mechanisms of solution on Islamic banking and its implication to enhance the application of Islamic banking laws to consumers regardless of ethnicity and religion, in order to maintaining fairness and justice in a multi-ethnic society

COMPARISON OF MALAYSIA-DUBAI APPROACH FOR THE ISLAMIC DISPUTE RESOLUTION SYSTEM IN ISLAMIC FINANCE (Perbandinagan Pendekatan Malaysia-Dubai dalam Sistem Penyelesaian Semula Pertikaian bagi Kewangan Islam)

2017

This paper aims to discuss the development of the dispute resolution system for Islamic finance by a cross-national perspective in the Islamic world. The mainstays of the Islamic financial market, nowadays, are the Gulf countries and Southeast Asia. In particular, the United Arab Emirates (UAE) and Malaysia are countries that have developed the industry since its inception. Therefore, this paper will focus on these two countries as case studies. As the market grew, disputes in the Islamic finance industry also increased and raised the question of how the jurisdiction for this new industry could be separated from that of conventional finance. There are discussions on how Islamic finance dispute cases should be dealt with. Malaysia has been working on these issues by focusing on Alternative Dispute Resolution (ADR) as the potential solution. On the other hand the UAE has established an epoch-making system, the “Dubai Approach”. This system has been used to settle not only disputes tha...

Effectiveness of Shari'ah Economic and Business Dispute Resolution through Arbitration and Alternative Dispute Resolution (ADR)

TERAJU, 2021

In this paper, we will discuss a little about the effectiveness of sharia economic and business dispute resolution through Arbitration and alternative dispute resolution (ADR). So that it can be described how the dispute resolution mechanism in a civil relationship between one party and another, of course, sometimes does not work as expected. This problem will be examined using a research method with a qualitative approach, namely a research process and an understanding based on on a methodology that investigates a social phenomenon and human problems. Regarding the dispute resolution process in the economy and business of sharia Arbitration is a method of dispute resolution that can be chosen by parties who have problems or disputes. In the settlement of disputes in the court there is a tiered procedure, in the district court, high level, the Constitutional Court, PK etc., while in arbitration there are stages. Apart from that, if the decisions are different, an appeal is still pos...

Islamic Banking Dispute Resolution in National Sharia Arbitration Board

IOP Conference Series: Earth and Environmental Science, 2018

Islamic banking dispute can be resolved through the two institutions. The first is litigation path or resolution through the court process and the second is the non-litigation path or sharia arbitration institution. Sharia arbitration authority to examine and to decide disputes in sharia banking is based on the contract agreement of the parties. Therefore, the court is not entitled to review and to determine a case of sharia banking if it has been delegated to the arbitration institution based agreement because it is the choice of the parties to resolve disputes. National sharia arbitration board is non-litigation to investigate and to decide sharia economic disputes in Indonesia including sharia banking. This committee was formed along with the development of sharia financial institutions in Indonesia. Since its establishment, the agency has examined and decided about 24 sharia economic disputes. Legally, the national authority of sharia arbitration as a dispute resolution board of sharia banking has not appointed directly by law in Indonesia. Besides, the execution of the decision of the national Islamic juridical arbitration is still ambiguous, that it causes uncertainty in law enforcement.

Dispute Settlement through Banking Mediation

Acta Universitatis Danubius : Juridica, 2010

Purpose of the study: The general objective of this study was to explore the potential of the mediation process as a reformulation of Islamic banking dispute settlement after the Supreme Court Regulation (SCR) on mediation procedure in the court. On the one hand, this study tries to find a repositioning of mediation procedures in resolving disputes over Islamic Banking in religious courts. Methodology: This research was normative and empirical. The data collection techniques of this literature would be done utilizing literature study and field research. Primary data was obtained through field research with interviews. The participants from Judges of Religious Court, Abdul Manan as a Judge of in the Supreme Court Institution, Islamic banking legal unit. Data were processed by a qualitative descriptive analysis technique. Secondary data used consisted of primary legal material sourced from SCR No. 1 of 2016 and the contract.

Resolution of Islamic Banking Disputes by Way of Arbitration in Sri Lanka

Arab Law Quarterly, 2016

Islamic banking is a new, rapidly growing business, which is competing with its counterpart in Sri Lanka. As in any other area of business, emergence of disputes arising among stakeholders of Islamic banking is quite natural. However, the ability to resolve such disputes without destroying the business relationship is quite important. Many disadvantages inherent in the process of litigation may prompt those involved to seek an alternative way of dispute resolution (adr), offering less formality, lower costs and protection of privacy. Hence, in this respect, adr could be proposed as an ideal mechanism. This article strives to examine the possibility to apply arbitration for Islamic banking dispute resolution in Sri Lanka. Sri Lanka’s Arbitration Act No. 11 of 1995 may play a significant role in this sense.

Ethical Dispute Control in Islamic Banking Relationship

IOSR Journal of Economics and Finance, 2017

This paper examines application of ethical practice in conflict management process in Islamic banking relationship. The paper used interpretive qualitative research, based on current practice of Jaiz Islamic bank in Nigeria. Data were gathered from Jaiz Islamic bank staff, through semi-structured interview. The findings show that, Jaiz Islamic bank managers uses Sulh (conciliation and compromise) more than Mushawarah (consensus building) approach, once disagreements occur. If conflict escalates, they preferably employ non-binding arbitration process using experts like Fatawal-mufti and or CBN than arbiter judge (court annexed). Managers expresses their opposition to any form of court litigation, rather, they prefer out of court settlement to settle dispute, due to resultant effect of court litigation on business relationship continuity. Jaiz Islamic bankers therefore, are found to be innovative in conflict management in all customer related issues. The study contributes to literature of dispute control by effectively resolving dispute issues at less cost.

Implementation of Anti-Fraud and Mediation Strategies as Alternative Dispute Resolution in Islamic Banks: Approaches and Impacts

International Journal of Emerging Issues in Islamic Studies, 2022

The potential for disputes increases with the growth of Islamic banks due to the possible occurrence of fraud in various forms. Therefore, immediate and appropriate steps are needed to detect and resolve fraud early. When fraud is not immediately addressed, it causes enormous losses, thereby decreasing public trust in Islamic banks. The Financial Services Authority Regulation Number 39/POJK.03/2019 concerning the Implementation of the Anti-Fraud Strategy is sufficient to regulate the strengthening of the internal control system. However, the introduction and preparation of follow-up actions in resolving fraud-related disputes are still required through litigation in the Religious Courts or non-litigation using the mediation and arbitration processes. This research is conducted to resolve disputes through mediation or arbitration as indicated in the Qur'an with the term Al Shulhu. The mediation model offered is to mediate internally within the banking institution through an independent mediator appointed by the BPS (Sharia Supervisory Agency). When internal mediation is not resolved, the next stage is mediation or arbitration at a special institution, such as Basyarnas (National Sharia Arbitration Board) or LAPSPI (Indonesian Banking Dispute Resolution Alternative Institute), without ruling out selecting a litigation institution of the Religious Courts.