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Islamic finance arbitration: integrating the classical and modern legal frameworks

Oseni, Umar Aimhanosi (2016) Islamic finance arbitration: integrating the classical and modern legal frameworks. In: Islamic banking & finance: principles, instruments & operations, 2nd. ed. The Malaysian Current Law Journal Sdn. Bhd., Selangor, pp. 549-568. ISBN 978-967-457-065-1

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Abstract

With the increasing significance of Islamic financial services in the global financial system, there is a paradigm shift to sustainable dispute resolution practices to secure ongoing business relationship. Legal experts have been exploring how the legal templates, borrowed from the age-long practice in common law jurisdictions, can be applied to legal and enforcement challenges arising out of decisions of the court on Islamic banking and finance services. This has led to the formulation of Shari’ahcompliant procedural rules for the resolution of disputes, in the form of institutionalised Alternative Dispute Resolution (ADR). From a review of the existing rules for arbitration of disputes from Islamic banking and financial services, it is clear that most of the institutional rules are patterned after the UNCITRAL Arbitration Rules 2010,1 with some structural modifications, adaptations and amendments. While there is nothing unusual in modelling the institutional rules for arbitration in Islamic banking and finance based on the UNCITRAL Arbitration Rules, there are certain specific principles that need to be considered in harmonising the classical Islamic principles of commercial dispute resolution with the modern legal framework for arbitration. This chapter examines some potential challenges conventional arbitration presents while attempting to resolve disputes in the Islamic financial services industry. In a bid to propose alternative means for the resolution of disputes, some researchers have created problems of identity and methodology. If the banking and finance system in question is truly Islamic, why should we propose conventional methods for the resolution of such disputes? Such moves may be counter-productive, as the awards to be made by the arbitral tribunals may not be better than the judgments that are being delivered by common law courts on Islamic financial service matters across the world.

Item Type: Book Chapter
Additional Information: 6807/47652
Uncontrolled Keywords: Islamic finance arbitration, legal frameworks
Subjects: H Social Sciences > HG Finance
K Law > K Law (General)
K Law > KBP Islamic Law
Kulliyyahs/Centres/Divisions/Institutes: Institute of Islamic Banking & Finance (IIiBF)
Depositing User: Dr. Umar Aimhanosi Oseni
Date Deposited: 22 Feb 2016 16:23
Last Modified: 24 Oct 2016 15:06
URI: http://irep.iium.edu.my/id/eprint/47652

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