Litigation as dispute resolution mechanism in Islamic finance: Malaysian experience

Ruzian Markom, Noor Inayah Yaakub

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

Litigation as the popular mode of dispute resolution in Islamic finance has proven inadequate in its application and interpretation of Shariah. Trails of Islamic finance cases have shown that civil court judges have no problems deciding on the civil law issues pertaining to Islamic finance, however, they are unsuited for adjudicating the Shariah issues. Section 55–58 of the Central Bank Act 2009 accords formal recognition to the Shariah Advisory Council (SAC) as their rulings is binding to the Islamic financial institutions and the courts. Post 2009 have seen that cases of law challenged the said sections as unconstitutional. The objective of this paper is to analyse the role of SAC either as expert ascertain or expert determination of the rulings on Islamic finance. In the course of discussion, s. 55–58 of Central Bank of Malaysia Act 2009 and Article 121(1) of the Constitution are analysed. Findings of the study showed that the role of SAC is merely expert ascertain of the rulings since they have no judicial power. Islamic financial law is divine in nature and different from the man made laws.

Original languageEnglish
Pages (from-to)565-584
Number of pages20
JournalEuropean Journal of Law and Economics
Volume40
Issue number3
DOIs
Publication statusPublished - 12 Sep 2012

Fingerprint

finance
central bank
expert
Law
experience
civil court
act
judicial power
civil law
Malaysia
constitution
interpretation
Litigation
Islamic finance
Dispute resolution
Central bank

Keywords

  • Arbitration
  • Discretionary powers
  • Litigation
  • Maqasid Al Shariah
  • Mediation
  • Shariah Advisory Council
  • Shariah governance framework

ASJC Scopus subject areas

  • Law
  • Economics and Econometrics
  • Business and International Management

Cite this

Litigation as dispute resolution mechanism in Islamic finance : Malaysian experience. / Markom, Ruzian; Yaakub, Noor Inayah.

In: European Journal of Law and Economics, Vol. 40, No. 3, 12.09.2012, p. 565-584.

Research output: Contribution to journalArticle

@article{aff56d8c4ae44c3293f5d2b91518591f,
title = "Litigation as dispute resolution mechanism in Islamic finance: Malaysian experience",
abstract = "Litigation as the popular mode of dispute resolution in Islamic finance has proven inadequate in its application and interpretation of Shariah. Trails of Islamic finance cases have shown that civil court judges have no problems deciding on the civil law issues pertaining to Islamic finance, however, they are unsuited for adjudicating the Shariah issues. Section 55–58 of the Central Bank Act 2009 accords formal recognition to the Shariah Advisory Council (SAC) as their rulings is binding to the Islamic financial institutions and the courts. Post 2009 have seen that cases of law challenged the said sections as unconstitutional. The objective of this paper is to analyse the role of SAC either as expert ascertain or expert determination of the rulings on Islamic finance. In the course of discussion, s. 55–58 of Central Bank of Malaysia Act 2009 and Article 121(1) of the Constitution are analysed. Findings of the study showed that the role of SAC is merely expert ascertain of the rulings since they have no judicial power. Islamic financial law is divine in nature and different from the man made laws.",
keywords = "Arbitration, Discretionary powers, Litigation, Maqasid Al Shariah, Mediation, Shariah Advisory Council, Shariah governance framework",
author = "Ruzian Markom and Yaakub, {Noor Inayah}",
year = "2012",
month = "9",
day = "12",
doi = "10.1007/s10657-012-9356-x",
language = "English",
volume = "40",
pages = "565--584",
journal = "European Journal of Law and Economics",
issn = "0929-1261",
publisher = "Springer Netherlands",
number = "3",

}

TY - JOUR

T1 - Litigation as dispute resolution mechanism in Islamic finance

T2 - Malaysian experience

AU - Markom, Ruzian

AU - Yaakub, Noor Inayah

PY - 2012/9/12

Y1 - 2012/9/12

N2 - Litigation as the popular mode of dispute resolution in Islamic finance has proven inadequate in its application and interpretation of Shariah. Trails of Islamic finance cases have shown that civil court judges have no problems deciding on the civil law issues pertaining to Islamic finance, however, they are unsuited for adjudicating the Shariah issues. Section 55–58 of the Central Bank Act 2009 accords formal recognition to the Shariah Advisory Council (SAC) as their rulings is binding to the Islamic financial institutions and the courts. Post 2009 have seen that cases of law challenged the said sections as unconstitutional. The objective of this paper is to analyse the role of SAC either as expert ascertain or expert determination of the rulings on Islamic finance. In the course of discussion, s. 55–58 of Central Bank of Malaysia Act 2009 and Article 121(1) of the Constitution are analysed. Findings of the study showed that the role of SAC is merely expert ascertain of the rulings since they have no judicial power. Islamic financial law is divine in nature and different from the man made laws.

AB - Litigation as the popular mode of dispute resolution in Islamic finance has proven inadequate in its application and interpretation of Shariah. Trails of Islamic finance cases have shown that civil court judges have no problems deciding on the civil law issues pertaining to Islamic finance, however, they are unsuited for adjudicating the Shariah issues. Section 55–58 of the Central Bank Act 2009 accords formal recognition to the Shariah Advisory Council (SAC) as their rulings is binding to the Islamic financial institutions and the courts. Post 2009 have seen that cases of law challenged the said sections as unconstitutional. The objective of this paper is to analyse the role of SAC either as expert ascertain or expert determination of the rulings on Islamic finance. In the course of discussion, s. 55–58 of Central Bank of Malaysia Act 2009 and Article 121(1) of the Constitution are analysed. Findings of the study showed that the role of SAC is merely expert ascertain of the rulings since they have no judicial power. Islamic financial law is divine in nature and different from the man made laws.

KW - Arbitration

KW - Discretionary powers

KW - Litigation

KW - Maqasid Al Shariah

KW - Mediation

KW - Shariah Advisory Council

KW - Shariah governance framework

UR - http://www.scopus.com/inward/record.url?scp=84946499649&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=84946499649&partnerID=8YFLogxK

U2 - 10.1007/s10657-012-9356-x

DO - 10.1007/s10657-012-9356-x

M3 - Article

AN - SCOPUS:84946499649

VL - 40

SP - 565

EP - 584

JO - European Journal of Law and Economics

JF - European Journal of Law and Economics

SN - 0929-1261

IS - 3

ER -