BLAZING THE TRAIL: THE INSTITUTIONAL FRAMEWORK FOR DISPUTE RESOLUTION IN MALAYSIA’S ISLAMIC FINANCE INDUSTRY

The dispute resolution framework in Islamic finance as practiced in most countries has proven to be inadequate, particularly in its application and interpretation of the Sharīʿah. Malaysia has consistently proven its prime position in blazing the trail in most legal and regulatory issues in the Islamic finance industry. It has recognised the increasing importance of the architectural aspects of the industry such as the need to establish the dispute resolution framework.

Muslim scholars have continuously argued that alternative dispute resolution (ADR) has its source in the prime references of Islamic law since it is a practice encouraged in Islam. Therefore, dispute resolution in Islamic law is a wide area of study that, though similar to the conventional practice of ADR, has its unique principles and concepts. The varieties of dispute resolution processes have been practiced since the advent of Islam about fourteen centuries ago. These processes are worth exploring and adapting to suit the modern needs of Muslims across the world.