Beruflich Dokumente
Kultur Dokumente
Outline
of
Presenta/on
Re-emergence
of
Islamic
Finance
Current
Trends
in
Islamic
Finance
Li/ga/on
Amicable
Dispute
Resolu/on
in
Islamic
Law
Major
Dispute
Resolu/on
Bodies
for
Islamic
Finance
Disputes
Toward
an
Interna/onal
Legal
Framework
for
Dispute
Resolu/on
Fiqh
Modern Prac/ce
Islamic Finance
Takaful
Banking
Credit policy in Islamic banks Li/ga/on Non-existence of substan/ve law on Islamic nance Qualica/ons of Judges vs. court referral to Sharah Board Sharah Resolu/ons on SAC vs. Expert Opinion Sharah Courts Can they hear & determine Islamic nance cases?
Inadequacies
&
Limita,ons
Redeni/on
of
contractual
terms
by
the
court
future
of
Islamic
nance
Emerging
area
of
interna/onal
legal
prac/ce
Foster
(2007):
a
rapidly
developing
transna/onal
legal
system.
Intl
Commercial
Li,ga,on
&
Islamic
Finance
Cross-border
commercial
transac/ons
Conven/ons
Banking
and
nancial
transac/ons
are
part
of
interna/onal
trade
import
&
export
Why
Sharah
as
the
governing
law
while
jurisdic/on
is
English
court?
Reliance
on
forum
rather
than
substan/ve
law.
Beximco
case
Court not bound by Shariah
???
More cases
Islamic Finance Li,ga,on in Malaysia Most advanced country in the prac/ce of Islamic nance increase in li/gated disputes Dierent interpreta/ons by the court to juris/c issues Sharah Advisory Council in Central Bank of Malaysia Act 2009 Sec/on 56. Reference to Shar'ah Advisory Council for ruling from court or arbitrator
AMICABLE DISPUTE RESOLUTION IN ISLAMIC LAW Paradigm shif in dispute resolu/on win-win strategy ADR Alterna/ve to what? Segling disputes in Islam origin Sulh as the bedrock of dispute resolu/on in Islam
ADR Proesses in Islamic Law 1. Qada (Adjudica/on) 2. Nasihah (Counseling) 3. Sulh (nego/a/on, media/on) 4. Tahkim (Arbitra/on) 5. Med-Arb (Media/on and Arbitra/on) 6. Muhtasib (Ombudsman) 7. Mazalim (Special Tribunals for redress) 8. Fatwa of MuDi (Expert Determina/on)
AAOIFI Standard on Arbitra,on A leading interna/onal standard-sehng body since 1991 Issues Accoun/ng, Audi/ng, Governance and Sharah Standards Adopted by over 180 nancial ins/tu/ons worldwide
AAOIFI Standard on Arbitra,on Call for Sharah-based dispute resolu/on processes AAOIFI Sharah Standard on Arbitra/on No. 32 All nancial disputes (Art. 1) Binding Islamic arbitra/on (Art. 2) Though non-Muslims may act as arbitrators, award must comply with Sharah.
Dispute Resolu,on Bodies Amendment of Arbitra/on Rules to accommodate Islamic nance disputes Ahtude of Islamic nancial ins/tu/ons Frequency of the use of arbitra/on for Islamic nance disputes
Kuala Lumpur Regional Centre for Arbitra,on (KLRCA) Established in 1978 under the auspices of AALCO Introduced Rules for Arbitra/on (Islamic Banking and Financial Services) 2007 About 2 cases under the old rules Comprehensive rules to cover wide variety of Islamic commercial law disputes. New Islamic Arbitra/on Rules 2012.
Interna,onal Center for Reconcilia,on and Arbitra,on (IICRA)Dubai Established in 2005 through joint eorts of IDB, GCIBFI & UAE Resolves all kinds of Islamic nancial disputes Adopts the AAOIFI Arbitra/on Standard Up to 120 arbitrators in its panel though only 3 are needed for a case Since 2007 when it began opera/ons, 3 cases have been resolved through arbitra/on, 1 through media/on, and 1 is pending.
Hong Kong Interna,onal Islamic Media,on and Arbitra,on Centre (IMAC) Established by the Arab Chamber of Commerce in 2008. No reference to AAOIFI Standard of Arbitra/on in its rules Just like any other interna/onal or regional body for arbitra/on and media/on Abuse of the term Islamic in the nance industry and arbitra/on prac/ce.
Prac,ce Direc,on on Media,on and Muamalat Bench in Malaysia Prac/ce Direc/on No. 5 of 2010 on Media/on Judge-led or court-referred media/on Kuala Lumpur Court Media/on Center (KLCMC) established on August 25, 2011 Media/on is free, fast, and friendly win-win seglement
Islamic nance Disputes in Saudi Arabia Unique process for dispute resolu/on for Islamic nancial disputes Commigee for the Seglement of Banking Disputes (CSBD) Jurisdic/on of court on commercial banking disputes completely ousted. An amalgam of muhtasib and mazalim tribunals
Islamic nance Disputes in Saudi Arabia Commigee for the Resolu/on of Securi/es Disputes (CRSD) for Islamic Capital Market Two-/er process CRSDappeals to the Appeal Commigee Administra/ve, Civil and Penal Suits
28 Penal
97 Civil
INTERNATIONAL LEGAL FRAMEWORK FOR DISPUTE RESOLUTION Establishment of regional Sulh centers for Islamic nance disputes U/liza/on of ICT videoconferencing and conference calls. Formal accredita/on of prac//oners and ins/tu/ons oering dispute resolu/on services
Interna,onal Legal Framework for Dispute Resolu,on Med-Ex-Arb A hybrid system of Media/on, Expert Determina/on and Arbitra/on Med-Muh A hybrid mechanism of Media/on and Muhtasib
Dispute Avoidance in Islamic nance Future of ADR dispute avoidance Example of the construc/on industry Dispute avoidance starts with legal documenta/on Some cardinal rules in Islamic law nemo dat quo non habet, gharar, riba. Ins/tu/on of hisbah Nasihah Role of Sharah Advisory Firms and Sharah Supervisory Boards
Need for a Convention on Dispute Resolution for Cross-border Disputes Conven/on on dispute resolu/on for cross- border transac/ons in Islamic nance. Problem of choice of law Islamic law is a non- na/onal legal system Uncertain/es in the interpreta/on of Islamic law Mandatory-mul/-teir system for dispute resolu/on OIC should adopt AAOIFI & propose to UNCITRAL
CONCLUSION There is a need for a consolidated framework for dispute resolu/on in the Islamic nance industry. A conven/on will allow the English court to appropriately refer to Islamic law rules as valid substan/ve law. For a real Islamic nance industry, the dispute resolu/on process should necessarily be Islamic.