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Sukuk.me - Arbitration on the increase in Islamic finance

08/08/2011 02:26:18 PM GMT   Comments ()     Add a comment   Print     E-mail to friend

 [Arab News] In the high court in London earlier this year a Muslim businessman brought a case against a fellow Muslim businessman concerning a dispute over the arbitration process relating to a contract between the two parties. The one businessman objected to his counterpart appointing a non-Muslim arbitrator stressing that under Islamic law the arbitrator must be Muslim. Normally arbitration involves an alternative dispute resolution to costly litigation. But in the above case, the dispute was over the arbitration process itself. Whether an arbitrator must be a Muslim in a case involving a Muslim business or say in the Islamic finance industry is a moot point. At the Kuala Lumpur Regional Centre for Arbitration (KLRCA), for instance, the general requirement for a case involving Islamic financial institutions, is that the prospective arbitrator has to either be an Islamic scholar with experience in arbitration or an Islamic Banking Law practitioner. The arbitrator need not be a Muslim and what we look for in an arbitrator is their qualification and their award writing skills. KLRCA claims to be one of the first arbitration centers in the region to provide institutionalized Islamic Banking and Financial Services Arbitration based on specialized Islamic Banking and Financial Services Arbitration Rules. Given the growing number of court cases involving Islamic banks or financial transactions over the last few years, including several in the high court in London, financial regulators are keen to see the industry adopt alternative dispute resolution schemes involving arbitration. omar1.1 iimm.bnm.gov.my
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