Essay: Disputes in Islamic Financial Transactions

It is imperative to ensure that disputes which occur during Islamic financial transactions are settled though a Shari’a compliant way due to several reasons. First, by seeking a Shari’a compliant way of resolving a dispute, the two sides agree that they would follow all the rules ad regulations set out by the shari’a law in all the dealings during the arbitration or conflict resolution process . Any future conflicts or disputes between the two sides would also be resolved in the same way since the initial agreement to use the Islamic dispute resolution agreement was chosen. The two sides would therefore be answerable to the public in all matters concerning the dispute since the guidelines set aside by the Islamic dispute resolution method are clearly outlined .

Secondly, the process helps in resolving issues regarding earlier resolutions made by known Shari’a compliant methods regarding awards and benefits enjoyed by either party. For instance, an amendment by the Malaysian central bank is a good example and development which reinforces the need to have Shari’a compliant resolutions in use to solve disputes in Islamic finances . The amendments made rulings that the Malaysian civil courts and all arbitrators must involve or consider the published Shari’a dispute resolution methods and rules set by the Shari’a Advisory Council of the country’s central bank while making any decisions related to Islamic finance and banking.

An Islamic judge is always advised to seek the counsel of the learned before making any rulings regarding the Islamic finance disputes . This act is taken to be not only honorable but also very important if justice is to prevail in any dispute resolution. Despite the consultation, the judge is held responsible for the ruling and none of the counsel members is held responsible for advising the judge .