12 Dispute Resolution and Specialized ADR for Islamic Finance »
Andrew White
From: Islamic Finance: Law and Practice
Edited By: Craig R.Nethercott, David M. Eisenberg
12.01 Although assets under management by Islamic financial institutions may only total about US$1 trillion at present, the Islamic finance industry1 worldwide is enjoying an annual growth rate estimated conservatively at between 15–20 per cent.2 Even the most unlikely enthusiasts for Islamic finance have come to the fore, as the Vatican itself recently pronounced that the ‘ethical principles on which Islamic finance is based may bring banks closer to their clients and to the true spirit which should mark every financial service’.3 12.02 In tandem with the...
Part I Introduction, 4 Dispute Resolution and Specialized ADR for Islamic Finance »
Andrew White
From: Islamic Finance: Law and Practice (2nd Edition)
Edited By: Craig R. Nethercott, David M. Eisenberg
This chapter assesses dispute resolution in Islamic finance. Simply referred to as ‘IDR’ (Islamic Dispute Resolution), this Shari’a-based form of Alternative Dispute Resolution (ADR) not only provides desperately needed subject matter expertise in Islamic finance dispute resolution but at the same time accommodates Islamic legal values and traditions in resolving the disputes that inevitably arise in the context of Islamic finance. As with construction arbitration, or labour arbitration, or any other subject-specific ADR process, IDR for Islamic finance is simply another mode of private commercial adjudication. Moreover, from the viewpoint of the State, it is much less threatening than a parallel system of Shari’a courts, which may reach decisions over which the State has no ultimate say. In fact, contrasted with such a parallel system, absent an amicable settlement—in which case the State would have no stake or direct interest anyway—the ultimate adjudication by an IDR intermediary would be subject to review and affirmation by the courts as an arbitral award. Rather than popular or state resistance to the idea of IDR, currently the greatest obstacle to increased and more widespread implementation of IDR for Islamic finance disputes is insufficient expertise and extremely limited facilitative legal and institutional frameworks.
