Dispute resolution in Islamic finance: the way forward

This chapter seeks to bring together the various views on the way disputes involving Islamic financial contracts can be resolved. The difficulties in the resolution of such disputes is highlighted by the fact that any resolution of disputes requires considerable knowledge of both dispute resolution mechanisms and Shari’ah law. This is made more complex by the different approaches of countries practicing Islamic finance and the different emphases given to the various forms of dispute resolution. The chapter commences by considering the choice of law for dispute settlement and the most common mechanisms used presently. It then goes onto to discuss the key findings from the five case study jurisdictions. The chapter concludes by proposing that there will be a shift away from litigation, most likely towards arbitration. In addition, it is contended that the use of international agreements will become more widespread thus allowing for arbitral awards to be recognized for domestic purposes.