Islamic finance, particularly Islamic banking, is growing very fast all over the globe. It is clearly evident nowadays to notice the persistent and overwhelming steady move of Islamic banking products, which are needed and welcomed to complement the national economy of many countries.
The spread of Islamic banking is reaching a very high percentage at very high rates that exceed 20 to 25%, as revealed in many statistics and studies undertaken by many concerned recognized institutes. This steady march is due, among other things, to the philosophical stand and special nature of Islamic banking products that are far away from greediness, speculation, uncertainty, ambiguity and riba free…
Islamic banking, as a matter of fact, has been classified earlier by one of the Governors of Bank of England as not banking per se because there is no interest application i.e. interest-free, while taking interest is the cornerstone for any banking activity. Now, Islamic banking is in the heart of the business corner in London. It is, also, fully available in Moscow, Tokyo, New York, Paris, Sydney …., and many other eastern or western countries.
To support this march, there is a genuine need for many new products to satisfy the growing needs of consumers at different places and with different requirements. To achieve this strategy, a positive stand is required from Sharia Scholars, Sharia Jurists and Sharia Councils & entities to look into such requirements for their accommodation and, moreover, appropriate application for their benefit and the benefit of the community at large…
However, from a legal perspective, we believe that a proper fast and equitable channel is required to settle different disputes that could arise at any time between concerned parties. In this connection and due to the special nature of Islamic finance & Islamic banking, it would be most prudent, most accurate and appropriate to seek arbitration as the most suitable appropriate vehicle for settlement of all disputes in lieu for Judicial Courts. Arbitration, no doubt, proves itself as the best alternative mechanism for settlement of disputes.
Moreover, arbitration has been ruled and instructed by ALLAH in Surratt An-Nisaa (The Women) wherein it has been stated. QUOTE (35) (If ye fear a breach between them twain, appoint (two) arbiters, one from his family and the other from hers; if they wish for peace, Allah will cause their reconciliation: For Allah hath full knowledge, and is acquainted with all things) UNQUOTE. What more is needed than such rule to seek arbitration in case of disputes…., and this, as a rule, applies to all kinds of disputes that could happen in our daily life including investment business, trade & banking disputes.
The importance of seeking arbitration, with reference to Islamic banking disputes in particular, stems from the fact that Islamic banking products are of special technical nature that requires special technical understanding. This kind of technical understanding mostly is not available in Judicial Courts. However, alternatively, this technical understanding will be available when taking the dispute to an arbitration tribunal composed of Sharia Scholars, Jurists, and elites. Here, in the arbitration tribunal, the advantage of Sharia knowledge is mostly available to a very high degree of certainty. They are better off, in understanding all issues related to musharakha, murabaha, salaam, tawaruq, takaful…etc. So, let’s give them their dues.
By choosing arbitration tribunal composed of Islamic Jurists & Scholars, as the suitable mechanism and appropriate means for settlement of disputes that could arise in relation to Islamic banking disputes, we will not face a situation that is similar to what had happened, as an example from many cases, in the High Court & Court of Appeal in London in the famous precedent case of:
Shamil Bank of Bahrain vs. Beximo Pharmaceuticals Ltd & Others……
In this case, the English Courts explained that the “Glorious Sharia Rules” are not framed or drafted in a certain specific law. They represent general principles with different schools of thought expressing many ideas. Whereas, on the other hand, a reference to the English Law or other codified laws like the French Law or German Law…etc. is clear and acceptable.
To escape such instances and to minimize appearance before Judicial Courts, or other similar authorities, to a very lesser degree we strongly believe that seeking arbitration is a matter of necessity, if not a must, for the steady promotion and continuous progress of Islamic finance and Islamic banking.
Go for arbitration to settle all disputes related to Islamic finance and Islamic banking issues, if any, and rest assured that you will not regret choosing such alternative…
Dr. AbdelGadir Warsama Ghalib
SENIOR LEGAL ADVISOR
Email: awarsama@warsamalc.com
