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Dispute Resolution in Malaysian Islamic Banking and Finance: Litigation or Arbitration?

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  • Norsyazwani Mohamad Nazri

    (Faculty of Law, Universiti Teknologi MARA Shah Alam, Jalan Sarjana 1/2, 40450 Shah Alam, Selangor, Malaysia)

  • Saidatun Nadia Ahmad Shukri

    (Faculty of Law, Universiti Teknologi MARA Shah Alam, Jalan Sarjana 1/2, 40450 Shah Alam, Selangor, Malaysia)

  • Syuhaeda Aeni Mat Ali

    (Faculty of Law, Universiti Teknologi MARA Shah Alam, Jalan Sarjana 1/2, 40450 Shah Alam, Selangor, Malaysia)

  • Pairus Samsudin

    (Legal & Compliance Department, Wastech Multigreen Sdn Bhd, Shah Alam, Selangor, Malaysia)

Abstract

The Islamic banking and finance sector has grown rapidly in Malaysia. While many Islamic banks offer a wide variety of Islamic transactions, disputes arising from these transactions are also on the rise. Disputes are most commonly resolved through court litigation. However, arbitration is becoming an alternative mechanism for resolving disputes in Islamic banking and finance. Therefore, the objective of this article is to study the feasibility of arbitration as an alternative to court litigation in resolving disputes in Islamic banking and finance in Malaysia, particularly after the amendment of the Arbitration Act 2005 and the issuance of new AIAC i-Arbitration Rules. Further, this article also aims to identify the appropriate mechanism for dispute resolution of Islamic banking and finance disputes in Malaysia in light of the recent amendments to the law. The qualitative methods are applied and adopted in this study by analyzing relevant statutory legislations, decided cases, books, online articles, journals, newspaper articles, websites, and other periodicals.

Suggested Citation

  • Norsyazwani Mohamad Nazri & Saidatun Nadia Ahmad Shukri & Syuhaeda Aeni Mat Ali & Pairus Samsudin, 2025. "Dispute Resolution in Malaysian Islamic Banking and Finance: Litigation or Arbitration?," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(4), pages 2793-2802, April.
    • Handle: RePEc:bcp:journl:v:9:y:2025:issue-4:p:2793-2802
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