Revolutionising Islamic Banking Dispute Resolution in Malaysia: The Potential of E-Arbitration

Mohamad Fateh Labanieh

Mohammad Azam Hussain

Zeeshan Ashraf

Shahrizal M. Zin

 

Abstract: The Malaysian government has supported the steady growth of the Islamic banking industry by providing a coherent dispute-resolution framework. However, electronic arbitration (hereinafter referred to as “e-arbitration”) has not yet been regulated in Malaysia. The existing arbitration framework in Malaysia tends to respond slowly to establish and regulate e-arbitration. By using doctrinal legal research methodology with a qualitative approach, this article examines the potential of establishing e-arbitration in resolving Islamic banking disputes in Malaysia. The data were sourced using a library-based and qualitative approach, especially by conducting semi-structured interviews with seven (7) respondents who were selected using purposive sampling. Their selection criteria were based on job description or title, department and specialisation. Both primary data, such as laws, acts, case law, and interview data, and secondary data, such as journal articles, textbooks, and online resources, are scrutinised using analytical, critical and content analysis methods. The article finds that establishing e-arbitration will take the Malaysian arbitration industry to an advanced and modern level. It is recommended that Rule 13 of the I-Arbitration Rules 2023 be amended to harmonise with the provisions outlined in sections 56 and 57 of the Central Bank of Malaysia Act 2009 (Act 701). Additionally, efforts should be made to address the prevailing challenges associated with traditional arbitration, such as its cost-intensive and time-consuming nature. Furthermore, Malaysian authorities, including AIAC, should explore the implementation of e-arbitration method that aligns with Goal thirteen (13) of the Sustainable Development Goals (SDG). This goal emphasises the urgent need to tackle climate change and its repercussions by promoting sustainable practices.