The Assessment of Indonesia’s Religious Courts in Resolving Shari'ah Banking Disputes According to the Principles of Justice

Weny Almoravid Dungga

Mohamad Hidayat Muhtar

Lucyane Djaafar

 

Abstract: The Indonesian Religious Courts have the authority to resolve Shari’ah banking disputes. While this authority strengthens the role of the Religious Courts in the overall system of justice, it also poses challenges due to the rapid developments in the Islamic banking practices. This article examines the role of Religious Courts in resolving Islamic banking disputes according to the principles of justice primarily focusing on the analysis of obstacles faced by the Religious Courts in resolving such disputes. Using the normative and doctrinal legal research, this article finds that internal and external constraints have a significant impact on the effectiveness of the Religious Courts. Internal constraints include the qualifications and independence of judges, the independence of the Religious Courts, and the existing justice system. Meanwhile, external constraints include the formation of existing laws, ineffective community participation, and lack of appropriate supervision. Based on these findings, this article recommends that the government and legislature need to be proactive in updating Islamic banking laws in anticipation of the developments in the banking industry. Additionally, judges in the Religious Courts need effective training on banking disputes resolution.