Abstract

This paper examined the features of the new dispute resolution regime for Islamic finance known as the ‘Dubai Approach’. As the Islamic financial market has expanded, various legal cases have emerged, and this has encouraged the recent development of studies of dispute resolution in Islamic finance. Most of these studies focus on court judgments and the Alternative Dispute Resolution (ADR) awards as case studies. As some disputed cases have been brought to court or ADR, there have been some discussions on how to deal with Islamic financial disputes under both types of procedures.

The procedures for dealing with disputes in Islamic finance cases are now one of the crucial issues that need to be tackled to sustain the Islamic financial market. While Islamic finance was struggling over which resolution to apply, the Dubai shock took place, which led to some major Islamic financial products and institutions becoming involved in a number of disputes as a result of the financial crisis. It it is not clear how these disputes were resolved. By analyzing these dispute resolutions for Islamic finance, it was found that this new method of resolution had features that were different from the court and ADR systems. This paper analyzed the “Dubai Approach” for its unique status as a dispute resolution system compared with more conventional systems.