Islamic law should prevail over secular law when a Malaysian court hears Shariah finance matters, a religious scholar said, responding to uncertainty in the industry about how to deal with legal disputes.
Dispute resolution is expected to be a key area for the $1 trillion (Dh3.67trn) Islamic finance sector as a fragmented regulatory framework and untested court systems push legal wranglings into unchartered territory.
The ability of civil court judges to adjudicate on sharia matters and possible contradictions between secular and Islamic law are some issues that the industry is grappling with.
Sharia advisor Engku Rabiah Adawiah Engku Ali said a Malaysian law requiring judges to refer Islamic law issues to national level sharia advisers "should be indicative that the Shariah principle should prevail".
But Malaysian law does not make it clear that the Shariah should prevail in the event of a conflict with secular law, resulting in some uncertainty, she said.
"That should be clarified by the legislative,"| she said on the sidelines of a sharia scholars conference.
Malaysia has the world's largest Islamic bond market.
The relationship between Islamic and secular law is unclear. This is reflected in a 2004 case involving Shamil Bank of Bahrain where an English court refused to apply Islamic law to a murabaha contract.
Link: http://www.business24-7.ae/Articles/2009/11/Pages/03112009/11042009_0e520031491b4e4ba2bf483119a81643.aspx
Dispute resolution is expected to be a key area for the $1 trillion (Dh3.67trn) Islamic finance sector as a fragmented regulatory framework and untested court systems push legal wranglings into unchartered territory.
The ability of civil court judges to adjudicate on sharia matters and possible contradictions between secular and Islamic law are some issues that the industry is grappling with.
Sharia advisor Engku Rabiah Adawiah Engku Ali said a Malaysian law requiring judges to refer Islamic law issues to national level sharia advisers "should be indicative that the Shariah principle should prevail".
But Malaysian law does not make it clear that the Shariah should prevail in the event of a conflict with secular law, resulting in some uncertainty, she said.
"That should be clarified by the legislative,"| she said on the sidelines of a sharia scholars conference.
Malaysia has the world's largest Islamic bond market.
The relationship between Islamic and secular law is unclear. This is reflected in a 2004 case involving Shamil Bank of Bahrain where an English court refused to apply Islamic law to a murabaha contract.
Link: http://www.business24-7.ae/Articles/2009/11/Pages/03112009/11042009_0e520031491b4e4ba2bf483119a81643.aspx
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