M’sia should continue to focus on Islamic finance arbitrage: Sultan Nazrin

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KUALA LUMPUR: As a leading Islamic financial center, Malaysia should continue to focus on the area of ​​dispute resolution within the general framework of Islam, said Sultan of Perak, Sultan Nazrin Shah (pictures).

He said the Asian International Arbitration Center (AIAC) would do well to bring together a pool of experts in this field to become the preferred hub in Asia specializing in Islamic finance arbitration as well as disputes within halal industries.

“Islamic arbitration offers a unique route to amicable dispute resolution for businesses.

“By providing a confidential means of settling disputes and maintaining the parties’ mutual goodwill, it helps to promote more stable business relationships,” he said in his keynote address to the AIAC’s fourth conference on AIAC Asia Alternative Dispute Resolution (ADR) week 2022. in the center here today.

Sultan Nazrin said steps could be taken to train those who specialize in Sharia, Fiqh and Muamalat as Islamic arbitrators, which would allow disputes to be resolved without the need to involve counsel or an expert of Sharia.

This would make Islamic arbitration more attractive and “easier” than litigation, he added.

Sultan Nazrin said that to enable this, incentives and career paths need to be formulated so that Shariah graduates can pursue a career as Islamic umpires so that talents and human resources can be developed in the field of Islamic arbitration.

He said measures can also be introduced in relation to conventional arbitration, to ensure that Malaysia continues “to build our capacity more broadly in all areas relevant to ADR”.

Schools, colleges and universities could integrate negotiation-based ADR into their curriculum, while training institutions can also be mobilized to share skills and help develop effective ADR practitioners, it said. -he adds.

According to Sultan Nazrin, the judiciary has played and continues to play an important role in promoting Malaysia as an arbitration-friendly jurisdiction and the judiciary has consistently taken a pro-arbitration stance in recent years.

“In many cases, courts have upheld arbitration agreements despite minor flaws, supporting the parties’ choice to resolve their issues in this way,” he added.

He said arbitration was originally designed as a tool to ease the burden on courts and started as a regulatory system to settle commercial disputes relating to contracts and international business transactions.

“Arbitration mechanisms have since evolved from this original rules-based compliance, to provide greater flexibility.

“This has enabled ADR to cope with the growing complexity of the cases it handles, many of which now involve multiple stakeholders and claims,” Sultan Nazrin said.

As a result, he noted, the sector has grown to become an independent and highly valued method of dispute resolution and the type of disputes submitted to arbitration are also changing.

“These are no longer limited to contractual issues in construction contracts, cross-border transactions, trade and investment, and fintech.

“They now encompass more complex non-contractual multilateral claims related to sovereignty and territory, expropriation of property and international human rights,” he noted.

Sultan Nazrin said dynamic regulatory frameworks are therefore needed to respond to the complex and evolving nature of contracts and non-contractual claims that are now handled through ADR.

The AIAC is well placed to serve as a compass in mapping this new and challenging terrain, he said. –Bernama

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