Course Details

An arbitration clause is a mutual term in a contract or agreement that binds the parties to resolve any dispute that arises in such contract through the alternative process of arbitration. It allows the parties to settle their disputes out of the courts and without the process of adjudication or litigation. The term may specify the settling of the disagreement through a certain type of law, such as Islamic law, English common law or civil law. It may include the specification of the forum and jurisdiction of where the dispute will be settled.

This paper seeks to discuss the importance of the insertion of arbitration clause in the contracts of the Islamic banking and finance which is herein refers to as Islamic commercial contracts. This is due to the absence of competent court for the settlement of the disputes that arise from Islamic commercial contracts, the divergence of opinions among jurists of the various schools of Islamic Law and the rapid dispute resolution nature of arbitration.