Understanding Disputes in Islamic Banking

Oct 13, 2025 by talynt.org 92 views

Understanding Disputes in Islamic Banking

Disputes in the context of Islamic banking are situations where there are differences of opinion between two or more parties in an agreement, where one party feels disadvantaged or dissatisfied. In the world of Islamic banking, dispute resolution can be done through two channels: litigation and non-litigation. In this article, we will discuss the applicable sharia contract law arrangements, how to resolve disputes that arise in the practice of Islamic banking in Indonesia, as well as its application at the BRI Syariah Bank Branch of Tebing Tinggi Sub-Branches.

Sharia Contract Legal Regulation in Islamic Banking in Indonesia

Sharia contract law in Indonesia is regulated by several regulations that include laws regarding Islamic banking. Bank Indonesia Authority and the Financial Services Authority (OJK) have an important role in overseeing and regulating the practice of Islamic bank operations to be in accordance with sharia principles. This arrangement is vital so that all the agreements and financial products offered, such as mudharabah, murabaha, and ijarah, are not only in accordance with positive law but also sharia principles.

The regulation of sharia contract law in Indonesia is crucial in ensuring that Islamic banking practices are in line with the principles of sharia. This includes the prohibition of riba (interest) and the promotion of fairness and transparency in all financial transactions. By regulating sharia contract law, Bank Indonesia and OJK aim to provide a safe and secure environment for Islamic banking operations to thrive.

Dispute Resolution in Sharia Contracts

In practice, if there is a dispute in a sharia contract, the parties concerned have two alternative settlement alternatives, namely through the litigation and non-litigation pathway. The litigation path refers to the formal legal process that is traversed in court, while the non-litigation pathway includes dispute resolution outside the court, which prioritizes deliberation and mediation efforts.

Before using the litigation path, the non-litigation process is usually prioritized. This aims to reduce the burden in court and find a more peaceful and mutually beneficial solution. However, if no agreement is achieved through deliberations, then the litigation path will be the last choice.

The non-litigation pathway is often preferred because it allows for a more flexible and informal approach to dispute resolution. This can include mediation, arbitration, and other forms of alternative dispute resolution (ADR). By using ADR, parties can avoid the costs and delays associated with litigation, and instead focus on finding a mutually beneficial solution.

Case at Bank BRI Syariah KCP Tebing Tinggi

At Bank BRI Syariah KCP Tebing Tinggi, there are several cases of disputes that have been resolved. From the results of the study, three (3) disputes were found that were resolved through the litigation channel in the Religious Court because of the achievement of an agreement in the deliberation process. In addition, there was no solution carried out through the National Sharia Arbitration Agency (Basyarnas), because the parties preferred to entrust dispute decisions to the court.

This shows that, although there is an option to resolve disputes in Basyarnas, trust in the court process is still the first choice. This could be caused by perceptions of the courage, speed, and formal legal system that is recognized and structured.

The case study at Bank BRI Syariah KCP Tebing Tinggi highlights the importance of understanding the options for dispute resolution in Islamic banking. By knowing the different pathways available, parties can make informed decisions about how to resolve their disputes. This can help to reduce the burden on the court system and promote a more peaceful and mutually beneficial solution.

Conclusion

Dispute settlement on a sharia contract at BRI Syariah Bank KCP Tebing Tinggi shows that the process is in line with the applicable laws and regulations. Although the non-litigation path is prioritized in resolving conflicts, in fact, not all disputes can be resolved by means of deliberation. Knowing the options for dispute resolution is very important for customers so that their rights are protected and conflicts can be resolved in a fair way.

Public trust in the court as a final solution is a reflection of their experience and hopes for transparent and integrity justice. By understanding the options for dispute resolution, parties can make informed decisions about how to resolve their disputes and promote a more peaceful and mutually beneficial solution.

Recommendations

Based on the study, the following recommendations can be made:

Promote awareness about the options for dispute resolution in Islamic banking, including the non-litigation pathway.
Improve the efficiency of the non-litigation pathway, including mediation and arbitration.
Increase transparency in the dispute resolution process, including the use of technology to facilitate communication and documentation.
Provide training for Islamic banking professionals on the principles of sharia contract law and dispute resolution.

By implementing these recommendations, Islamic banking institutions can promote a more peaceful and mutually beneficial solution to disputes, and protect the rights of customers.

Limitations of the Study

This study has several limitations, including:

Limited sample size: The study only examined three cases of disputes at Bank BRI Syariah KCP Tebing Tinggi.
Limited scope: The study only focused on the dispute resolution process in Islamic banking and did not examine other aspects of Islamic banking operations.
Limited data: The study relied on secondary data and did not collect primary data through surveys or interviews.

Future studies can build on this research by examining a larger sample size, a broader scope, and collecting primary data through surveys or interviews.

Future Research Directions

Future research can explore the following directions:

Comparative study: Compare the dispute resolution process in Islamic banking with other types of banking, such as conventional banking.
Case study: Conduct a case study of other Islamic banking institutions to examine their dispute resolution processes.
Survey study: Conduct a survey of Islamic banking customers to examine their perceptions of the dispute resolution process.

By exploring these research directions, future studies can provide a more comprehensive understanding of the dispute resolution process in Islamic banking and promote a more peaceful and mutually beneficial solution to disputes.

Q1: What is alternative dispute resolution (ADR) in Islamic banking?

A1: Alternative dispute resolution (ADR) in Islamic banking refers to the process of resolving disputes outside of the court system, through methods such as mediation, arbitration, and negotiation. ADR aims to provide a more flexible and efficient way to resolve disputes, while promoting a peaceful and mutually beneficial solution.

Q2: What are the benefits of ADR in Islamic banking?

A2: The benefits of ADR in Islamic banking include:

Reduced costs: ADR can be less expensive than litigation, as it avoids the costs associated with court proceedings.
Increased efficiency: ADR can be faster than litigation, as it allows for a more streamlined and efficient process.
Improved relationships: ADR can help to preserve relationships between parties, as it promotes a more collaborative and respectful approach to dispute resolution.
Enhanced reputation: ADR can help to enhance the reputation of Islamic banking institutions, as it demonstrates a commitment to fairness, transparency, and customer satisfaction.

Q3: What are the different types of ADR in Islamic banking?

A3: The different types of ADR in Islamic banking include:

Mediation: Mediation involves a neutral third-party facilitator who helps the parties to negotiate a mutually acceptable solution.
Arbitration: Arbitration involves a neutral third-party decision-maker who makes a binding decision on the dispute.
Negotiation: Negotiation involves direct communication between the parties to reach a mutually acceptable solution.
Expert determination: Expert determination involves a neutral third-party expert who makes a binding decision on the dispute.

Q4: How does ADR work in Islamic banking?

A4: ADR in Islamic banking typically involves the following steps:

Dispute identification: The parties identify the dispute and decide to use ADR.
Selection of ADR method: The parties select the ADR method to be used, such as mediation or arbitration.
Pre-hearing preparation: The parties prepare for the ADR process, including gathering evidence and identifying key issues.
ADR hearing: The ADR process takes place, either in person or through electronic means.
Decision or agreement: The ADR process results in a decision or agreement between the parties.

Q5: What are the advantages of using ADR in Islamic banking?

A5: The advantages of using ADR in Islamic banking include:

Flexibility: ADR can be tailored to the specific needs of the parties and the dispute.
Cost-effectiveness: ADR can be less expensive than litigation.
Increased efficiency: ADR can be faster than litigation.
Improved relationships: ADR can help to preserve relationships between parties.

Q6: What are the challenges of using ADR in Islamic banking?

A6: The challenges of using ADR in Islamic banking include:

Lack of awareness: Some parties may not be aware of the ADR options available to them.
Lack of trust: Some parties may not trust the ADR process or the neutral third-party facilitator.
Complexity: Some disputes may be complex and require specialized expertise.
Cultural differences: Some parties may have different cultural backgrounds and values that can affect the ADR process.

Q7: How can Islamic banking institutions promote ADR in their operations?

A7: Islamic banking institutions can promote ADR in their operations by:

Providing education and training: Educating employees and customers about the benefits and process of ADR.
Developing ADR policies and procedures: Establishing clear policies and procedures for ADR in Islamic banking.
Encouraging the use of ADR: Encouraging customers and employees to use ADR in resolving disputes.
Providing support and resources: Providing support and resources for ADR, such as mediation and arbitration services.

Q8: What are the future directions for ADR in Islamic banking?

A8: The future directions for ADR in Islamic banking include:

Increased use of technology: Using technology to facilitate ADR, such as online mediation and arbitration platforms.
Development of new ADR methods: Developing new ADR methods, such as expert determination and negotiation.
Improved awareness and education: Improving awareness and education about ADR in Islamic banking.
Enhanced regulation and oversight: Enhancing regulation and oversight of ADR in Islamic banking to ensure fairness, transparency, and customer satisfaction.