Alternative to conventional banking and financial institutions, Islamic finance has seen a significant growth in recent decades. The pace, however, seems to have been impacted in recent years in particular in light of the Covid-19 public health crisis. Current judicial systems in majority, may in principle seem incompatible with Islamic financial institutions and associated products. Therefore, and due to the foundation and purpose behind this branch of finance, alternative dispute resolution has become a topic in this context. With a particular focus on arbitration, Robert Bühler has analyzed the preliminary concepts behind Islamic finance and its feasibility to combine it Western alternative dispute resolution mechanisms within the scope of his Certificate of Advanced Studies Courses in Arbitration at the Swiss Arbitration Academy in collaboration with the Universities of Luzern & Neuchâtel.
In his studies, Robert Bühler comes to the conclusion, that Arbitration with its fundamental openness to international backgrounds, cultures and laws governing contract formation, can seemingly be considered as a viable solution for disputes within the context of Islamic finance. Especially, when parties from diverse backgrounds are involved. Arbitration provides for flexibility that is in general absent from state courts and judicial systems. Surprisingly, there are very few cases published with a reference to Islamic law, Islamic finance and arbitration. In the context of Islamic finance, parties could conceivably designate Sharia as the governing law and a Sharia expert as the arbitrator. Presuming the conditions set by the New York Convention are met, the judgment would in principle be enforceable in all the signatory jurisdictions. Islamic finance and arbitration could both be part of a growing economy, on the condition that involved parties would have the intent to understand each others’ needs and to accept arbitration as a flexible mechanism for the effective resolution of potential disputes.
We congratulate Robert Bühler to his successfully completed CAS Arbitration and his remarkable findings in his paper on Islamic Finance and Arbitration.