There’s no doubt international arbitration is an effective mechanism for dispute resolution. It’s even one of the favored for international and local Islamic finance disputes. International arbitration is a very credible option to replace traditional legal proceedings. It is a private and neutral form that is constantly gaining popularity as it applies to various industries and sectors across the globe.
According to research, market practice, and statistics, the popularity of International arbitration in resolving Islamic finance disputes has risen in recent years. It’s also grown in the international finance and banking sector for a lot of great reasons. One of them is because of the use of knowledgeable experts in the field of finance and banking for arbitration and resolving conflicts.
In this article, we’ll provide you with more reasons as to why Islamic finance conflicts are best resolved via international arbitration. Read on.
Read also: How to Resolve Banking & Financial Disputes in UAE
International Arbitration offers neutral decisions
Islamic finance contracts usually involve parties that are from different countries across the Middle East and other parts of the planet. This characteristic of commercial agreements makes international arbitration the preferred method for dispute resolution compared to submitting a financial dispute to another national court that belongs to one party to a contract. The parties that are involved in an agreement can either select an arbitrator from a different country or send a request to an international institution for arbitration in order to secure an appointment. This way, there is neutrality for the choice of venue, procedures, legislation, and tribunal that all involved parties can enjoy.
A national court has the tendency to be biased or even lack the competence, experience, and resources in giving satisfactory resolution to many Islamic finance disputes while international arbitration provides a more competent result for decision making and the decision maker has principles that are not attached to any party or national authority.
Although arbitration offers a process that’s more neutral for the choice of arbitrators and law, making international arbitration a lot more beneficial of involved parties that are from different jurisdictions, there’s a concern still regarding the neutrality of international arbitration. This is why it is best to consult first with a court expert UAE.
International Arbitration offers an enforceable decision
An arbitral tribunal’s final award is a decision that’s binding instead of being a recommendation for the parties that are involved. It is an enforceable decision both internationally and locally. The award that is from arbitral tribunals is different from a local court of law’s judgment. International treaties that concern arbitral awards’ enforcement are more acceptable both locally and internationally in comparison to the enforcement of a judgment. But, there’s a widespread idea in developing countries that commercial arbitration that’s conducted by an international arbitral tribunal is biased toward the interests of Western countries. This assumption can cause other countries to be hostile to international Islamic finance disputes being resolved by international arbitration. This can also pose obstacles with regard to the enforcement of international agreements and awards for arbitration in some countries.
In addition, it can be very hard to make an arbitration contract that is effective, especially for contracts with several parties. It is, therefore, required to consider arbitration provisions carefully including the drafted contract as incomplete or defective clauses for arbitration can lead to several judicial proceedings that occur in several different local or national courts.
International Arbitration has a flexible Arbitration Process
There’s no standard of rules that’s mandatory to be followed with international arbitration. International commercial arbitration for Islamic finance disputes provides parties with the freedom to agree on the timetables and procedural rules, as well as the selection of a decision-maker who is technically an expert and most suitable in the circumstances of the unique Islamic finance dispute.
Still, there are no detailed rules or procedures, which means this can result in misconduct that is in favor of a party. It can also result in more or greater financial disputes as the parties don’t know which procedure to apply.
International Arbitration is Confidential
International arbitration for Islamic finance disputes is preferred by most businesses and corporations as it is a private process. The press and the public aren’t entitled to present a case or dispute, unlike legal proceedings that are held in local courts. Confidentiality of international arbitration can be taken as the most important advantage of this dispute resolution method.
Although international arbitration isn’t fool-proof in resolving disputes of entities that are from different countries, it is an effective way and actually the better method of resolving Islamic finance disputes. If you want to know more about international arbitration, Call us here at Farahat & Co. Our court experts in UAE can also advise you on your specific circumstances. Simply book a quick consultation today!
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