Litigation and non-litigation approaches in Islamic Banking Syariah resolution

https://doi.org/10.35912/josfe.v1i1.3332
Published: Aug 15, 2025

Abstract:

Purpose: This study aims to analyze dispute resolution mechanisms in Islamic banking in Indonesia, focusing on mudharabah contract disputes. It examines the role of litigation through the Religious Court and non-litigation through alternative dispute resolution institutions, particularly the National Sharia Arbitration Board (BASYARNAS), in maintaining Sharia compliance and legal certainty.

Research Methodology: This study adopts a normative juridical approach, analyzing statutory regulations such as Law No. 21 of 2008 on Sharia Banking, complemented by a literature review and doctrinal interpretation. A qualitative method is used to assess the legal frameworks and institutional practices in resolving Islamic banking disputes.

Results: Findings indicate that both litigation and non-litigation mechanisms are legally recognized and essential for upholding Sharia principles, ensuring fairness, and fostering trust among stakeholders in Islamic banking. Litigation provides authoritative judicial decisions, whereas non-litigation offers efficiency, confidentiality, and flexibility in resolving disputes.

Conclusions: The dual dispute resolution framework strengthens Islamic banking governance in Indonesia. However, its effectiveness depends on the synergy between financial institutions, regulators, and dispute resolution bodies, as well as the enhancement of institutional capacity and public awareness.

Limitations: This study is limited to legal and institutional analyses without empirical data from case studies, which may restrict insights into real-world challenges and stakeholder perspectives.

Contribution: This study contributes to the discourse on sharia-based dispute resolution by providing recommendations for improving the effectiveness, accessibility, and fairness of both litigation and non-litigation processes in Islamic banking.

Keywords:
1. Arbitration
2. Dispute Resolution
3. Islamic Banking
4. Litigation
5. Mudharabah
Authors:
Amda Usnaka
Islamic University of Bandung, Indonesia
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Vol. 1 No. 1 (2025): January
Articles
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References

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    Akabom, I. A., & Ejabu, F. E. (2018). Effects of thin capitalization and international law on performance of multinational companies in Nigeria. Journal of Accounting and Financial Management ISSN, 4(2), 2018.

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    Cardinal, L. B. (2001). Technological Innovation in the Pharmaceutical Industry: The Use of Organizational Control in Managing Research and Development. Organization Science, 12(1), 19-36. doi:10.1287/orsc.12.1.19.10119

    Carpenter, V. L., & Feroz, E. H. (2001). Institutional theory and accounting rule choice: an analysis of four US state governments' decisions to adopt generally accepted accounting principles. Accounting, Organizations and Society, 26(7–8), 565-596. doi:http://dx.doi.org/10.1016/S0361-3682(00)00038-6

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    Chow, C. W., Kato, Y., & Shields, M. D. National culture and the preference for management controls: An exploratory study of the firm--Labor market interface. Accounting, Organizations and Society, 19(4-5), 381-400. doi:10.1016/0361-3682(94)90003-5

    Djamil, F. (1994). Arbitrase Dalam Perspektif Sejarah Islam. Badan Arbitrase Muamalat Indonesia bekerjasama dengan Bank Muamalat.

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    Khan, M., Han, N., Hoi, S., & Bae, J.-H. (2019). Good faith principle of contract law for the islamic banking system. Utopía y Praxis Latinoamericana, 24(5), 239-251. doi:https://doi.org/10.5040/9781472558893.ch-002

    Majid, S., Al Hasan, F. A., Candra, M., & Saleh, A. I. (2024). Effectiveness of Dispute Resolution in Religious Courts Through Mediation by Non-Judge Mediators Within Banten. Jurnal Hukum dan Peradilan, 13(2), 251-274. doi:https://doi.org/10.25216/jhp.13.2.2024.251-274

    Mardani, M. (2011). Hukum Ekonomi Syariah di Indonesia. Bandung: Refika Aditama.

    Marzuki, P. M. (2005). Penelitian hukum.

    Maskanah, U., Burhanuddin, S. F., Zaenudin, K. M. I. S., & Suhartini, S. P. (2024). Sharia Banking Dispute Resolution Model That Is Effective, Efficient And Fair. Awang Long Law Review, 7(1), 147-155. doi:https://doi.org/10.56301/awl.v7i1.1390

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    Yustiardhi, A. F., Diniyya, A. A., Faiz, F. A. A., Subri, N. S., & Kurnia, Z. N. (2020). Issues and challenges of the application of Mudarabah and Musharakah in Islamic bank financing products. Journal of Islamic Finance, 9(2), 26-41. doi:https://doi.org/10.31436/jif.v9i2.482

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  12. Chow, C. W., Kato, Y., & Shields, M. D. National culture and the preference for management controls: An exploratory study of the firm--Labor market interface. Accounting, Organizations and Society, 19(4-5), 381-400. doi:10.1016/0361-3682(94)90003-5
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  23. Harrieti, N. (2017). Legal Implications of the Establishment of Alternative Institution of Dispute Resolution of Indonesian Banking (LAPSPI) on Sharia Banking Dispute Settlement in Indonesia. Fiat Justisia: Jurnal Ilmu Hukum, 11. doi:https://doi.org/10.25041/fiatjustisia.v11no4.1102
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  29. Khan, M., Han, N., Hoi, S., & Bae, J.-H. (2019). Good faith principle of contract law for the islamic banking system. Utopía y Praxis Latinoamericana, 24(5), 239-251. doi:https://doi.org/10.5040/9781472558893.ch-002
  30. Majid, S., Al Hasan, F. A., Candra, M., & Saleh, A. I. (2024). Effectiveness of Dispute Resolution in Religious Courts Through Mediation by Non-Judge Mediators Within Banten. Jurnal Hukum dan Peradilan, 13(2), 251-274. doi:https://doi.org/10.25216/jhp.13.2.2024.251-274
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  34. Maskur, F., Basir, A., & Dewi, S. R. (2024). Influence of job satisfaction and management information systems on employee performance in PT. Pawnshop in Palopo City. Journal of Multidisciplinary Academic and Practice Studies, 2(3), 325-334.
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  43. Soemartono, G. P. (2006). Arbitrase dan mediasi di Indonesia: Gramedia Pustaka Utama.
  44. Suryawansyah, S., & Babussalam, A. B. (2024). Resolution Of Sharia Banking Disputes Through The Religious Courts And The National Sharia Arbitration Board (BASYARNAS). De Lega Lata: Jurnal Ilmu Hukum, 9(1), 105-115. doi:https://doi.org/10.30596/dll.v9i1.18257
  45. Susanti, L. D., Reniati, R., & Altin, D. (2025). Sustainable waste management strategy based on circular economy in Pangkalpinang City. Journal of Multidisciplinary Academic Business Studies, 2(2), 449-462. doi:https://doi.org/10.35912/jomabs.v2i2.2714
  46. Umam, K. (2009). Hukum ekonomi Islam: dinamika dan perkembangan di Indonesia: Instan Lib.
  47. Winarsi, S., Thalib, P., Hajati, S., & Kholiq, M. N. (2021). Sharia banking dispute resolution in Indonesia after the verdict of the constitutional court no. 93/puu-x/2012. Utopía y Praxis Latinoamericana, 26(2), 408-416.
  48. Witro, D., Nuraeni, N., & Januri, M. F. (2021). Classification of Aqad in Sharia Economic Law. Nurani: jurnal kajian syari'ah dan masyarakat, 21(1), 55-68. doi:https://doi.org/10.19109/nurani.v21i1.8387
  49. Yustiardhi, A. F., Diniyya, A. A., Faiz, F. A. A., Subri, N. S., & Kurnia, Z. N. (2020). Issues and challenges of the application of Mudarabah and Musharakah in Islamic bank financing products. Journal of Islamic Finance, 9(2), 26-41. doi:https://doi.org/10.31436/jif.v9i2.482
  50. Zahedi, M., Abbasi, M., & Khanachah, S. N. (2020). Providing a lean and agile supply chain model in project-based organizations. Annals of Management and Organization Research, 1(3), 213-233.