Shariah Advisory Council as a Judiciary Judgment in Dispute Bai' Inah Contract in Civil Court in Malaysia

Abstract

The Islamic financing system in Malaysia is rapidly developing from time to time, with a record achievement exceeding the target of 20 percent in 2016 as intended in Central Bank of Malaysia’s Financial Sector Plan. Such a vital advancement of the Islamic financial industry needs to be in line with the advancement of an effective framework in establishing an environment that supports the industry’s development. The Central Bank of Malaysia Act (CBMA) 2009 provides that the judicial body and the arbitrator shall refer to the Central Bank of Malaysia’s Shariah Advisory Council, on any Shariah questions pertaining to Islamic financial cases. However, there are still some cases that were not referred to as the Shariah Advisory Council. This paperwork will analyze Islamic financial cases that are referred to the Shariah Advisory Council. The methodology of this study is of the qualitative approach, through case studies based on cases that have been decided in the civil court. The result of the analysis found that, from 8 Islamic financial cases between 2009 until 2018, there are only 7 cases that were being referred to the Shariah Advisory Council, covering sharia issues that involve contract principles. Meanwhile, the remaining one cases were not being referred to, because no requirement is needed to refer the case to the council. This study is expected to update the development in relation to the legal position and the statutory role of the Shariah Advisory Council on the court’s decision in Islamic financial cases.