Dispute Settlement and Alternative Dispute Settlement Mechanisms in Islamic Fintech in Indonesia and Malaysia: A Comparative Study Ripan Hermawan (a*)
a) Islamic Economics and Finance Department, Faculty of Economics and Business Education, Universitas Pendidikan Indonesia
*ripan[at]upi.edu
Abstract
The rapid growth of Islamic Fintech arguably has not been matched with a proven readiness of the relevant parties involved to resolve potential conflicts. As disputes naturally arise, parties involved in Islamic Fintech should be best prepared to overcome any potential disputes arising from their business practices. The parties should ideally be familiar with and best informed on the dispute settlement and alternative dispute settlement mechanisms applicable within their respective countries. The paper aims to explore the dispute settlement and alternative dispute settlement mechanisms available to parties in resolving disputes in the context of Islamic Fintech in Indonesia and Malaysia, two countries with large moslem populations and key players in Islamic Fintech. The study adopts a doctrinal legal method and uses secondary data collected from relevant regulations on dispute resolution in Islamic Fintech both in Indonesia and Malaysia. The findings reveal that a litigation in the religious court serves as the main method of dispute settlement mechanism for Islamic Fintech in Indonesia. In Malaysia, Islamic Fintech disputes are normally settled through litigation in the civil court. As regards the alternative dispute settlement mechanisms, mediation and arbitration are the two most viable, although not necessarily well-known, methods due to their simplicity, cost effectiveness, and privacy protection assurance. It is suggested that the alternative dispute settlement be the preferred solution to amicably resolve disputes in Islamic Fintech.
