Alternative Dispute Resolution (ADR) in Islamic banking and finance in Malaysia

Malaysia's Islamic banking and finance industry relies heavily on Alternative Dispute Resolution (ADR), which provides a flexible, efficient, and cost-effective alternative to traditional litigation, helping to maintain harmonious relationships, ensure confidentiality, and achieve Shariah-compliant resolutions (Dahlan, 2018). The Civil Courts in Malaysia also rely on the Shariah Advisory Council (SAC) for authoritative rulings on Shariah matters, ensuring that decisions align with Islamic principles within the broader legal framework. Malaysia's framework for settling disputes involving Islamic finance has been significantly enhanced and is now in line with contemporary advancements (Oseni & Ahmad, 2024). Arbitration, mediation, conciliation (sulh), negotiation, and consultation (shura) are some of the ADR processes that are especially pertinent in Malaysia's Islamic banking and finance industry (Rusni et al., 2022).