ABSTRACT
Saudi Arabian Islamic finance industry is one of the largest and most developed in terms of Shari’ah-compliant funds and investments that enjoys domestic and international investors’ confidence. The significance of the industry, however, means differences of understandings that inevitably lead to disputes. With Shari’ah as the basis of the legal system, the Saudi Arabian dispute settlement mechanism for Islamic finance comprises both litigation and out-of-court settlement via arbitration. These are complex processes involving the country’s Shari’ah-backed royal decrees and legal background, and the working of relevant judicial and quasi-judicial bodies that handle Islamic finance disputes under the auspices of relevant ministries and agencies. The chapter examines the practice and procedures of Islamic finance dispute settlement under local laws and the international instruments that the country is signatory to and by virtue of which Saudi Arabia recognizes and enforces foreign arbitral wards. Incorporating global practices while maintaining Shari’ah substance in settling Islamic finance dispute demonstrates the unique way Saudi Arabia ensures legal certainty and clarity in its Islamic finance practices. This approach is instrumental to investors’ confidence in the country and promotes the development and sustainability of the Saudi Islamic finance industry.
