Thursday, 20 February 2014

Malaysia: Syariah-compatible law needed for Islamic finance transactions

KUALA LUMPUR (Feb 19, 2014): Malaysia should have Syariah-compatible law in the documentation of Islamic finance transaction to settle disputes arising from such transaction, said former chief justice Tun Abdul Hamid Mohamad.
He believed the country should move in fast because there were many factors in its favour, as compared to other countries, which among others was that Malaysia, in the eyes of the world, was an Islamic country.
"Internationally, it is seen as a model Islamic country. It is only natural for Malaysia to want to be the hub for Islamic finance," he said in his keynote address at the Learning Conference Islamic Banking and Finance here today.
Abdul Hamid said, since the beginning and up till now, countries had focused on producing Syariah-compliant products, "but there is one area (Islamic finance transaction) which no country had done to produce Syariah-compatible law for the implementation of those products and settlement of disputes arising from them.
"We know that the English law is applicable but is not completely Syariah-compatible, and we know that English lawyers and judges are not trained in Syariah. We know that most of the judges are, at least, indifferent towards Syariah," he added.
Abdul Hamid also noted that judges must educate themselves for adequate knowledge of Islamic finance and Syariah to handle or deal with those cases.
"They should start to read on the subject. Besides, the judiciary too, should conduct courses, at least to selected judges, on the subject."
Meanwhile, Abdul Hamid said lawyers should not only be thinking of representing defaulting customers in debt collection suits but should also think of cross-border contracts involving multi-national companies in Islamic finance transactions. 
(The Sun Daily / 19 Feb 2014)
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Alfalah Consulting - Kuala Lumpur: www.alfalahconsulting.com
Islamic Investment Malaysia: www.islamic-invest-malaysia.com

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