E-arbitration as an alternative dispute resolution mechanism in Islamic banking disputes in Malaysia

Malaysia applies traditional arbitration as one of the mechanisms to resolve Islamic banking disputes. However, many opined that traditional arbitration is riddled with problems that need a prompt intervention. By adopting a doctrinal research method, this thesis examines the possibility of introducing electronic arbitration or e-arbitration as an alternative mechanism to overcome the problems in the traditional arbitration. Therefore, in the context of Islamic banking dispute resolution in Malaysia, this thesis seeks to examine the challenges with traditional arbitration, to analyse the legal and
non-legal requirements in establishing e-arbitration, and to recommend the implementation of e-arbitration in the Islamic banking industry in Malaysia. The data was collected through the library-based approach and semi-structured interviews with lawyers, academicians, arbitrators, and a chief executive officer. Several methods of data analysis, such as critical, analytical and content analysis, were employed in analysing the data. The thesis began with the proposition that e-arbitration can be an alternative dispute resolution mechanism for Islamic banking disputes in Malaysia. The findings reveal that traditional arbitration is not fully effective and efficient in resolving Islamic banking disputes in Malaysia because of its inherent legal and nonlegal challenges. Despite this, the establishment of e-arbitration in Malaysia is fraught
with many foreseeable problems as current arbitration framework does not accommodate e-arbitration. The idea of implementing e-arbitration is, however, not far-fetched. It requires some improvement to the current legal framework especially to the Arbitration Act 2005 (Act 646) and AIAC I-Arbitration Rules 2018
as well as to the non-legal aspect of e-arbitration such as the need for ensuring security and providing sufficient training. A legal framework for e-arbitration is, therefore suggested after taking into considerations the necessary improvements and requirements. This thesis also provides an e-arbitration model that illustrates the procedures required to resolve the Islamic banking disputes in Malaysia. The thesis concludes that e-arbitration is capable of addressing some major problems in traditional arbitration, along with the ability to offer new advantages to the Islamic banking disputants in Malaysia. Therefore, e-arbitration should be considered as one of the mechanisms in resolving Islamic Banking disputes in Malaysia.