Judicial Support for the Islamic Financial Services Industry: Towards Reform-oriented Interpretive Approaches

This paper examines different dimensions of invaluable judicial support to Islamic financial services and products, and identifies specific areas where the judiciary has helped to shape the industry in line with the original value proposition of Islamic financial intermediation. While relying on qualitative legal methods with comparative case analysis from different jurisdictions, this study conducts cross-jurisdiction case analyses and identifies the role of the judiciary in introducing sustainable practices. The paper concludes that the judicial function has played a significant role in ensuring justice and fairness through the purposive interpretation of contracts, recognition and enforcement of foreign arbitral awards and judgments, consistency and predictability of outcomes, legal risk mitigation, and facilitation of mediation and arbitral proceedings, thereby positively reshaping the future of Islamic finance industry. Above all, the availability of binding judicial precedents, which is hitherto not common for Islamic law matters, is a welcome development in the Islamic finance industry.