Overview

Indonesia is a country with the biggest Muslim population and thus principles of Islamic law are commonly implemented across its various business sectors, including the financial sector, so as to better accommodate the specific needs of its many Muslim citizens. The trend for Islamic finance developed during the twentieth century and involves the application of different, Sharia-related principles to the banking sector.[1]

With a massive number of potential consumers, Islamic banking and businesses have recently managed to achieve exponential growth across Indonesia, with high numbers of transactions currently being made. However, this has, in turn, led to an increase in the number of disputes which are arising as a consequence. In response to this phenomenon, the Islamic Clergy Council (Majelis Ulama Indonesia – “MUI”) took the initiative and established the country’s first and only Islamic arbitration institution, the Indonesian Muamalat Arbitration Institution (Badan Arbitrase Muamalat Indonesia – “BAMUI”), which later changed its name to the National Islamic Arbitration Board (Badan Arbitrase Syariah Nasional – “Basyarnas”).[2]