Surabaya High Religious Court Decision No. 223 of 2015: Appropriate Shari'a Economy Dispute Forum

The appellant sought to challenge the decision of the Surabaya Religious Court (5718/Pdt.G/2014/PA.Sby), which had found that it did not have the jurisdiction to adjudicate his claim.

The court grappled with the ambiguity as to an appropriate dispute resolution forum for shari'a banking disputes. It noted that between Constitutional Court Decision No. 93 of 2012, art 55 of Law No. 21 of 2008 on Shari'a Banking, and art 49(i) of Law No. 3 of 2006 on Religious Judiciary, the religious courts were not only authorised to resolve shari'a banking disputes, but all facets of shari'a economy. It also noted, however, that dispute resolution, purusant to art 49(i) of Law No. 3 of 2006, provides that parties may decide not to resolve their disputes before a religious court. In this instance, as the parties had specifically designated the National Shari'a Arbitration Body (Badan Arbitrase Syari'ah Nasional) as their preferred dispute resolution forum, art 1338 of the Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata) mandated that the parties had to abide by the terms of their agreement. Therefore, the court dismissed the appeal.

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