Bridging Islamic Juristic Differences in Contemporary Islamic Finance

Abstract This article is an attempt to formulate a viable Sharīʿah framework for juristic differences in contemporary Islamic finance. While acknowledging the legitimacy of juristic differences as an inherent feature of Islamic law, such differences could jeopardize a nascent Islamic finance industry, leading to what has come to be arbitrarily termed 'Sharīʿah risk' in Islamic finance. Two blocks appear to represent the two disputing sides since the launch of this industry, i.e., the Middle Eastern and South East Asian markets. Thus, this article aims to bridge differences in Islamic finance by proposing a framework and set of parameters that can be applied to all Islamic banking, Islamic capital market and takāful products. Apart from the outlined framework that aims to circumvent juristic disputes, this article concludes that juristic dispute resolution in Islamic finance will not be attainable until one can appreciate the legal and regulatory differences in which Islamic finance operates worldwide.