Federal Court rules Bank Negara SAC findings binding on Civil Courts | Malay Mail

Bank Negara Malaysia’s Shariah Advisory Council’s findings on Islamic finance is binding on Civil Courts. — Picture by Yusof Mat Isa

The court delivered the decision in a constitutional reference following a dispute in five agreements under Islamic banking facilities between Kuwait Finance House Berhad and a shipping company, JRI Resources Sdn Bhd, and three guarantors. The majority judgment was delivered by Justice Mohd Zawawi who said the rulings passed by SAC constitute a form of expert opinion in the matter of Islamic finance.

He said the SAC was merely an advisor whose role was to give an opinion on questions referred to it on Shariah law in Islamic banking and financial matters, hence there was no attempt by the executive to take over the court’s judicial power. He said an SAC ruling was not subject to any check and balance mechanism and its ruling was final with regards to issues of whether the clause in an agreement was Shariah compliant.

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