ABSTRACT PROCEEDING INTERNASIONAL CONFERENCE ON ISLAM AND LOCAL WISDOM (ICLAW)

Abstract Islamic banking dispute can be resolved through the two institutions. The first is litigation path or resolution through the court process and the second is non litigation path or sharia arbitration institution. Sharia arbitration authority to examine and to decide disputes in sharia banking is based on the contract agreement of the parties. Therefore, the court is not entitled to examine and to decide a case of sharia banking if it has been delegated to the arbitration institution based agreement because it is the choice of the parties to resolve disputes. National sharia arbitration board is non litigation to investigate and to resolve sharia economic disputes in Indonesia including sharia banking. This board was formed along with the development of sharia financial institutions in Indonesia. Since its establishment, the agency has examined and decided about 24 sharia economic disputes. Legally, the national authority of sharia arbitration as a dispute resolution board of sharia banking has not appointed directly by law in Indonesia. In addition, the execution of the decision of the national Islamic juridical arbitration is still ambiguous, that it causes uncertainty in law enforcement.