SECP Proposes Shariah-Compliant Dispute Resolution for Islamic Finance

The Securities and Exchange Commission of Pakistan (SECP) has introduced a concept paper proposing an Alternative Dispute Resolution (ADR) mechanism tailored for Islamic finance contracts. This initiative, part of the Strategic Action Plan 2024-26, aims to facilitate out-of-court settlements—such as mediation, arbitration, and neutral evaluation—that comply with Shariah principles. By aligning dispute resolution processes with Islamic jurisprudence, the SECP seeks to enhance efficiency and bolster stakeholder confidence in the Islamic finance sector, acknowledging its significant role in Pakistan’s economy.