Digital Transformation Of Islamic Business Arbitration In The Era Of Fintech And Cross Border Transactions

Abstract

The rapid expansion of financial technology has reshaped global financial systems, including the Islamic finance industry. Digital payment systems, blockchain technology, and online financial platforms have expanded the scope of Islamic commercial transactions across national boundaries. This transformation also generates new forms of legal disputes that require adaptive and efficient dispute resolution mechanisms. Islamic business arbitration has historically functioned as an alternative dispute resolution system grounded in Sharia principles such as justice, mutual agreement, and fairness in commercial dealings. The emergence of fintech-based transactions challenges conventional arbitration procedures that rely on traditional documentation and face-to-face hearings. This study investigates the transformation of Islamic business arbitration within the context of fintech innovation and cross-border financial activities. The research applies a qualitative normative legal approach by examining regulatory frameworks, institutional arbitration practices, and emerging digital dispute resolution technologies. Findings indicate that digital arbitration mechanisms such as online dispute resolution platforms, blockchain-based evidence management, and smart contract verification can enhance transparency, accessibility, and efficiency in resolving Islamic commercial disputes. Several structural challenges remain, including regulatory divergence across jurisdictions, Sharia governance considerations, cybersecurity risks, and recognition of digital arbitration outcomes. Strengthening institutional collaboration between regulators, arbitration bodies, fintech developers, and Sharia scholars becomes essential for establishing credible and globally applicable digital Islamic arbitration systems.