Artificial Intelligence And Smart Arbitration In Resolving Disputes In Islamic Financial Institutions

Abstract

The rapid expansion of Islamic financial institutions has increased the complexity of dispute resolution in sharia-based financial transactions. Conventional arbitration mechanisms often face challenges related to efficiency, cost, and transparency. Artificial intelligence offers new opportunities to improve arbitration systems through automation, predictive analytics, and digital decision-support tools. This study examines the potential role of artificial intelligence in developing smart arbitration mechanisms for resolving disputes in Islamic financial institutions. The research applies a qualitative approach using doctrinal legal analysis and a conceptual review of emerging technological frameworks in dispute resolution. The findings indicate that artificial intelligence can support arbitration processes through case classification, legal reasoning assistance, document analysis, and predictive decision systems aligned with sharia principles. Smart arbitration systems may enhance procedural efficiency, increase transparency, and strengthen access to justice for financial stakeholders. Ethical governance, regulatory oversight, and compliance with Islamic legal norms remain essential considerations in implementing AI-based arbitration mechanisms. The study contributes to the development of technology-driven dispute resolution frameworks within the context of Islamic finance.