Indonesian Supreme Court Judicial Decision on Sharia Economic

Disputes

Fitriyani Zein

, Alfitra

, Aminudin Yakub

, Mu’min Roup

and Dewi Angggraini

1,2, 3, 4

Universitas Islam Negeri Syarif Hidayatullah Jakarta, Jl. Ir. H, Juanda No. 95 Ciputat, Indonesia

Universitas Pamulang, Jl. Surya Kencana No.1, Pamulang Bar., Pamulang, Kota Tangerang Selatan, Indonesia

dewifhunpam@yahoo.com

Keywords: religious court; sharia economic disputes; supreme court, Islamic Financial Institutions

Abstract: The Religious Court in settling Sharia Economic disputes started on whether the decision of judges at the

level of the Religious Courts to the level of appeal in the Supreme Court in deciding on cases of Islamic

Financial Institutions (LKS) has fulfilled the provisions of the fatwa and regulations. The scope of this study

is cases of which are only at the level of appeal in the Supreme Court. While the objective of this research

was the result of a cassation verdict in the Supreme Court related to disputes in Islamic financial institutions

that were limited to banking and Islamic insurance institutions. This research method utilizes Qualitative

methods, namely literature study and documentation as well as field research, namely, conducted to obtain

information on the cassation in cases of sharia financial institution disputes in the Supreme Court. In

addition, documentation studies and in-depth interviews were also conducted with the officers of the related

Islamic financial institutions such as the director / compliance and legal division of the company. After all

data has been reviewed comprehensively and systematically, it will be formulated and outlined with

descriptive-analytical methods in order to be analyzed and reviewed through 2 (two) approaches, namely

through historical socio-legal analysis and juridical-philosophical analysis.

1 INTRODUCTION

Sharia economic growth in Indonesia is currently

growing rapidly, the implications of this growth are

developments related to cases in Islamic Financial

Institutions (LKS). The emergence of various

disputes in LKS gives birth to several ways of

settling sharia economic disputes, both through

litigation and non-litigation. Non-litigation

procedures are regulated in Law no.30 of 1999 on

arbitration and Alternative Settlement of Disputes

and Law No. 48 of 2009 concerning Judicial Power.

Article 58 of the Judicial Authority which states:

Efforts to resolve civil cases can be done externally

through arbitration or alternative case resolution.

While the litigation procedure is carried out through

religious court which is limited by Law No. 7 of

1989, which at the beginning of the religious court

was only authorized to handle marriages, inheritance,

wills, grants, endowments, and shodaqah. However,

the Law No. 3 of 2006 then expanded the authority

of the Religious Courts, in article 49; the authority

was supplemented by the handling of cases of zakat,

infaq and Sharia economics.

Article 49 of the Law also states that what is

meant by sharia economy is an act or business

activity carried out according to sharia principles,

including but not limited to Sharia law, Islamic

economic financial institutions, sharia micro

financial institutions, sharia insurance, sharia

reinsurance, Sharia mutual funds, Sharia bonds, and

Sharia medium-term securities, Islamic securities,

Islamic finance, sharia pawnshops, sharia pension

funds and sharia business institutions.

The history, preceding policies and the internal

atmosphere of the courts and religious courts place

religious courts before other judicial environments

in the early days of the one roof system according to

Prof. Dr. Bagir Manan, SH. There are three effective

solutions to catch up. First, awareness that change

towards progress is inevitable. Second, awareness to

work harder. Third, is the awareness to build and

maintain religious judicature.

The joint effort of all religious courts with the

full support of the ranks of the Indonesian Supreme

1218

Zein, F., Alﬁtra, ., Yakub, A., Roup, M. and Angggraini, D.

Indonesian Supreme Court Judicial Decision on Sharia Economic Disputes.

DOI: 10.5220/0009925312181223

In Proceedings of the 1st International Conference on Recent Innovations (ICRI 2018), pages 1218-1223

ISBN: 978-989-758-458-9

Court leaders to continue to improve them has

brought significant change in the religious courts in

Indonesia. One indicator of these changes is the high

level of public trust and public satisfaction with

religious justice.

As explained above, along with the development

of Islamic Financial Institutions (LKS), the disputes

related to Islamic economics have also arisen and

developed in court. The occurrence of disputes are

generally due to one of the incompliance of parties

upon the agreement that has been stipulated upon or

in the agreement itself that are not in accordance

with the regulations, fatwas and legal provisions of

the agreement resulting to a dispute.

The judges' understanding and knowledge of the

relevant authority arrangements, the fatwa of the

National Sharia Council of the MUI and the systems

and operations of the Sharia Financial Institution

determine the outcome of the decision.

Consideration and dictum of the judge's decision in

the Supreme Court's decision on the case of Islamic

economics is very interesting to be reviewed and

examined. From there, it was seen how competent

was the Supreme Judge.

2 METHOD

This study uses qualitative research methods with an

empirical normative approach. Normative research

is used to identify legal norms relating to the laws

and regulations governing Sharia economic matters

with the enactment of law No. 3 of 2006 which

authorizes the authority of Islamic economics to

religious courts. Previously there was a polemic

related to the settlement of sharia financial

institutions. In Law No. 21/2008 concerning Sharia

Banking has the ambiguous authority between the

settlement of disputes in the District Courts on one

hand and with the provisions of the obligation to

settle disputes based on sharia principles on the

other. Resolution of settlement with the obligation in

accordance with the provisions of sharia carried out

in the justice of this country is certainly impossible

as the judges in this judicial institution do not

possess the competence of sharia law. Therefore, to

provide legal certainty, the Supreme Court finally

issued a circular letter (SEMA) No. 08 of 2008 in

October 10

, 2008 stating that the execution of the

decision of the Sharia arbitration to be carried out on

the orders of the chairman of the religious court.

The data collection technique used in this study

is in the form of literature studies and field studies.

Literature studies are used to collect and analyse

legal sources, both primary legal sources and

secondary legal sources. While the field study is

used to collect data in the form of opinions from

related parties. Field studies carried out by means of

interviews is a question and answer process in

research that takes place orally in which two people

or more face to face listen directly to information or

statements. Interviews are conducted freely using

tools in the form of a list of questions that have been

prepared (as an interview guide) in accordance with

the disputes that will be necessary for solutions

without diminishing the possibility to add other

questions that are impulsive in accordance with the

answers provided by the respondent.

3 THEORITICAL REVIEW

There are several theories that can be used as

benchmarks in this paper. Among them are:

Compliance Theory, Agreement Theory, Estoppel

Theory, and Transaction Theory.

The Judiciary is an institution under the auspices

of the State that functions to prosecute legal cases;

this institution is called a judicial institution that

carries out the judicial authority of the State.

Religious Court Judges can describe the

understanding in terms of resolving the Sharia

Economic dispute. It starts whether the agreement

deeds made by the Islamic Financial Institution

(LKS) have fulfilled the provisions of the fatwa and

regulations, and the decisions of judges at the

Religious Court level to the cassation level in the

Supreme Court are in accordance with the regulations

and provisions of the Theory of Contracts.

Furthermore, this study describes the

understanding of the opinions of Religious Court

judges in completing the Sharia Economic case. The

question answered in this study is how the

understanding and thought of the judge in the legal

consideration of the decision of the Supreme Court

of the Republic of Indonesia concerning sharia

economic matters. This study analyses the thinking

of Supreme Court judges from the perspective of

ushul fiqh and law.

In addition, among others, there must be an

improvement in human resources for judges in

understanding the rules of Islamic banking. In

addition to understanding and mastering the legal

guidelines for sharia economic disputes, it is

expected that judges can also apply the fatwa

provisions of the Indonesian Ulema Council (MUI)

as an affirmation of the dispute resolution system in

religious courts.

Indonesian Supreme Court Judicial Decision on Sharia Economic Disputes

1219

Therefore among them human resource of judges

who must understand the rules of Islamic banking

must be increased. In addition to understanding and

mastering the legal guidelines for sharia economic

matters, it is expected that judges can also apply the

fatwa provisions of the Indonesian Ulema Council

(MUI) as a strengthening of the dispute resolution

system in religious courts.

The results of the doctoral research (S3) in Law

of the University of North Sumatra concluded that

the dispute between sharia banking was not purely

resolved based on sharia principles (fiqh) but also

included the articles of the Indonesian Civil Code.

This is partly due to the unavailability of Islamic law

in the form of legislation and the existence of

national legislation governing the issue of arbitration

in general, namely Law No. 30 of 1999 concerning

arbitration and alternative dispute resolution while

another obstruction is the inadequacy of experts

mastering Islamic arbitration law.

The Law Article 24 paragraph (1) of 1945 states

that the judicial authority is an independent authority

to conduct judicature to enact law and justice. Here

judges are required to uphold law and justice rather

than prioritize and enforce cases that are oriented to

economic values, pragmatism which can distort

morality, legal text, and ethical values, uphold

justice, logic of rationality that stands on legal

reasoning on formal legality principle. In other

words, they are free in terms of interpretation or

interference from other parties.

The focus of this article is the role of judges in

court in upholding a very strategic role in creating

justice and legal truth enabling to maintain order and

peace of the community by being just and beneficial

in providing legal decisions for the parties in dispute,

especially cases of debt to bankruptcy.

The judge's role is one of the most important

components in a court institution. In the history of

Islam, the function and role of judges at that time

were not as popular as the fuqoha, formerly the

fuqoha functioned to find the discovery of the law

(istinbat al-hukm) and the application of the law

(tathbiq al-hukm). However, currently limited judges

have sufficiently strong authority to produce legal

decisions in court (qadla), this is due to direct contact

with cases. This means that there is no possibility of

the outcome of the case's decision being influenced

by political authority and influenced by a school of

thought that was adopted.

Until now there is still a debate about the factors

of non-functioning or ineffectiveness of law in

society. Among them is the factor of law

enforcement. That is the legal factor here as if it is

only functions as a "scapegoat" against the unnerving

law caused by the low quality of judges, so that the

functions within it are not realized. This is shown in

the low intellectuality and professionalism aspects. If

measured from the aspect of education and

experience, it has indeed resolved many cases

although in terms of competence, behaviour and

mentality there are still many among the judges who

are unable to demonstrate their quality in terms of

actualizing their important roles, especially in respect

of truth and justice. Perhaps some of them have

exerted and determined something useful, but the

benefits may only be felt only by an insignificant

number of party.

The Judicial Law of Authority provides the

judges with the highest position, which is to give

judicial authority to the justice seekers. The contents

include certain rights and obligations where these

rights and obligations are the role or "rule".

Therefore, judges play a role in law enforcement and

justice. This role according to Soerjono Soekanto is

an "ideal" role.

During this period the settlement of Islamic

economic disputes was carried out by the Religious

Courts, although in this case there was a need for

improvement in the matter of resolving the Islamic

economic dispute. Opportunities to resolve disputes

through district courts will result in legal uncertainty.

Therefore the need for the role of the Supreme Court

is substantial in providing determination relating to

cases of Islamic economic disputes to be settled in a

religious court specifically and based on law.

Contributing considerations on the analysis of the

judges' thoughts in the determination of the Supreme

Court's legal decision on sharia economic disputes

was the main objective of this study. In addition, this

research is also intended to: Strengthen the

knowledge of legal / contractual practices in Islam in

Islamic financial institutions, Explain differences in

agreements / contracts in Islam and the law of

engagement in the law, assessing the legal

compliance of sharia financial institutions to

agreements in authority regulations and regulations,

and analysing judges' considerations and decisions in

the Supreme Court's cassation decision regarding

sharia economic matters.

The scope of this article is a dispute that only

reaches the level of appeal in the Supreme Court.

While the research method used in the object is the

result of a cassation decision in the Supreme Court

and data collection on banking institutions and the

Islamic insurance industry. This research method

uses Qualitative methods, namely literature study and

documentation as well as field research, namely,

conducted to obtain information on the result of

cassation in cases of sharia financial disputes in the

ICRI 2018 - International Conference Recent Innovation

1220

Supreme Court. While the documentation method

and in-depth interview are referred to the authorized

parties such as to the Judges who determines the

ruling and to the compliance and legal to the director

of a corporation.

A variety of information that has been explored

comprehensively and systematically both through

literature study and field study is then formulated and

outlined in the discussion using descriptive-analysis

method. That is, all important findings will be

systematized and described descriptively in the

discussion. Furthermore, the descriptive explanation

of the judge's decision was analysed and reviewed

through the approach of Ushul Fiqh and the Fatwa of

DSN-MUI to see its validity, consistency and

suitability. Critical analysis is also carried out

through two approaches namely historical socio-legal

analysis and juridical-philosophical analysis.

4 PROBLEM

Based on the previous analysis, it can be seen that

there are some interesting issues to be examined

from the study of judges' thoughts in legal

determination related to agreements / contracts in the

Islamic finance economy in Indonesia. In this article,

the problem of this research is limited to the

following issues:

1. The rationalization of the Judge in the legal

determination of the Supreme Court's judicial

decision on Islamic economic matters.

2. Analysis of judges in the legal considerations of

the Supreme Court's judicial decision on Islamic

economic matters from the Islamic law point of

views especially Islamic Agreement.

3. Analysis of judges in the legal considerations of

the Supreme Court's decision on sharia

economic matters from the Ushuliyah approach

and the DSN MUI fatwa.

5 DISCUSSION

5.1 The Rationalization of the Judge in

the Legal Considerations of the

Supreme Court's Judicial Decision

on Islamic Economic Matters

In legal considerations related to disputes in Islamic

Financial Institutions (LKS), the judge's decision

refers to the following legal considerations:

1. Consideration of the provisions of sharia law is

the main legal source in resolving disputes in

LKS. The source of sharia law referred to here

is the decisions of the National Sharia Council

of the Indonesian Ulema Council (DSN-MUI).

The DSN MUI fatwa, as it is known, is a fatwa

institution recognized by laws and regulations -

such as the Sharia Banking Law, the State

Sharia Securities Law, Insurance Law, and

related regulatory regulations such as the OJK

Regulation and BI Regulation - as an

authoritative institution to decide Sharia aspects

from LKS activities and products.

2. Consideration of laws and regulations - such as

the Sharia Banking Law, State Sharia Securities

Law, Insurance Law, and related regulatory

regulations such as OJK Regulations and BI

Regulations -. Various laws and regulations,

especially regulations from the relevant

authorities, are the basis for consideration of

judges' decisions in sharia economic matters.

3. Opinion of the Sharia Supervisory Board (DPS).

DPS as stipulated in the Law on the Company is

a Board of Commissioners level in a Deposit

which is an extension of the DSN-MUI which

has the duties and functions of supervising and

ensuring sharia compliance of products and

activities carried out by LKS. In this case,

Sharia Opinion from DPS is the basis for LKS

to carry out products and activities in

accordance with sharia principles.

4. Company SOP. The Standard Operating

Procedure (SOP) serves as a reference for the

activity guide and stages of LKS activities in

both funding (fund collecting) and financing

(fund distribution / financing) processes. The

SOP becomes a benchmark for an activity to

fulfil the application of standard procedure. By

this it can often be revealed whether there is a

violation and moral hazard.

5. Agreement Deeds including Notary deed. The

deed of agreement between the LKS and the

customer is notarized in a notarial deed. This

deed reflects the substance of the agreement,

terms and conditions agreed by the parties.

6. Agreement implementation based on witness

statements and legal evidence.

Indonesian Supreme Court Judicial Decision on Sharia Economic Disputes

1221

5.2 Analysis of Judges in the Legal

Considerations of the Supreme

Court's Legal Decision on Islamic

Economic Dispute from the Point of

View of Islamic Law, Especially

Islamic Agreement

1. Judges' consideration in the legal determination

of the Supreme Court's legal decision regarding

sharia economic disputes are reflected in a

single decision ranging from consideration) to

the decision. Of the several cases studied, it was

reflected that the judge's understanding of the

DSN-MUI fatwa was still lacking.

Understanding of this Fatwa indeed requires the

ability and knowledge of fiqh muamalat

maaliyah, and for analysis it requires knowledge

in the field of ushul fiqih and qawa'id fiqih and

ushul fiqih.

2. In addition, the competence in the field of

Islamic agreement is also substantial. Several

decision shortcomings were found due to the

lack of understanding in the field of Islamic

Agreement, especially related to transaction

theory and understanding of the agreements

themselves.

3. Every financial industry has different legal

characteristics and regimes. Provisions in the

fiqh of muamalat maaliyah related to

transactions and contracts are regulated

globally, do not distinguish between one

financial industry and another. But in its

implementation, OJK Regulations make

distinctive regulations and provisions for

operational areas that differ from one industry

to another. As an example between banks and

finance companies that have similar activities in

providing financing, there are certain rules in

the provision of financing (financing) in banks

that may not be done by a finance company

even though the contracts used by the two

Islamic finance industries are the same.

Likewise between the insurance industry with

guarantees industry and pension funds. All of

them have the same characteristics but there are

certain areas that are not allowed to be carried

out and entered between one industry and

another. Here is the urgency of the judge's

understanding of the characteristics and

distinctive regulations of each financial

industry.Another aspect that is significant to the

shortcomings of the Judge's legal decision in

sharia economic disputes is the understanding of

business activities carried out by the LKS where

each business practice of the LKS has

distinctions and characteristics. Banking and

insurance, for example, are two very different

business entities with very different

characteristic and regulatory provisions.

4. Another understanding that is needed by the

judge is knowledge of the mode of crime in

each line of the financial industry. Judges must

be keen to see criminal intrigues that are often

carried out by taking refuge behind regulatory

loopholes and fatwas. For this reason,

understanding of the operational activities of

judges who decide on Islamic economic matters

is very important to produce objective and fair

decisions.

5.3 Analysis of Judges in the

Considerations of the Supreme

Court's Legal Decision on Sharia

Economic Disputes from the

Ushuliyah Approach and the DSN

MUI Fatwa

The Ushuliyah approach is an important tool for

reviewing and analysing a case. Ushul Fiqih is a

substantial comprehension to be obtained by every

activist of Islamic law including judges. Without this

knowledge it will be difficult to understand the

background and substance of a legal decision. The

DSN-MUI fatwa is also the same, it must be

understood through the ushuliyah approach and also

understood by the wurud asbab and maqashid fatwa.

Judicial legal consideration in the Supreme Court's

decision regarding the dispute in LKS is quite

adequate from the ushuliyah approach. The judge

can understand the substance of the case and the

understanding of the core of the matter that is being

disputed by the parties. However, unfortunately as

mentioned above the judges' comprehension of the

DSN-MUI fatwa is still inadequate.

The weakness of the judge's understanding of the

DSN MUI fatwa lies in the lack of understanding of

the background of the fatwa, because in the process

of determining fatwas it is necessary to understand

the process, because the birth (asbabul wurud) fatwa

and debates that occur in choosing the opinions of

ulama (aqwalul ulama) during the process of

determining the fatwa. But even though judges have

weaknesses in understanding the DSN MUI fatwa,

the decision of the Supreme Court judge in a sharia

economic dispute is much better and closer to the

substance of the DSN MUI fatwa than when a sharia

economic dispute decision is still handled by a

ICRI 2018 - International Conference Recent Innovation

1222

district court judge. where PN judges do not

understand the substance of the fatwa and do not

understand maqashid al-sharia or the ushuliyah

approach.

The integrity of the knowledge of Sharia judges

about the Supreme Court in deciding on Islamic

economic cases is sufficient. Legal considerations

and decisions represent the ability of understanding

and knowledge in the field of muamalah shari'ah and

ushul fiqh. Knowledge of ushul fiqh is very helpful

as a surgical tool to analyze the law. Without

knowledge of the proposal of fiqh, the judge will

have difficulty in seeing and assessing the substance

of the case and the substance of the message and the

provisions of the correct sharia law.

In this study, researchers also conducted opinion

surveys in the legal section of companies that were

litigating. In general, the company's legal division

and the lawyers who handle sharia economic

disputes are satisfied and accept the Supreme Court

judge's decision. This is far different from the

decision when it was still handled by a district court

judge. All of that is inseparable from the mastery

and knowledge of the judges of the Shari'a,

especially the science of fiqh muamalah maaliyah

and ushul fikih.

6 SUMMARY AND CONCLUSION

Based on the study, it can be concluded with the

findings as follows:

1. Judges' decisions in sharia economic disputes

are based on many considerations, such as the

DSN-MUI fatwa, relevant Authority

Regulations, DPS Sharia Opinion, the

Company's SOPs and the Deed of Agreement

made by the parties concerned. Furthermore the

judge's determination is also a judge's legal

decision in his consideration.

2. Understanding the judges of the DSN-MUI

fatwa, as a reference for sharia law is still

inadequate. Shortcomings in the understanding

of this fatwa are based on a lack of

understanding of the knowledge of fiqh

muamalat maaliyah. Judges' competence in the

field of Islamic agreement is also still limited,

especially related to an understanding of the

contract and debate theories and the weakness

of understanding of the agreement. In addition,

the judge's understanding of the business /

company activities of each Islamic financial

institution with their respective distinctions also

needs to be strengthened.

3. Judicial legal consideration in the Supreme

Court's legal decision regarding the dispute in

LKS is quite adequate from the ushuliyah

approach. The judge can comprehend the

substance of the case and the understanding of

the core of the matter that is being disputed by

the parties. But unfortunately, as stated in

conclusion number 2, the judges' understanding

of the DSN-MUI fatwa and the contract theories

and LKS business activities is still limited.

REFERENCES

Anwar, Syamsul, 2007. Hukum perjanjian Syariah,

Rajawali Press. Jakarta

Karim, Adiwarman, 2004. Bank Islam Analisa Fikih dan

Keuangan.Grafindo Jakarta

Soemantri, Sri, 2006. Lembaga Negara Menurut Undang-

Undang Dasar Negara Republik Indonesia. Tahun

1943, Bandung: Alumni.

Utary, Maharany Barus, 2006. Penerapan Hukum

Perjanjian Islm Bersama-sama dengan Hukum

Perjanjian Menurut KUHPerdata: Studi Mengenai

Akad Pembiayaan Antara Bank Syariah dan

Nasabahnya di Indonesia. Dissertation.

Setyanegara, Ery 2013. Kebebasan Hakim Memutus

Perkara Dalam Konteks Pancasila (Ditinjau Dari

Keadilan “Substantif”). In Jurnal Hukum dan

Pembangunan Year 44 No. 4 October – December.

Nurhayati, Siti, 2016. Penguatan Peran Hukum Pengadilan

Dalam Penyelesaian Sengketa Perbankan Syariah

Pasca Putusan Mahkamah Konstitusi nomor 93/PUU-

X/2012. In Yudisia, Vol. 7, No. 2

Muhammad, Rusli, 2014. Eksistensi Hakim dalam

Pemikiran Yuridis dan Keadilan. In Jurnal Hukum

IUS IUSTUM No. 3 Vol. 21 July

Soekanto, Soerjono, 1983. Faktor-Faktor yang

Mempengaruhi Penegak Hukum, Penerbit Rajawali,

Jakarta.

Dr. Wahbah al-Zuhaili, Ushul Fiqh al-Islami, Damaskus

al-Matba’ah al-Islamiyah, 1980

Himpunan Fatwa Keuangan Syariah Dewan Syariah

Nasional Majelis Ulama Indonesia, tahun 2016

Indonesian Supreme Court Judicial Decision on Sharia Economic Disputes

1223