This is our published view
The bench stands behind it
For your facts, in confidence, put the question to the firm.
The bench stands behind it
The position
Both jurisdictions run a statutory apex Shariah body whose rulings bind, sitting above a committee inside each institution.
Both jurisdictions run a statutory apex Shariah body whose rulings bind, sitting above a committee inside each institution. They are close cousins in design. The decisive difference is how far the apex body’s rulings reach. In the UAE, the Higher Shariah Authority’s resolutions and fatwas bind the internal Shariah committees, the Islamic financial institutions, and any entity that seeks the Authority’s opinion, the regulated population, and no further (Federal Decree-Law No. 6 of 2025, Article 24(8)). In Malaysia, the Shariah Advisory Council’s rulings bind not only the institutions but the courts and arbitrators themselves when a Shariah question arises in Islamic-finance litigation (Central Bank of Malaysia Act 2009, sections 56 and 57).
That single difference, supervisory reach in the UAE against judicial reach in Malaysia, is the point of the comparison and is developed below. A second difference sits on the standards layer: the UAE imports an external standard, adopting the AAOIFI Shariah Standards as its minimum, whereas Malaysia generates its standards internally through the Council and the central bank’s own policy documents. On sourcing, the UAE side of this comparison is drawn directly from the primary decree-law; the Malaysian side is drawn from the statutory text as quoted across multiple secondary sources, including the reported Federal Court judgment and the central bank’s own description, and has not been checked against the official Malaysian register, so the Malaysian points should be confirmed there before reliance.
The structural parallel is real. In the UAE, the Higher Shariah Authority is a statutory body attached to the Central Bank, of five to seven members expert in the jurisprudence of Islamic financial transactions, charged with establishing the Shariah rules, controls, standards and governance requirements for the sector and with supervising the committees inside institutions (Federal Decree-Law No. 6 of 2025, Articles 24(1) and 24(5)). In Malaysia, the Shariah Advisory Council is a statutory body established under the Central Bank of Malaysia Act 2009, which the central bank describes as the sole authoritative body on Shariah matters in Islamic banking, takaful and Islamic finance, whose rulings prevail over any conflicting ruling of another Shariah body in Malaysia (Bank Negara Malaysia, describing the Shariah Advisory Council).
Both sit above an institution-level committee, and both control that committee. The UAE’s Internal Shariah Supervision Committee and Malaysia’s Shariah Committee each supervise their institution’s compliance and each answer upward to the apex body. So at the level of architecture, a person who understands one system will recognise the other: a statutory apex authority, a committee in each firm, and a chain of authority running from the firm to the apex. The divergence is not in the shape of the pyramid but in how far the apex body’s word travels beyond the regulated firms.
In the UAE the binding reach is supervisory. The decree-law states that the Authority’s resolutions and fatwas are binding on the internal Shariah supervisory committees, on the Islamic financial institutions, and on other entities seeking the Authority’s opinion (Federal Decree-Law No. 6 of 2025, Article 24(8)). The list is a list of the regulated and those who come to the Authority voluntarily; the courts are not named in it. Reading the provision structurally, the omission is the point: the Authority’s writ runs to the institutions it supervises and the parties who ask, not to the judiciary. That is an inference from the enumerated list to the absence of the courts from it, and it is marked as such rather than asserted as an express exclusion.
In Malaysia the binding reach extends into litigation. Where a Shariah question arises in any proceedings relating to Islamic financial business before a court or arbitrator, the court or arbitrator must take into consideration any published ruling of the Council or refer the question to it (Central Bank of Malaysia Act 2009, section 56), and any ruling the Council then makes is binding on the institutions and on the court or arbitrator that made the reference (section 57). The Malaysian Federal Court upheld the constitutionality of these provisions, by a five-to-four majority, in JRI Resources Sdn Bhd v Kuwait Finance House (Malaysia) Bhd [2019], holding that the Council ascertains Islamic law while the court retains the power to decide the dispute (statutory text and holding as quoted across multiple secondary sources, including the reported judgment; not verified against the official Malaysian register). The contrast is therefore sharp: the UAE Authority binds the regulated, and the Malaysian Council additionally binds the adjudicator.
The practical consequence shows up when an Islamic-finance contract is litigated. In Malaysia, a Shariah question in such a dispute is not resolved by the civil judge weighing competing expert testimony; it is referred to the Council, whose ascertainment of the Shariah binds the judge, who then applies it to decide the case. The locus of Shariah authority in the courtroom is the Council. In the UAE, the Authority’s rulings govern the regulated relationship, the institution’s products, contracts and conduct, but the decree-law does not install an equivalent binding-reference mechanism into court proceedings; a UAE Islamic-finance dispute is decided by the competent court on the law and the evidence before it, without a statutory duty to refer the Shariah question to the Authority for a binding ascertainment.
For a party structuring or litigating a cross-border Islamic-finance matter, this is the difference to hold. A Shariah determination that is authoritative and court-binding in a Malaysian dispute has no automatic equivalent status in a UAE dispute, and the route by which a Shariah question reaches an authoritative answer differs between the two forums. That observation is drawn from the presence of the reference mechanism in the Malaysian statute and its absence from the UAE decree-law’s binding-effect provision; it is a structural reading of the two texts, not a statement about how any particular UAE court has ruled, and the litigation practice in each forum should be confirmed on the facts.
Beneath each apex body sits a committee in the firm, and here the two systems converge again. In the UAE the Internal Shariah Supervision Committee is mandatory, independent, appointed with the Authority’s approval, and its fatwas bind the institution so far as they are consistent with the Authority’s (Federal Decree-Law No. 6 of 2025, Article 75). In Malaysia the Shariah Committee performs the parallel role at institution level under the Islamic Financial Services Act 2013 and the central bank’s Shariah governance framework, with review and audit functions feeding back to it (drawn from practitioner sources; the Malaysian provisions have not been read at their primary source). The institution tier is therefore structurally similar in both systems: a firm-level committee, supervised from above, responsible for the firm’s day-to-day Shariah compliance. The difference the comparison turns on is above this tier, not at it.
Keeping the two layers distinct, the regulatory instrument that binds and the Shariah standard whose bindingness depends on adoption, the two jurisdictions diverge on where the standard comes from. In the UAE the regulatory instrument is the decree-law and the Central Bank’s Shariah-governance standards, and the Shariah standard imported beneath them is the AAOIFI Shariah Standards, adopted by the Authority as the minimum requirement, without exception, from 1 September 2018 (as set out in the companion article on Shariah standards; primary via the Central Bank’s own guidance note). The UAE, in other words, imports an external standard and makes it the floor.
Malaysia’s standard is generated internally. The Council issues its own rulings, and the central bank issues its own policy documents on specific Islamic contracts, and together these form the standard that Malaysian institutions apply, rather than a wholesale adoption of an external body’s standards. The well-known position that Malaysia follows its own Council-driven standards rather than adopting AAOIFI as a binding minimum is stated here on secondary sources; the precise treatment of AAOIFI within the Malaysian framework has not been verified against a central-bank instrument and should be confirmed before it is relied on. The comparative point that survives the sourcing caution is the structural one: the UAE’s standard layer is an adopted external standard, while Malaysia’s is an internally produced one, and a product certified against one is not, for that reason, certified against the other.
The comparison earns its place by throwing the UAE model into relief. The Higher Shariah Authority’s power is supervisory rather than judicial: it governs the institutions and binds those who come to it, but it does not sit inside the courtroom the way the Malaysian Council does. And the UAE’s Shariah standard is AAOIFI, adopted as the minimum, where Malaysia’s is its own. For a structure that spans both jurisdictions, the consequence is a conflict-of-laws point that should be named rather than assumed away: the two systems have different apex bodies, a different binding reach, and a different standard source, so a structure that is Shariah-compliant under the Malaysian Council is not automatically compliant under the UAE Authority, and the reverse holds too.
The discipline the comparison teaches is the one the source-gating rule already requires. A claim that the Malaysian and UAE positions align, or diverge, on any specific Shariah question is a comparative claim, and it may be made only against the actual rulings and standards of each body, read for the question at hand, not inferred from the general similarity of the two systems. This article establishes the architecture and the binding-reach divergence; it does not, and on the sources used here could not, resolve how the two bodies would treat any particular contract, which requires each body’s output to be read for that contract.
What is settled, at the tiers stated, is the architecture and the binding-reach divergence. The UAE Higher Shariah Authority is a statutory apex body whose rulings bind the regulated (Federal Decree-Law No. 6 of 2025, Article 24). The Malaysian Shariah Advisory Council is a statutory apex body whose rulings bind the institutions and, additionally, the courts and arbitrators (Central Bank of Malaysia Act 2009, sections 56 and 57, upheld by the Federal Court in 2019). Both operate an institution-level committee beneath them.
What is open is the Malaysian side’s sourcing and the standards comparison. The Malaysian statutory text, though quoted across multiple secondary sources including the reported judgment, has not been checked against the official register, which was not reachable; the Islamic Financial Services Act 2013 provisions on the Shariah Committee rest on secondary sources; and the characterisation of Malaysia’s standards as internally generated rather than AAOIFI-adopted is likewise secondary. Each should be confirmed against the primary instrument before reliance.
What is moving is chiefly on the UAE side. The Higher Shariah Authority framework in its current form is new, dating from the 2025 decree-law, while the Malaysian Council framework has been stable since 2009. The comparison should be re-run against the Malaysian primary instruments once loaded, and updated if the UAE framework’s implementing detail develops. This analysis rests, on the UAE side, on Federal Decree-Law No. 6 of 2025 as it stands on the Central Bank’s live rulebook and in force on the date of this article, and on the Malaysian side on the Central Bank of Malaysia Act 2009 as quoted across secondary sources; where the position turns on the Malaysian register, on the Islamic Financial Services Act 2013, or on either body’s treatment of a specific contract, those instruments govern and must be read for the question.
For your facts, in confidence, put the question to the firm.
The bench stands behind it