Strengthening Legal Guarantees for the investment in Halal Sector

Abstract

Abstract
The halal trade has increasingly dominated vast markets worldwide, primarily in response to the needs of Muslim consumers. This widespread expansion—driven by both commerce and industry on one side, and Muslim consumers on the other—has resulted in a thriving market grounded in various technical, religious, and jurisprudential frameworks. However, in the absence of a dedicated legal framework regulating this sector, these foundations often fall short of providing adequate legal guarantees for investment, even though they serve as essential preliminary building blocks for its organization.
This study analyzes the legal systems related to the halal industry—particularly the Malaysian halal standards—to explore the means and mechanisms of conferring legal status upon the halal system and establishing the fundamental guarantees necessary for investment and development in this sector. It further examines the legal framework governing halal products with respect to codification and legislative stability, as well as the mechanisms for resolving investment disputes in the halal sector through judicial and arbitral systems. The research adopts descriptive, analytical, and comparative methodologies.
Findings reveal that the halal sector still lacks appropriate legal regulation, both in terms of codification and dispute resolution mechanisms, as it continues to be viewed primarily as a matter governed by Islamic jurisprudence. Accordingly, the study recommends strengthening the legal role in the halal sector through a comprehensive legislative framework encompassing all its dimensions, followed by detailed regulations and technical standards. It also calls for the establishment of specialized systems for dispute resolution within judicial and arbitral contexts. This is particularly important since law remains the only discipline capable of translating the outcomes of Sharia-based fatwas and scientific laboratory results into a precise, enforceable legal language that instills confidence in all parties involved—investors and consumers alike—and serves as a reliable reference in the event of disputes.