International Arbitration and Shari’a Law: Context, Scope, and Intersections

Abstract

Recent decades have witnessed an increase in selecting international arbitration as an alternative method of resolving disputes. However, its acceptance and the interpretation of arbitration agreements have been notably influenced by Shari'a, as it is the primary source of law and public policy in many countries in the Islamic world. The growth in business relations between international companies and the Islamic world, mainly in the Middle East, in addition to the expansion of Islamic finance, stress the importance of understanding the Shari'a attitude towards international arbitration. This article seeks to examine the extent to which international arbitration is compatible with arbitration according to Shari'a law. Special attention will be paid to the arbitration regulations in Saudi Arabia as a country largely influenced by Islamic law. The principle argument of this article is that Islam has recognized arbitration as an alternative system for resolving disputes. Although the views of some Islamic jurisprudence schools are inconsistent with the practice of international arbitration, compatible views generally are found within other Islamic jurisprudence schools, and Muslims are permitted to follow it.