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Sample Essay on Arbitration, Conciliation, and the Islamic Legal Tradition in Saudi Arabia

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Sample Essay on Arbitration, Conciliation, and the Islamic Legal Tradition in Saudi Arabia




           Arbitration is a process by which a dispute is presented, by concord of the parties, to a single or multiple arbitrators who make the obligatory resolution on the disagreement. When one chooses the arbitration, the parties decide on a clandestine dispute resolution modus operandi, rather than going to court. It is guided by a number of principles, which include consensual, chooses the arbitrator(s), and is unbiased. In addition, arbitration is a secretive procedure.[1]


            Arbitration is habitually used for settling of commercial disagreements, mostly in the perspective of global commercial connections. In some countries, such as United States, the arbitration process is used to settle matters like consumer and service; here it is conducted according to the contract concord.[2] Arbitration may be either intentional or obligatory but in obligatory, it originates from a statue that is voluntarily formed from the contract, where the parties involved  accepts to cling onto every existing  and future disagreement to arbitration with absolute lack of knowledge on what kind of dispute will arise. This can be either binding or unbinding. The overall arbitration process involves the resolution of disputes by introducing a third person independent from the matter in contention. The arbitrator’s decision is legally binding and the other parties are expected to follow the final decision. However, there are limitations that govern the enforceability of the arbitration awards.[3]

              The word conciliation is defined as the substitute disagreement resolution procedure, whereby the parties in the dispute employ a conciliator, whose role is to meet both parties secretly in attempt to solve the problem. The conciliation differ from the arbitration since in the conciliation procedure, in itself and of itself, does not have lawful reputation, but the conciliator generally has no mandate to seek facts or array witnesses, typically writes no verdict, and formulates no award.[4]

           The Relationship between Saudi Judicial System and Arbitration Procedures

The law and regulations used in Saudi Arabia is founded on Sharia, Islamic regulation resultant from Qu’ran and Sunnah as referred to by Muhammad the Islamic prophet’s traditions. The sources of Sharia moreover comprise Islamic scholarly accord developed after the death of Muhammad. The interpretation of this judicial system in Saudi Arabia is greatly affected by the texts of medieval, Hanbali Islamic jurisprudence school.[5] Inimitably, within the Muslim regions Sharia erstwhile accepted by the Saudi Arabia within an uncodified structure. This system and the absence of the court guide, has resulted to an ambiguity within the scope and the content of the Saudi Arabia’s laws. In 2010, the Saudi Arabia government announced her intent to codify the Sharia, which remains unimplemented hitherto. The Sharia got a boost of supplementation following the royal decree, which cover the modern issues including scholarly property and the corporate law. However, Sharia remains the prime source of the law, particularly in areas like the family; the criminal acts; the commercial, and the contract law. Here Qur’an and Sunnah are confirmed to be the national constitution. Sectors like the energy and the land law the widespread proprietarily privileges of the entire Saudi state as well as the Saudi Arabia royal family compose a very important feature.

                  The founder of Saudi Arabia kingdom in 1932, King Abdul Aziz, is the creator of the current Arabia court system. It is believed that this system was introduced between the years 1927 and 1960. This encompasses the general and the summary Sharia courts, together with a number of managerial tribunals as to handle the disagreements and disputes on particular contemporary regulations.[6] The Saudi Arabian courts scrutinize hardly any formalities, this in effect has affected the state’s first scandalous procedure policy, which was issued in the year 2001, and currently pathetically ignored. The verdicts are issued with one judge and without adjudicators. In 2007, the King Abdullah initiated various important judicial restructurings, fortunately are not yet implemented fully. The Saudi Arabian criminal punishments laws include and are not limited to stoning, the lashing, the public beheading, and the amputation and the white color criminal acts.[7] The Saudi country uses secrete police force besides the regular police- Mabahith and Mutawa that is religious. The second principle enforces an Islamic moral and social norms, which has been seriously criticized by human rights western based organizations, among them is amnesty international human rights watch.

 The international human rights organization is tasked with the role to eradicate tutorial actions, promoting criminal justice and the provisions of the freedom of religious affiliations. Other offences leading to death sentence have been criticized beyond measure, some reports comprises of divergent views on the ability of the Saudi Arabia judicial system promoting the application of the international rules and guidelines.

             The Muslim juries and scholars in between the 7th and 10th centuries gradually developed the current Islamic law popularly known as Sharia, which is the primary foundation of the legal frameworks and principles in the contemporary Saudi Arabia country.[8] Arbitration may be either intentional or obligatory but in obligatory it originate from a statue that is voluntarily formed from the contract, where the parties involved  accepts to cling onto every existing  and future disagreement  to arbitration with absolute lack of knowledge on what kind of dispute will arise. As from the time of caliphate Abbasid in the eighth century, the developing Sharia was incorporated as the root of law within the metropolitans of Muslim’s world; among such are Muslim Arabian peninsula, eclipsing surf also known as pre Islamic traditional laws which dominated the rural areas for a while. It remained as the law until early twentieth century.[9]

Arbitration and Saudi Arabia “ARAMCO”

Saudi Arabia and Arabian American Oil Company, (ARAMCO), was arbitration linking to the elucidation of a concession agreement initiated in the year 1933, May 29th between the government of the Saudi Arabian state and standard oil company of California-state in America. The agreement was consequently allotted to California Arabia standard oil company, which afterward renamed it as Arabian American Oil Company for the expediency of one hundred and eighteen (118) known as ‘Aramco’. In 1954, January 20th the Saudi Arabian government and Mr. A. S. Onassis and his company winded up the concord, and the Saudi Arabian maritime tankers limited for the expediency known as the ‘Satco’, following the act four (IV) and fifteen (XV), in which the country was issued with a thirty year (30 years) ‘priority rights’ as was stated, in line with the transportation of Saudi Arabian oil to American. In short, the current dispute was the conflict between those provisions and the agreement of Aramco, which mandated the latter to an exclusive right of transporting the oil, which it had extorted from its dispensation area in Saudi Arabia.[10]

The Arbitration Regulation of 1983

In terms of enforcing the various arbitration clauses, the legal frameworks provides for two forms of arbitration agreements used in determining the nature and solutions to the disputes. In addition, any agreements made during the process of arbitration are relevant in the performance of prior contracts by the parties. However, the enforceability of the terms is valid in terms of the arbitration clause supporting the implementation of the contracts. The ability of the arbitration clauses to become binding is dependent on the requirement of the arbitration instrument commonly known as wathiqat al-tahktm.[11] The document provides the authority of validating the requirements from the different dispute resolutions. The instrument usually comprises of the detailed information of the disputing parties and the acceptance of the parties for the process of arbitration. The instrument should also be signed by the parties to be arbitrated.

 In some situations, it is usually unclear whether the individuals having approved the beginning of the process, they would be willing to accept the verdict provided by the arbitrators. For instance, some parties have been known not to cooperate to the terms and decisions made by the process. This could cause the occurrence of further disputes. It has been noted that the recommendations emanating from the various regulations and rules are dependent on the dispute resolution process. This relates to the nature of the arbitration clauses supporting the performance of the involved contracts. Other articles have also cited time limits and other aspects such as the provision of awards as key provision in the acceptance of the arbitration instruments by the parties involved.

Most of rules and regulations have also been helpful in ascertaining the role of the arbitration instrument. For instance, they differentiate the convention made for future dispute arbitration and the selection of third party arbitrators. It specifies that the agreement made between the parties involved in disputes would only be sufficient by the clear declaration and statement of the arbitrator’s qualifications and experience.[12] After the conclusions are made, the agreements from the arbitrators might have a legal effect in future disputes.

The contradictions emerging from the rules may indicate the  role of the arbitration panel to offer a better judgment of the parties are not concerned in filing their claims as well as providing appropriate documentation from their cases. Even though, some of the parties are not cooperative to the proceedings in terms of providing their statements. This makes it controversial to make judgment without reliable information and documentations. The contradictions of rules have caused major problems in the Western countries relating to the ability to enforce the specific arbitration clauses.[13] This implies the nature of Sharia law in providing valid report and suggestions for the future arbitration cases.

In addition, the conclusion of the contradictions of rules is made safe by delaying the arbitration proceedings. The delay gives the parties enough time to obtain information as well as seeking approval from the judicial agencies with fifteen days of the arbitral decision. However, the rules do not provide the specific circumstances that could make the information for the arbitration instruments inadmissible.[14] For instance, the regulations indicate that the arbitrators should belong to the Muslim community. However, it must not be Saudi nationals. In most situations, the arbitrators are aware of the rules and provisions of arbitration specified in the Sharia law. The arbitrators are usually given the power to handle all issues arising from the disputes and thus, they have the ability to coordinate the entire proceedings. Within five days of the process, the parties involved should pay the arbitration fees subject to approval under the arbitration instruments.[15]

 The fees paid and then paid to the third party arbitrators after completing the process of arbitration. This aims at ensuring that the arbitrators concentrate and focus on providing amicable solutions to the problems facing the parties. The Saudi substantive law is keen on reviewing the payments of the arbitrator’s fees in order to minimize any cases of fraud and unscrupulous actions. One of the commentators argues that the Saudi domestic regulations are different from the international legal frameworks in terms of arbitration process. This is also implied in the Sharia law and other related statutes.[16]

Enforceability of the Award

Based on the nature of the rules and regulations in Saudi Arabia, the arbitrators are usually keen to fulfill the requirements of the Sharia and statutes provisions. Since, Sharia law constitutes the main body of laws governing the application of rules of resolving disputes among individuals. However, the concept of public policy is a little different from the concept of applying regulations and rules. In case of any contravention of the public policy, the government has the power to intervene in the arbitration proceedings. In terms of the jurisdiction of the rules, any issues related to the disputes should be brought up with the arbitration panel. Some of issues include; criminal offenses and claims of forgery among others. The issues are useful in the making of final decision by the panel or any other relevant author. It would also amount to an objection of the enforcing of the awards provided by the panel through a court process in Saudi Arabia.[17]

  In spite of the possibility of objection to the awards, the involved authorities are still relevant in determining the applicability of the final decision from the arbitrators. Based on Sharia law, legal application is known as literal application. This means that the legal provisions are all subject to the review of the relevant authorities including the government authorities. There are still no clear indications on when the review of the decision is allowable to the authorities in relation to the original jurisdiction. Any grieved parties from the arbitrator’s decision could be made through the ministry of commerce. The process is based on the limitations of the constitutional privileges and provisions to deny the implementation of the arbitral award.[18] Such situations usually involve biased arbitrators who do not support fair hearing to the various parties. In addition, there are might reported cases of contravening the arbitration procedures as well as the violation of the provisions of public policy.

Arbitration and Tankim

Based on the previous discussion, there are various challenges faced during process of arbitration. The challenges include the ambiguity of the legal frameworks needed to ensure the enforceability of the arbitral awards and clauses. The law stating the nature and substance of the disputes is also not clear. The difference in the judicial understanding of the process of arbitration between the European countries and Islamic nations is different. The differences in the interpretation are commonly known as tahkim. The different sections of the paper will illustrate whom the arbitration clauses would become legally binding. It also outlines the selection of the arbitrators and the western understanding of the process of arbitrations. The understanding is useful in the resolution of many future business disputes in the international scene. It would also indicate the major reasons for the challenges in applying the arbitration clauses in the Muslim nations. Reference will be made first to the early history of Islam and the primary sources of the Shari’a.


Arbitration in the Western Legal Tradition

            Arbitration in the West has always been a parallel system of justice operating outside of the existing court system and its rules of substantive and procedural law. To fill this equitable role effectively, arbitration had to be insulated from undue interference by the courts, even where court cooperation was needed to insure enforcement of arbitral decisions. Roman law insulated arbitration from court interference by confining it to the realm of contract law and prohibiting court review in most cases.[19] Late medieval jurists recognized that minimal court review of awards was necessary and they severely restricted its scope. Judges were not permitted to overturn an arbitrator’s decision merely because it was contrary to law (injusta) but only if it was contrary to equity (iniqua), that is, unacceptable to an honest, reasonable person, such that it would be contrary to good faith to accept it.[20] Although the ancient distinctions between law and equity are no longer of much practical significance, there has been a continuing need for  dispute resolution  procedures that are more flexible and  more closely attuned to business needs than those applied by national courts.

                 National legislation in countries influenced directly or indirectly by Roman law takes a variety of approaches in formulating rules that allow arbitration the flexibility to fulfill this wide range of roles while still permitting access to the courts for enforcement purposes. Civil law countries tend to maintain a distinction between two types of arbitration, allowing the parties to authorize their arbitrator to decide a dispute either in strict law, in an equitable fashion.[21] Different standards of review may apply depending on which type of arbitration is chosen. In common law countries, no such distinction is explicitly recognized. However, courts will generally afford great deference to arbitral decisions, recognizing at least tacitly that businesspersons do not expect arbitrators to decide disputes in exactly the same way judges do. In the United States, for example: arbitrators pay the greatest attention to the legal arguments developed before them, but they do not hesitate to depart from strict law if justice requires this.[22]

               In so doing they believe they are fulfilling the will of the parties: businessmen prefer the way in which facts are interpreted by arbitrators to the uncertainty which, in their opinion, is inherent in the methods of interpretation  used by courts or juries who are ignorant of the problems and conventions of trade. When arbitration has been fettered by rules making it too similar to litigation, frequently an institutional change has taken place. In Italy, for example, “free” or “informal” arbitration (arbitrato liberale) has largely replaced arbitration in strict law which is governed by provisions of the civil law.[23]

In England, the arbitration Act of 197967 severely limits the authority formerly possessed by the courts to review arbitration awards on their legal merits, at least where the dispute is of an international character. The Act was a response to the reluctance of many businesspersons to choose England or English law for arbitration of complex international disputes.[24] Judicial deference to the parties’ choice of strict law or equity and deference to the arbitrator’s decision chosen by them, or at least according to the terms of their agreement, are thus hallmarks of arbitration in Western countries. A third aspect of arbitration, namely, the enforceability of agreements to submit future disputes regarding a specific contract to arbitration rather than simply specific existing disputes has also gained wide acceptance since the nineteenth century. It is these aspects of arbitration that allow the flexibility necessary to assure sufficient sensitivity to the varying needs of business and the expectations of the parties, while still insuring that arbitration can result in firm and swift decisions. Arbitration thus resembles both conciliation and litigation, while not being identical to either one.

Tahkim in the Quran and Sunna

The main reason why Islamic law complies with Alternate Dispute Resolution procedures such as is involved in arbitration is the sanctity associated with the aspects of sulh, tahkim and muhtasib. Compliance with these laws is considered divine obligation since they all have a Quranic origin. Since the Quran demands unquestionable compliance to Sharia, it follows that to all Muslims, just the knowledge that the aspects of Tahkim as well as Suhl, which characterize the ADR process are divine obligations. The reward for following such teaching is mercy and blessing according to the Quran[25]. Both the Quran and the Sunna outline measures for alternate dispute resolution.

The concept of tahkim itself is not Koranic in origin. It is a pre-Islamic phenomenon authorized by Islam on conditions of just and sincere operation. However, some aspects such as the guardianship of orphaned children are precluded from the possibility of engaging in tahkim due to their sensitivity. This was left to the law to deal with depending on the jurisdiction[26]. Initially, the hakams who carry out tahkim were a threat to Muhammad since they rivaled the exposition of the Sunna, and they were also laying claim to religious authority for themselves. Since Muhammad was considered the sole recipient of directions from Allah, it was his role to unify Muslims hence, he also offered divine intervention.

Although Muhammad himself did not intend to develop a conflict resolution system, he needed to control the system. The Quran gives the importance of placing the responsibility of a hakam upon the Prophet Muhammad. The Quran further stresses on the importance of precluding any other laws except that given to Muhammad by direct injunction. There was a potentially large margin of error with regards to the interpretation of divinely inspired law by human beings. Consequently, it would be sinful for a Muslim to accept judgment when he/ she believed that the judgment was contrary to the law of God[27].

After the pre-Islamic period and the authorization of Tahkim by Islam, it did not lose its pre-Islamic characteristics but retained most of them. For instance, tahkim was originally voluntary, with the disputing parties having to agree on the most suitable arbitrator. This aspect was carried on after the authorization by Islam, giving rise to a culture acceptable to both the Quran and the Sunna. A common example of tahkim carried out in historic Islamic traditions was during the caliphate dispute where both parties believed that the Quran was behind them. Arbitrators had to be chosen to resolve the conflict. This succeeded after the selection of arbitrators supported by both parties.[28]

According to a letter written by Umar bin Khattab (the second Islam Caliph), all forms of reconciliation and compromise are acceptable amongst Muslims except those that make anything haram (unlawful) into halal (lawful) and/ or halal into haram. This letter addressed to Musa Al Ashri after his appointment as qadi goes hand in hand with Quranic readings, which encourage conciliatory measures. In the Quran, it is acceptable to use any methods to bring together quarrelling brothers. It is further stated that one who invents new information in order to solve a dispute between brothers is not a liar.[29] It can be said therefore that the aspect of Tahkim is allowable in the Quran. However, any arbitrator must be a man and must have no interest in the matters of conflict.

Apart from the Quran, Tahkim is also allowed by the other three sources of Islamic law i.e. The Sunna, idjma and Qiyas. All these come into consensus about the importance of arbitration in the Sharia. In addition to this, it is recorded to have been used by the prophet’s companions in solving disputes. It is therefore an unquestionable aspect of the Sharia. Before the invent of Islam, resorting to arbitration for dispute settlement was optional and the terms were not legally binding. However, this has been changed particularly amongst Islam communities since it is expected by the Sharia law that disputes be solved amicably.[30]

In the case of disputes between a man and his wife, the idea of Tahkim is clearly outlined on how it should be carried out. The Quran verse reads:

“If you fear a breach between them twain (the man and his wife), appoint (two) arbitrators, one from his family and the other from hers; if they both wish for peace, Allah will cause their reconciliation. Indeed Allah is Ever All Knower, Well Acquainted with all things.”[31]


Although the Quran lays down general principles for Tahkim, it is the responsibility of jurists to interpret and outline the process of carrying it out. Under the Islamic law, the main features of arbitration (Tahkim) include: freedom to include any clause in the arbitration terms provided it does not go against the law of Allah. The arbiters must possess the same qualification as a judge, a non-Islamic legal system may be used to address issues of tahkim as long as it does not go against the sources of Islam law, which are the Quran and the Sunna, an arbitral award, may be enforced only if it respects the demands of the Sharia.[32] The judge is however not authorized to make any reviews on the merits of either the dispute itself or the arbitrators involved.

With regards to Tahkim, Sunna gives snippets of direction on how to handle various issues through arbitration. The Sunna directs that whoever intercedes may be rewarded bountifully. This is also in line with verse 85 of the Surat Al-Nissa states that:

“Whosoever intercedes for a good course will have the reward thereof and whosoever intercedes for a good course will have a share in its burden.”

The Quran further lauds all forms of conflict resolution as long as they do not go contrary to Islamic teachings especially those in which the Sharia law is based. The Quran calls for sincerity, fairness and arbitrator qualification in all acts of tahkim.

Tahkim in the Fully Developed Islamic Legal System

In the fully developed Islamic Legal System, the concept of tahkim is taken with utmost consideration of underlying sharia laws and the teachings of the various Islamic Schools. The alternate dispute resolution strategies in Islamic law are considered religious due to their origin from the Quran and the Sunna.

There are two main beliefs surrounding the concept of tahkim. The first belief is that tahkim is similar to conciliation, is neither binding nor final and therefore has no nature of a jurisdiction. This proposition is supported by the verse on the breach of agreement between husband and wife in the Quran. On the other hand, other schools of thought believe that tahkim is jurisdictional and therefore binding and final. This belief is supported by the following verse from the Quran:

“Verily! Allâh commands that you should render back the trusts to those, to whom they are due; and that when you judge between men, you judge with justice.”[33]


According to this verse, calls for justice on the part of arbitrators hence the use in supporting the proposition that tahkim is final and binding.

Islamic scholars formulated rules guiding the enforcement of Tahkim in the years succeeding the pre-Islamic years. The roles of tahkim are set based on the doctrines of all the schools of Islamic law as recognized by both Sunni and Quran. Any doctrine of a school cannot be thwarted or considered sinful by the other schools of thought. In most Muslim countries, the Sharia law is considered as a whole, while the judges apply legislative principles from the diverse schools of thought.[34]

It is therefore imperative that the implementation of tahkim be carried out in consideration of all the four schools of Islamic law. In addition to this, each of the four schools places emphasis on a different aspect of law. Consequently, no enforcement can be carried out successfully based on a partial consideration of the schools of thought.

Despite the importance of Tahkim, it is rarely discussed in most of the medieval Sharia laws, and1when it is discussed, and then the space allocation is reduced to minimal. Although there is frequent comparison between tahkim and contract law, it is generally not classified as part of the law of contract. However, in any comparison or discussion, the scholars are obliged not to modify or compromise on the law as guided by the Quran.

The decisions of a hakam must be in line with the decisions that could have been made by the qadi. This explains the need for the hakam to possess the same qualifications as a qadi. The Hakam’s role changes from that of a conciliator under the law of contract to a judge compelled to act in enforcement of the entire substantive sharia law or part of it, in consideration of evidence and following a specific procedure.[35]

Some of the qualifications to be possessed by a hakam include: He must be a Muslim, must be knowledgeable in Sharia jurisprudence and must be male. The importance of the first two qualifications is undeniable since tahkim is based on Islam law guided by the Quran and the Sunna and only one who is knowledgeable in the Sharia law can effectively enforce them. The resultant procedure of a tahkim therefore resembles a contemporary Sharia law. These rules however, apply only in case all the disputing parties are Muslims; non Muslims living within a Muslim Jurisdiction are not obliged to work with Muslim hakams.

The procedure begins with the appointment of an arbitrator by the conflicting parties. It is clearly stated that future disputes are not to be arbitrated. The appointment of the hakam is bound by regulations guiding the process of tahkim such as the ability of either party to rebuke the appointment. This aspect of tahkim is supported by the schools of Islamic Law, which include Shaffi, Hanafi, Hanbali, and Maliki schools. However, not all the four schools recognize any power held by a third party with respect to the appointment of a hakam in the Tahkim process such as a qadi. Any appointment of a hakam is irrevocable by any statutes whatsoever. However, this issue of irrevocability of a hakam’s appointment can be resolved through ratification by a qadi.[36]

It is therefore essential to understand that the replacement of a hakam either removed or dead, can only be performed under mutual agreement of the conflicting parties. On the other hand, in case a hakam’s appointment has been ratified by a qadi, the hakam can become the qadi’s representative and serve under the guidance of the supreme executive. This is the only rule that is universal between the four schools of Islamic law.

This provides a way for the qadi to appoint and make use of a hakam who is not originally appointed by the disputing parties. However, it does not provide a way for the court to appoint a hakam who is not approved by the disputing parties. In addition to this, tahkim is not compulsory as a prerequisite to the appointment of a hakam. It can therefore be said that hakam is an essential defining concept of tahkim.[37]

The requirement of a signed agreement between both disputing parties at the time of the dispute makes it difficult to enforce an agreement to arbitrate in the future event of a dispute.

In the inception of tahkim as part of Islamic law, it was intended to begin with a conciliatory attempt in the form of a Sulh. This act of conciliation is based on generosity and forgiveness and was the mediation process of choice during the pre-Islamic times. The hakam of choice should have no interest in the events occurring prior to the dispute. The purpose of the Sulh in initiating the process of tahkim is to provide a conducive environment for amicable dispute resolution.

The aim of developing Tahkim regulations was to avoid the occurrence of judgment since law breaking and subsequent court procedures were considered shameful in themselves hence it was desired that the disputing parties avoid the shame at all costs. The possibility of conciliation is therefore required to remain open at all times in the tahkim process.

According to Islam, Sharia law is of utmost importance and every judgment based on it is enforceable. This brings about a conflict of beliefs between the western arbitration procedures and the Muslim tahkim. The belief in the religious nature of law brings to light the aspects of Islamic law, which include the limitation of human judgments in comparison to divine standards, stating that although it might put an end to injustice, it cannot and does not change how things stand.

Importance of distinction between Arbitration and Tahkim

Some of the clear differences between arbitration in the western sense of it and tahkim in Islamic law include: in arbitration, the agreement must be written while in Tahkim, oral agreements are acceptable although it is preferred that agreements be in writing. Secondly, arbitration can be carried out in reference to both current and future disputes while tahkim cannot be carried out in line with future disputes.[38]

Apart from these, the arbitrators’ decisions are binding while decisions by a hakam are revocable until the time that the arbitrator has been given his award. In terms of arbitrator qualifications, parties in arbitration are free to appoint anyone as an arbitrator while the hakam, must possess the same qualifications as a qadi. In order for effectiveness of any of these processes it is necessary to clearly distinguish between the two and understand under which compulsion the mediation process is occurring.

In situations where the public interest with regards to arbitration is inconsistent with the sources of the Sharia law, it may be difficult to set boundaries on the limits of either of the two. This explains the importance of the consensus between the Islamic law and political laws regarding arbitration. It is important that the varying points of view between political arbitration laws and tahkim be taken into consideration prior to reaching a point of consensus to ensure satisfaction of both the country’s political laws and the sharia laws. Consultation is key in this process.

Following the dynamics involved in this process before coming into agreement concerning the application of the law, the process is significantly slow. Arbitration threatens this process since it may result in an uncontrolled introduction of new business traditions and legal systems. These may eventually lead to resentment and confusion. Arbitration is therefore suspect as well as dangerous from the point of view of Islamic Law. This is because the government’s designed pace of change with regards to law is threatened by the possibility of arbitration.[39]

On the other hand, arbitration poses some advantages in its wake as well as disadvantages.

For instance, arbitration has the ability to improve the process of justice administration. This is through faster as well as cheaper service delivery. This is because it is more likely to be sought by western educated Muslims under the guidance of similarly characterized arbitrators. Consequently, the intensities involved in consultations between the Sharia jurisdictions and the political jurisdictions prior to decision making by hakams will be eliminated.

In addition to this, it is also likely that due to the lack of judicial review standards, unpredictability may be associated with arbitration. Other groups of people that may prefer arbitration over tahkim are business people and others who may like to manipulate systems to achieve their desired end. However, the main limitation of the process with regards to time issues is that although speedy, it may end up leading to wastage of time. This particularly rises when the arbitrator’s award has to be reviewed by a magistrate.[40]

It is difficult to predict whether a magistrate may rule that there has been a violation of laws arising from the Quran or Sunna and thereby reversing the award. In such a case, the process of arbitration occurs in vain. It is therefore clearly necessary that prior to engaging in any mediation process, the parties in dispute should clearly distinguish between arbitration and tahkim and make informed decisions regarding the process of choice.

Amiable Composition and Suhl

The concept of amiable composition allows the arbitrator to make an award based on his own sense of justice and equity. Application of this concept is most relevant where more than one arbitrator is present. The implementation of amicable composition may result in awards that are much easier in enforcement compared to the contemporary arbitration methods. For instance, this aspect as been described to be analogous to the conciliatory procedure for the settlement of marital disputes through the use of two hakams,[41] one affiliated to each of the disputing sides as described in the Quran.[42]

There is also a similar procedure described by the Hanafi School of Islamic law whereby each party appoints an agent (wakil) who is empowered to settle the dispute. The application of these procedures ensures that there is elimination of various grounds for disputing awards by the arbitrators. The application of the process of amicable composition goes hand in hand with the ideal of sulh, i.e. compensation, an undeniably Islamic institution.

The use of Sulh as a dispute resolution method was supported by the Prophet Muhammad himself. This was the traditional method of dispute resolution, prior to the authorization of tahkim by Islam laws. Its purpose was to resolve dispute without the necessity of judgment. However, it is considered inappropriate particularly in cases where one party has breached a contracted, has not acted in good faith or there is no business relationship to maintain. In such cases, judgment is inevitable. This may also be the case where the two parties are too far apart and their positions cannot be shifted to common ground through arbitration. Although it may be difficult to decide whether the arbitrators should encourage compromise or allow a chance for judgment, it is important to note that Sulh is the least controversial Islamic dispute resolution strategy.[43]


The concept of Tahkim as used in Saudi Arabia in accordance with Islamic laws is significantly different from the western arbitration process even though it is generally taken to mean the same as arbitration. However, under the Sharia law, Tahkim can only be carried out where there is a possibility of Sulh (compensation).The Sharia law provides explicitly, the conditions under which tahkim is to be practiced and the qualifications expected to be possessed by the hakams. These expected qualifications place potential hakams at a position similar to the qadis in terms of Sharia law knowledge.

The western concept of arbitration differs significantly from the aspect of Tahkim. Consequently, it is necessary to distinguish between tahkim and arbitration since both concepts are characterized by different ideas. For instance, although fast and cheap, arbitration may cost one more in the case an award by an arbitrator is revoked due to non-compliance with the Quran’s directions or the Sunna’s.







Aseel Al Ramahi. Sulh: A Crucial Part of Islamic Arbitration. Working Paper, Islamic Law and Law Of The Muslim World Research Paper Series at New York Law School, Paper No. 08 – 45. 1-23 (2011). 

Baamir, Abdulrahman Yahya. Shari’a Law in Commercial and Banking Arbitration. 23- 187 (2010). 

George, Sayen. Arbitration, Conciliation and the Islamic Legal Tradition in Saudi Arabia. 903-956 (2003). 

Hampton, Whitney. Foreigners Beware?: Exploring The Difference Between Saudi Arabian And The Western International Commercial Arbitration Process. Jdres 431 – 446 (2011) 

Margolith, D. Omar’s Instructions to the Qadi. Jras. (1910).

Vogel, Frank E. Islamic Law and Legal System: Studies of Saudi Arabia. 81 (1999).

Zeyad Alqurashi, Arbitration under the Islamic Sharia 3, 


[1] Aseel Al Ramahi, Sulh: A Crucial Part of Islamic Arbitration 1-23 (Islamic Law and Law Of The Muslim World Research Paper Series at New York Law School, Paper No. 08 – 45, 2011), available at Confidentiality

[2] Id. at 3



[4] ASEEL, Supra note 1, at 12 (highlights some differences between reconciliation and arbitration)

[5] WHITNEY, Supra note 3, at 2.

[6] BAAMIR ABDULRAHMAN YAHYA, SHARI’A LAW IN COMMERCIAL AND BANKING ARBITRATION 39 (2010), (Describing the history of arbitration in Islam)

[7] Id. at 61

[8] ASEEL, Supra note 1, at 12

[9] WHITNEY, Supra note 3, at 435

[10] WHITNEY, Supra note 3, at 432 (This describes the entire case of ARAMCO and highlights the role of arbitration in dispute resolution as well as the dynamics involved in the specific case.

[11] BAAMIR, Supra note 6, at 26.

[12] ASEEL, Supra note 1, at 6

[13] BAAMIR, Supra note 6, at 41

[14] ASEEL, Supra note 1, at 16

[15] Id. at 4


[17] Id. at 86.

[18] Id. at 74

[19] Id. at 60

[20] ASEEL, Supra note 1, at 14

[21] WHITNEY, Supra note 3, at 439

[22] ASEEL, Supra note 1, at 19

[23] Id. at 17

[24] BAAMIR, Supra note 6 at 64



[26] Id. at 7

[27] Id. at 5

[28] Id. at 6

[29] Margolith, D. Omar’s Instructions to the Qadi. JRAS. 307, 311-31 (1910).

[30] SYED, Supra note 25, at 1

[31] Quran 4:35

[32] SYED, Supra note 25, at 2

[33] Quran 4:58.



[35] Id. at 921

[36] Id. at 932

[37] Id. at 936



[39] GEORGE, Supra note 34, at 937


[41] This process is described as involving a hakam from each of the twosides i.e one from the husband’s side and the other from the wife’s side

[42] SYED, Supra note 25, at 3

[43] GEORGE, Supra note 34, at 951

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