The Overall View Of Islamic Arbitration

Islamic Arbitration

A Few Works That You Need To Know About Islamic Arbitration

The private nature of international commercial arbitration enables parties from a variety of different countries to resolve their disputes on their own terms by selecting arbitrators and alternative dispute resolution techniques that they believe are appropriate in their particular circumstances. Recent years have seen a controversy about the origins of arbitration, with some arguing that the practice dates all the way back to Greek mythology and others identifying instances of inter-state arbitration during Europe’s Middle Ages. Arbitration has been practiced in the Middle East since the spread of Islam, and its theological and cultural origins date all the way back to that time period.

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According to historical sources, the Prophet Muhammad popularized many of these arbitration processes when he called for arbitration as a means of settling disputes regarding assets and chattels, among other things. Arbitration is referred to in Arabic as tahkim, which is derived from the verbal noun hakkama, which literally translates as “agreement.” Hakkama literally translates as “a man’s turning away from wrongdoing,” emphasizing that arbitration has an ethical and moral component from a linguistic standpoint. In case of Islamic Arbitration this works fine.

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International business arbitration dates all the way back to the nineteenth and twentieth centuries, when increased international commerce necessitated the formation of a globally recognized and enforced body of law to handle future conflicts. The majority of international arbitration rules, treaties, and conventions date from the twentieth century including the 1958 New York Convention on International Commercial Arbitration and the United Nations Commission on International Trade Law’s Arbitration Rules and were ratified by the United Nations General Assembly in 1945.

Islamic Arbitration

The Understanding of the Law

It has not been able to conduct a comprehensive study of the role of Islamic law in current international business arbitration. According to historical records and official policy, authorities have expressly barred considering the role of Islamic law in dispute settlement. Lord Asquith argued in Petroleum Development (Trucial Coast) Ltd. v. Sheikh of Abu Dhabi (1952) that English law should prevail over Abu Dhabi law and that it would be “fanciful to suggest that any settled body of legal principles applicable to the construction of modern commercial instruments” exists in such a “very primitive region.” In Ruler of Qatar v. International Marine Oil Company Ltd (1953), the arbitrator ruled, “I have no reason to assume that Islam is not severely followed.”

Even in the modern day, it is banned to recognize Islamic law within the framework of international business law. Conventions such as Article 78 of the United Nations Convention on Contracts for the International Sale of Goods require the party who has been injured to pay interest to compensate the party who has been harmed by late payment of a contract. Due to Islamic law’s ban on interest, generally referred to as riba, Article 78 does not offer a remedy for many Muslim majority nations that are subject to Islamic law, nor does it allow such countries to “opt out.” The adoption of a “interest” criteria was received with intense opposition by Muslim officials during the 1980 Vienna Diplomatic Conference, with some arguing that such a requirement should be deleted outright. In the case that this was not possible, it was advised that nations that did not charge interest be permitted to make a reservation against the provision. This was declined. Regrettably, these plans for a reservation system tailored to Muslim nations did not materialize in the way intended.


Islamic academics such as Wael Hallaq claim that a series of historical and political events, including the entrance of colonialism and the breakup of the Ottoman Empire, all contributed to the extinction of Islamic law and law in general. Numerous causes contribute to this, including the demise of Islamic financial institutions, the introduction of modern legal procedures as a result of colonialism, and the effect of international commerce, civil and criminal law on national legal systems.

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