The topic of Sharia Law is a complex one. It is a subject that has been debated over the past 1,600 years and one that to this day evokes many emotions and opinions.
It is a subject that many take very personally as it is linked to their religion, and consequently is perceived as quite controversial. So just how relevant is Islamic Law to the practice of lawyers in general commercial law and in arbitration in particular? This article aims to shed some light on this area.
First we will cover some basic principles.
The Islamic Law of Sharia, actually everything in Islam, derives from the Quran (the holy book) and subsequently the Sunnah, which is basically the Prophet Muhammad's (peace be upon him) faith, his teachings and the way he practiced it. The Quran and the practices of the Prophet together constitute the Islamic faith, Islamic Law, Islamic beliefs and basically what Muslims need to follow.
There are four main schools of Islamic legal thought: the Maliki, Hanafi, Shafi'i and Hanbali. These four schools try to derive an analysis from the Quran and from the Sunnah to draw a conclusion, through jurisprudence, on a lifestyle and issues that were not actually present at the time but need to be resolved. Many caliphs lived during the twelfth and thirteenth centuries (Gregorian calendar) and they tried to develop Islamic jurisprudence to deal with contemporary problems and issues, including arbitration.
The Islamic life (as derived from the Quran, Sunnah and the respective jurisprudence) can be generally divided into four groups of human activities. The first group are called farīḍah, which is something that one has a duty or is obliged to do as part of the religion e.g. fasting for the month of Ramadan.
The second group are not obligatory activities, however it is highly recommended that you do them, e.g. sponsoring an orphan.
The third group of activities consist of those on which the religion remains silent. This is extremely important for the discussion in this article. One of the fundamental tenets of Islam is that if things have not been decided upon then they are permitted. There are many areas in Islam upon which the religion does not decide or is silent, things which do not fall into the category of activities you are obliged to do, or are recommended to do. Consequently, in the life of a Muslim, be it commercial life, private life or religion, there are issues which arise that religion does not decide upon and are therefore up to the individual to practice as they will.
The fourth group of activities consists of those that are strictly forbidden. They are not something you are obliged to do, nor are they recommended, nor is the religion silent on them - they are specifically forbidden. Again this is, in my opinion, an issue of extreme importance to the legal thought process where we always recognise that if something is not forbidden or something is not legislated by law then it is permitted. This is why it is significant that killing and stealing are specifically prohibited.
Moving on from these activities, we look to another four fundamental elements of Islam (that pertain to the human activities mentioned earlier in this article). They are the first things we are taught in Islam and help us to understand why the Islamic religion regulates commercial activities and why a religion such as Islam gets extended to be discussed in arbitration and other commercial activities.
The Islamic religion can essentially be divided into four main categories. The first is beliefs - the concepts that we believe in, in our heart and in our mind. They are kept private to us, such as religious practices, whether it's praying or fasting. The second is behaviour, the third is discipline and finally transactions.
The categories are intertwined i.e. the Islamic religion does not just consist of beliefs - the beliefs are translated into practices and the practices also have a certain behaviour and discipline attached.
Finally 'transactions' refers to how one transacts and deals. There are specific provisions in the Quran, and the Sunnah that tell you how you should act in commercial transactions, including provisions regarding how carefully you have to weigh items before you sell them. It gets into the specific heart of trading and doing business and regulates the transaction not only to your beliefs and your prayer but also to the conduct of business.
With respect to all of the aforementioned sayings and beliefs, Islamic beliefs are probably no different than any other religion. It all basically advocates being honest, charitable, treating others well and being equitable to others. The important thing for our discussion here is that the Islamic religion gets involved in the transactional side of life and does not confine itself to mosques, the house and to the praying carpet. It extends to tell us how we should behave when trading, how we should pay, what is legal and what is illegal.
At this stage, the basic principle which I want to reach and then move on from is this - if it is not expressly prohibited by the Quran, then it is usually permitted. The Quran is a book that we believe was brought to the Prophet Muhammad (peace be upon him) by Jibrīl and which the Prophet then transmitted to the Muslims and which we believe is the direct word of God. To this end, if you are a legal practitioner and you do not find in the wording of the Quran a specific prohibition or a specific clause to limit you from doing something, or annul a particular transaction or to try to avoid particular practices, then the simple conclusion that you can draw is that, "It is OK, as the Quran does not specifically prohibit so it should be acceptable".
Subsequently, the next step is to find out whether the Sunnah (the practice and sayings of the Prophet which constitutes in itself another level of ruling) prohibits it. If it is not stated there then the assumption is that it is acceptable, the practice and the transaction are then approved, deemed valid or can be executed.
Following this you research relevant jurisprudence in relation to the four schools previously mentioned. If none of the schools prohibit or try to put a limitation on the transaction then that transaction is permitted.
However, there is one thing that needs to be addressed here for the sake of this discussion. A lot of the jurisprudence have left things undiscussed when it comes to arbitration. This is because the jurists lived in the thirteen hundreds and arbitration was not developed in the same fashion and to the same level that it is today. I think Islamic society is no different to any other society - arbitration was not developed in many countries, especially not to the level that we recognise it today, therefore their comments and the topic of arbitration discussed only address simple elements, which I have shared with you here, they do not delve into the topic to discuss arbitration in the way we all know and are familiar with in contemporary society..
This raises the questions - when does Islamic law apply to arbitration? Where does Islamic law feature in arbitration? Today, you will find that Islamic law only applies in an arbitration if the parties (and this does happen sometimes) specifically agree a contract which specifically says, for example "I'm going to sell you this grain, and you're going to buy this grain from me, and we'll have an arbitration clause to say I'm only selling you this grain based on an Islamic principle and when we go to arbitration the Islamic principles of Sharia need to apply". Another example is where one might say "I want my transaction with you to be decided through arbitration by reference to Australian law, provided at all times that the arbitrator will take notice and follow the guidelines of the Islamic principles of Sharia". These, in my opinion, are two very different examples and will have very different implications.
In all the Islamic jurisprudence, and in the Quran and Sunnah, it is clear that from day one Islam recognised arbitration. Even before he became a prophet, Prophet Muhammed (peace be upon him) acted as an arbitrator in disputes. The word arbitration and the act of arbitrating between people to settle disputes are mentioned in the Quran and Sunnah.
All four schools are agreed that arbitration is basically welcomed in Islam and that it is applicable to Muslims. There are also a number of cases in Arab history and the Muslim way of life where arbitration was used.
For example, there was a dispute between various tribes which was settled through arbitration, with the Prophet as the arbitrator. The tribes were trying to move the black stone of the Ka'aba and he had to arbitrate how they should carry it and who should have the honour of placing it. There were a number of disputes settled through arbitration during the Prophet's life and during the time of the various caliphates. And all the jurisprudence - in particular the four schools we usually rely on- are agreed that arbitration is something that is welcome, recommended and encouraged. There are certain disputes that must be referred to arbitration, such as family disputes. Before a husband and wife can get divorced for example, there must be an arbitration before they actually go to court. There are again many examples of this throughout history.
However, what is not discussed at length by the schools are the issues that we face today with contemporary arbitration, and the issues that they have discussed but not yet settled. The jurisprudence has not determined these issues to a final conclusion:
• Can a female become an arbitrator or is this prohibited?
• How should an arbitrator practice? As an independent adjudicator, or as counsel or witness for the party who has nominated him?
• Can a non-Muslim become an arbitrator in a Muslim dispute or a dispute between Muslims?
• Can you have witnesses in the room whilst another witness is giving evidence?
• Can a woman give evidence by herself or must she be supported by another person's evidence?
• Should you have witnesses swear an oath?
The schools have talked about and discussed only a few things amongst themselves in different texts. I think that is one of the reasons why there is some confusion on these matters. They have basically said arbitrators should have the same qualification as a judge; if he does not have the same qualification as a judge then he cannot be an arbitrator. Based on this, some drew the conclusion that a female cannot be an arbitrator because there were no female judges at the time of the Prophet (although Caliph Umar, the third Caliph in Islam after the Prophet, actually appointed a female judge). Today, if you look across the various Muslim countries, there is a female judge in every Muslim country with which I am familiar except Saudi Arabia. There are about 72 female judges in Iraq itself and there are 10 female judges in the UAE. Given that there is no specific prohibition against a female judge and that most Muslim countries now have female judges, the position that a woman cannot sit as an arbitrator because there were no female judges at the time of the Prophet seems particularly weak.
Other issues have been discussed and there is some talk in the jurisprudence on whether an arbitrator is an agent for the party who has appointed him. I have been on a tribunal where one of the other arbitrators, who was from an Arab country, tried to act as an agent for the party that had appointed him. This caused a lot of trouble for the tribunal, but given that some jurisprudence in Sharia talks about the arbitrators being an agent for the party which appointed him, we can understand where his behaviour stemmed from.
There is another issue that arises from the jurisprudence. Some of the legal schools hold that once you appoint an arbitrator, and if the process does not suit you, you can terminate the arbitrator and appoint another. This highlights the fact that arbitration in Islam at that time was quite different from what we would recognise today (and this is the case for arbitration in any place in the world at that time). Arbitration in Islam back then was a mixture between a mediation, conciliation, and arbitration. That is why the jurisprudence talks about the arbitrator being an agent for a party, that the party can terminate him and why it talks about the issues with females.
This is very important and should be remembered by those who stand up in certain parts of the Islamic world today and say, "no you cannot apply foreign law to my case because it is non-Islamic". Even in arbitration in the Islamic world back then, arbitrators, mediators or conciliators, however you want to reference them, did not only apply the Islamic principles of Sharia to the case but they also applied common sense and equitable law. They did not determine the dispute with Sharia law alone. The reason is because on occasion the arbitration was between people who had different religions and different nationalities. There is an example of an arbitration with a Jewish tribe whereby they had to arbitrate on the settlement of things in the Arabian Peninsula and the arbitration was conducted and settled. Therefore pure Islamic Law was not the only law applied to an arbitration in an Islamic country.
As regards evidence, the law of evidence used in Islam was not a law that was limited to particular references and guidelines that only came from the Sunnah and Quran. The arbitrator had the full freedom to apply the law of evidence and to investigate the facts and to call on witnesses. This is evidence to show that people who raise the red flag saying, "no you cannot follow a law of evidence" or "you have to stick to the law of evidence", are wrong and that the law of evidence is not a matter of public order. This has been confirmed recently by many courts in the Middle East. The rules of evidence are something for the parties to agree on and you can vary the law of evidence and have your own evidence decided in the way and manner in which you want because it is not a matter of public order.
So what role does Sharia law play today?
People today do not always recognise that Islamic law supports arbitration and that you'll find support for arbitration in all Middle Eastern countries. This is significant given the fact that there are approximately 26 countries that have Islam as their official religion and about 1.6 billion Muslims around the world.
You will find that Sharia law is not a law that you can find neatly codified in a textbook so that a provision can be pinpointed to a judge in a courtroom so that you can say, "I want you to apply this Sharia law to me because of this". This is not an acceptable practice in any of the countries that I'm familiar with, with the exception perhaps of Saudi Arabia. Most certainly, in many of the Gulf countries and Middle Eastern countries (including Lebanon, Egypt, Tunisia, Morocco, Iraq, Kuwait, United Arab Emirates and Qatar), you cannot simply refer to the Quran or the Sunnah and say "I want you to apply this principle". These countries, according to their constitution, apply a modern codified law.
So the reference to the judges in court is to the law of the country that has been enacted in whatever process for which the constitution provides. However, some of the principles in the codified law are derived from Sharia and Sharia principles. The constitution of most Arab countries states that when you legislate in that country you must endeavour to derive your legislation from Sharia. Therefore you'll find that the law in modern Islamic countries is codified law, with many familiar provisions, but with some changes to reflect the inclusion of Sharia principles.
The question then arises - does the law in an Islamic country ever deviate from the Sharia? Yes, there is.
We don't talk about it but there is. If you look at interest for example, interest is prohibited in Islam. However, in almost every single Arab country there is a clause in the commercial code that says interest is allowed and interest has been awarded in commercial transactions. There are judgments from Abu Dhabi's Court of Cassation where the law that provides for interest has been challenged on the basis that it is not constitutional and the court refutes it, refusing to apply Sharia as dry Sharia, on the basis that as a judge one is confined to applying the law and therefore interest can be awarded.
So you find in all Arab countries, more specifically all Islamic countries, that although Sharia finds its way into the law, the judge and arbitrators are applying codified law, including issues to which some people object, which in my opinion is historical. I'm sure it exists in all Arab countries. For example, if one looks at the law of Egypt or the law of Jordan, you'll find that under the law of arbitration arbitrators will be appointed without reference to religion or gender. It is a dead issue, already determined and today there are no more instances of somebody standing up and disputing whether a female arbitrator can be appointed or not. Is this in accordance with Sharia? - of course! There is no prohibition in the jurisprudence, except that the arbitrator should have the qualification of judge (we already know Umar appointed a female judge). Any arguments pertaining to whether or not a female can be appointed have become academic. The law of the land today determines these issues. Some of the national law is sourced from the original Islamic principles of Sharia and so these principles have become embodied in the law of the country. This means that if you file an application before the courts or arbitral Tribunal in a contemporary Islamic state, in modern Arabia, the arguments based on some jurisprudence that existed in the thirteen hundreds will be irrelevant unless you can direct the judge to a particular article within the national law.
What is happening, I see it in some of the cases on which I sit, is individuals trying to taint an arbitration with different arguments because of a particular benefit they hope to get out of the argument, or because they think the complication they hope to raise will make the arbitration more complex or delayed, or will confuse the arbitrator or the process.
There are however two instances where I think Sharia will become relevant to any process of arbitration. The first is the example I gave earlier on, when the parties specifically say to the arbitrator "no, we want to adhere not only to the law of a specific country but also to Islamic behaviour, so when you're deciding on my case I want you to watch out for Islamic behaviour". So you specify the Islamic Sharia as one of the equitable laws that the arbitrator has to look at, which is not unusual. In such a case it may be that when the arbitrator comes to consider interest, he cannot award it, because interest under Islam is usury and you cannot award interest for the usury purposes which are prohibited in Islam.
The second instance where I believe Islamic Sharia may feature is this - in any country which has its own culture, history, background, there is something called public order or public policy. I think that part of Islamic countries' public order could be some Islamic principles. Matters of public order are recognised under the New York Convention and recognised under arbitration laws as one of the reasons to refuse enforcement of an arbitration award. That is when some Islamic principles may find their way in, as part of the public order of the country when it comes time for enforcement.
In conclusion, Islamic Sharia principles, which are the Islamic law, address arbitration and support arbitration and the arbitration of disputes can be found throughout the history of Islam. Not all issues surrounding the conduct of the arbitral process were determined at the time, however in contemporary legislation all of these issues have been determined, either by finding some sources in old Islamic history (in my example whereby a female judge had been appointed in a previous era), or, as any society does in modern life, they have adopted a new legal principle in arbitration which did not exist before.
For example, I don't think the religious schools have ever discussed the arbitration clause as being independent from the contract. This issue was never debated in Islam, I actually don't think it has been debated in the last 30 years of contemporary life and therefore the UAE legislature and other Islamic countries' legislatures have adopted the principles into their modern law so as to make it the law of the country. Should the arbitrator go back to applying the old jurisprudence or look for something in the Sunnah or Quran? The answer is no. Arbitrators and judges are confined to applying the current law and they should limit themselves to applying the law - which may be the same as an Islamic principle derived from Sharia.
The views expressed in this article do not necessarily constitute the views of Zawya.
© Al Tamimi & Company 2012
