Islamic Law and International Arbitration

by Roger Alford

Faisal Kutty of York University has recently published a paper on the role of Shari’a law in international commercial arbitration. You can download the paper here. Here is the abstract:
The world has witnessed a phenomenal growth in commercial disputes transcending national borders due to our increasingly interrelated and globalized world economy. In addition to issues in interpretation of commercial agreements and practices, differences in custom, language, culture and religion continue to fuel conflicts and disagreements between commercial players. Over the last few decades there have been growing commercial interaction between Western companies and their Middle Eastern counterparts. Given this interaction and the great geo-political and economic importance of this region, it is imperative that Western lawyers and dispute resolution professionals have a reasonable grasp of the general principles of Shari’a or Islamic law, a source (to varying degrees) of law in most nations in the Middle East. It is clear that the increase in international commercial transactions has contributed to the globalization of the legal community, but it is disturbing that there has been very little examination of the influence and impact on the Middle East’s legal system’s religious underpinnings upon the continued acceptance of international commercial arbitration. Given the growing calls for a return to the Shari’a and increasing global interdependence, the western legal community can no longer be satisfied to leave the Shari’a as a preserve of Middle East specialists, Arabists and comparative law experts. It is a trite observation that cultural or more aptly in the Middle East, religious considerations, can play a vital role in the acceptance and successful functioning of international commercial arbitration. The religious variable may impact on the following: the scope of arbitration; the nature of arbitration; the choice of law; the appointment of arbitrators; liability of arbitrators; limitations periods; interest awards; public policy considerations; evidentiary considerations; enforceability of decisions, etc. This paper will explore the development and acceptance of international commercial arbitration in the Middle East and analyze the issues and areas which create tension between international commercial arbitration and the Shari’a. There is certainly a need to reform Islamic law from within to deal with contemporary norms, transactions and institutions, but there is an equal need to better accommodate and address the issues of concern from an Islamic perspective. The assumption and belief that the Shari’a is being sidelined, and that the current international commercial arbitration framework is exclusively derived from the Western legal heritage may create obstacles in the acceptance and continued legitimacy of international commercial arbitration in the Middle East, and even in the other Islamic nations. This is clearly unacceptable if we recall that the twin objectives of the legal framework underpinning international commercial arbitration are to ensure enforceability of arbitration agreements/clauses and arbitral awards and to insulate the arbitration process as much as possible from interference by domestic courts and other national or international institutions. This can only be achieved when there is mutual respect and understanding of the various laws, practices, cultures and religious worldviews prevalent in the world today. There is a clear need for dialogue. The aim of such a dialogue will be to help develop an international commercial arbitration regime in which the business community can have confidence, while staying true to the core principles of tahkim (arbitration) under the Shari’a. This will help remove a potential crutch that may be used by those who oppose the international commercial arbitration movement as being one of purely Western import.

2 Responses

  1. This paper makes a fundamental error in the way it employs the term Shari’ah, which it effectively conflates with fiqh.* Indeed, when one reads note 6 on pg. 5, we learn Kutty has compounded the error by taking on board what he terms ‘quasi-Islamic laws in existence in Muslim countries as a result of colonization and secularization.’ On the importance of the distinction please see, for example, Abou El Fadl’s discussion in Speaking in God’s Name: Islamic Law, Authority and Women (Oxford, UK: Oneworld, 2001), pp. 32-33. Later, on pg. 18, an acknowledgement of a distinction is made between Shari’ah and fiqh, but the operational employment of the former throughout betrays an inability to grasp the significance of the nature of the distinction, as he effectively conflates the meaning of divine law with positive law as derived from the methods and reasoning of the jurists. Hence it makes no sense whatsoever to state that ‘the Shari’ah is a positive system of law and not merely religious law.’ It is extremely important to recognize this, especially in a time when appeals to ‘implementing’ or relying on Shari’ah are made by Islamists as part of their political program for proper Islamic governance, and fears as to what Shari’ah entails are commonplace among pundits and public alike. The paper also makes it sound as if Islamic law arose simultaneously with the Companions of the Prophet: there is no evidence for this. Islamic law as a distinct legal system emerged sometime after the death of the Prophet Muhammad. Indeed, as Wael B. Hallaq notes, ‘The period between the third and eighth decades of the second century (ca. 740-800 CE) witnessed the maturation of both the judiciary and legal doctrine, as all essential features of these two spheres acquired a final shape, only to be refined during the succeeding century or two’ (see Hallaq’s The Origins and Evolution of Islamic Law, 2005, p. 79). Apart from this, the paper has much to recommend it. In fact it’s nice to see a couple of points I made in my comments to Adil’s post on ‘Islamic Law and Progressive Politics’ reinforced in the conclusion, to wit: ‘…[I]t is clear that there are diverse opinions and enough dynamism and latitude within the Shari’ah to reform and/or interpret the fiqh rules to be better reflective of modern transactions, circumstances and cultural outlook.’ Etc., Etc.

    *Without proper diacritics and absent italicization, compare the following definitions and discussion of both Shari’ah and fiqh below:

    Sharī‘ah: literally, something like ‘the way,’ or ‘the path to the watering hole (or spring),’ and refers to divine law or God’s will in Islam. Historically, the term Sharī‘ah refers to all the elements of a proper, i.e. righteous life; this includes moral behavior, proper respect towards Allāh, correct belief, personal piety, and so on. In other words, it means the right way to live one’s life as a Muslim in conformity to God’s will. In more recent times, the scope of its reference has narrowed to that which falls under the rubric of Islamic law (fiqh), but there is a logical, conceptual and practical difference between Sharī‘ah and fiqh. The latter involves the human process of understanding and implementing the divine law. It is a serious (religious, epistemological, ontological, ethical…) mistake to conflate Sharī‘ah and fiqh, or to use these terms, as often happens today, as synonyms. The Sharī‘ah, writes Khaled Abou El Fadl, ‘is God’s Will in an ideal and abstract fashion, but the fiqh is the product of the human attempt to understand God’s Will. In this sense, the Sharī‘ah is always fair, just and equitable, but the fiqh is only an attempt at reaching the ideals and purposes of Sharī‘ah (maqāsid al-Sharī‘ah). [….] The conceptual distinction between Sharī‘ah and fiqh was the product of a recognition of the inevitable failures of human efforts at understanding the purposes or intentions of God.’ The function of Sharī’ah is here analogous or similar to that of Natural Law among the Stoics. Recently, Abdullahi An-Na‘im has made the provocative argument that ‘precisely because sharī‘a is supposed to be binding on Muslims out of religious conviction, a believer cannot be religiously bound except by what he or she personally believes to be a valid interpretation of the relevant texts of the Qur’ān and Sunnah. Yet, given the diversity of opinions among Muslim jurists, whatever the state elects to enforce as positive law is bound to be deemed an invalid interpretation of Islamic sources by some of the Muslim citizens of the state.’ Moreover, such ‘objections to the enforcement of sharī‘a through positive law and the notion of an Islamic state do not, of course, preclude Muslims from personally conforming with every aspect of sharī‘a.’ We might describe the function of Sharī‘ah along the order of a Platonic Form, at least in its ‘bedrock version’ as outlined by T.K. Seung in Intuition and Construction: The Foundation of Normative Theory (1993). In this account, intuition and construction are two integral processes intrinsic to the functional role of Platonic Forms (or ‘Ideas,’ ‘Archetypes,’ etc.). Platonic Forms—like the Sharī‘ah—are (is) indeterminate, while nonetheless serving as normative, intuitive, and nonpropositional foundations for constructing (propositional) models as guides for determinate social realities, thus, for example, (the Form) Justice is only the normative foundation for constructing models of determinate social orders, none of which fully realizes Justice, and all of which endeavor to approach Justice, succeeding by degrees. What is more, the attempt to instantiate or embody the model is never wholly successful, given the nature of the human condition and the model’s idealized qualities in reference to the Form itself: ‘The indeterminacy of Platonic Forms makes them flexible standards, and their flexibility assures their eternal durability.’ Sharī‘ah is like the Platonic Form in being universal, abstract, indeterminate, and nonpropositional, and thus cannot directly serve as a normative standard. This is perhaps one reason Norman Calder writes that, ‘in modern academic analysis of Islamic law, the word Sharī‘ah is of little use: what we can study and describe is always fiqh.’ Fiqh represents a Platonic-like endeavor to translate Sharī‘ah into direct, concrete, and normative models for particular contexts. As with Platonic intuitionism in which all human beings have access to Platonic Forms, all Muslims, as noted by An-‘Naim above, have access to Sharī‘ah, indeed, they are under a spiritual obligation to attempt to understand (and live by that understanding) the divine law. Such understanding is necessarily partial and fallible and may vary according to the individual (every Muslim is different): ‘Indeterminacy and relativity are inseparable in the domain of realization.’ The divine nature of Sharī‘ah means it retains a normatively transcendent and evaluative function whatever the extent of its positivization as fiqh. In other words, law as such cannot exhaust the evaluative function of divine law as one’s understanding of same can always deepen, one’s intuitive discernment can always be keener. As a transcendent (nonpropositional) guide for action, and despite its integral relation to Islamic law, Sharī‘ah should not be confused or conflated with any of its propositional constructions by way of fiqh, or any political proposal for a putatively Islamic state. Nonetheless, fiqh can serve as an aid in coming to understand divine law insofar as it enables us to obtain further, dialectical insight into that which transcends positive law; discursive reasoning and rational understanding, in other words, and in this case intrinsic to the Islamic science of jurisprudence, are part and parcel of the process of acquiring nonpropositional insight into divine law. That is to say, there is a dialectical relation between divine and human law that represents, in epistemic terms, a dialectic between propositional knowledge and ‘knowledge by acquaintance’ in a Platonic sense or ‘knowledge by presence’ after Shihāb al-Dīn Suhrawardī: ‘The insight that transcends words cannot be attained except by means of words; what cannot be spoken of becomes manifest in the very act of speaking. Thus Platonic dialectic entails the wedding of discursive and nondiscursive thought. Only through the process of examining and refuting propositions—a thoroughly discursive process—can we just barely obtain knowledge that is nonpropositional’ (Francisco J. Gonzalez, Dialectic and Dialogue: Plato’s Practice of Philosophical Inquiry, 1998). The jurist’s understanding of Sharī‘ah, in other words, is evidenced by his facility with ’usūl al-fiqh: how he has arrived at the determination of law, rather than simply the result, that is, the legal determination or ruling itself, or, in the case of furū‘ al-fiqh, the persuasiveness of the arguments explicating the concepts and rules that relate to religious rituals and ethico-religious conduct in the widest sense.

    fiqh: understanding, knowledge: Islamic jurisprudence (law) as derived from Sharī‘ah (lit., the way; divine law, God’s will). Sharī‘ah is perfect: immutable and infallible, God’s will as abstractly and ideally understood, while fiqh is fallible and changeable, the product of a human attempt to understand that which is divine. There is, in other words, a logical, conceptual and practical distinction between Sharī’ah and fiqh, however much the latter is inspires the former. As Norman Calder observes, there are two broad types of jurisprudential literature: usūl al-fiqh (‘roots’) and furū‘ al-fiqh (‘branches’) (there is a third type, the tabaqāt—biographical—genre which is common beyond fiqh proper and not treated here). Islamic law itself is the product of the application of usūl al-fiqh (the ‘roots’ or sources of law), the principles and methods through which practical rules are developed from the tradition’s foundational sources: a) the Qur’ān, b) the Sunnah, c) ijmā‘ (consensus) of Muslim scholars on a legal rule about a topic not explicitly covered in the aforementioned sources (Shī‘ī jurists deny this is possible; and differences arise as to the possible value of ‘implied’ or ‘silent’ consensus, with Hanafī jurists speaking in its favor), and d) analogy (qiyās), involving reliance on precedent. In conjunction with these sources, subsidiary or supplemental presumptions and principles may aid the jurist in deriving interpretive rules: istihsān (considerations of equity and the application of discretion or preference, the ratio legis or ‘effective cause of the ruling’ differing from one obtained strictly through qiyās); ‘unregulated interest’ or masālih mursalah, explained by Wael Hallaq as arising in relation to a rationally suitable benefit motivated by public interest ‘that is not sustained by textual evidence,’ later this method of reasoning was approved provided ‘it could be shown that the feature of public interest adopted in a case was suitable (munāsib) and relevant (mu‘tabar) wither to a universal principle of the law or to a specific…piece of textual evidence’ (Hallaq); and istishāb, the rational presumption of continuity. There are four major schools (madhhabs) (five, when we add the Shī‘ī) of Islamic law: the Hanafī, the Hanbalī, the Mālikī and the Shāfi‘ī, along with a fair number of other teachers and ‘schools’ (e.g. the Zāhirī, Zaydī, Ibādī, and Ismā‘īlī) throughout Islamic history. In Twelver Shī‘ism, the Usūlī school of jurisprudence predominates. After Shāfi‘ī, the jurist’s decision in a new case of law must fall into one of five categories: the obligatory (wājib), the recommended (mandūb), the permissible (mubāh), the prohibited (harām), or the repugnant (makrūh). Calder defines the scope of the second type of jurisprudential literature, furū‘ al-fiqh:

    [Furū‘ al-fiqh] sets out…concepts and rules that relate to conduct, and arguments about them. Its headings are purity, prayer, fasting, alms,pilgrimage…and then such topics as warfare, marriage, divorce, inheritance, penalties, buying and selling, judicial practice, etc., in variable order. The whole is a conceptual replica of social life, not necessarily aspiring to be either complete or practical, but balanced between revelation, tradition and reality, all three of which feed the

    discussion and exemplify the concepts.

  2. Update: I’ve let Mr. Kutty know of my comments, and he said he’d read them, so perhaps we’ll hear from him.

    Readers can find a list of titles on ‘Islamic jurisprudence’ in my English-language bibliography for Islamic Studies, several versions of which are available online at various sites (largely, university libraries). Just do a ‘google search’ and you’ll readily find it. If anyone wants the latest draft of the entire bibliography I’ll send it along (be forewarned, it’s over 35,000 words).

    In addition, I would recommend Timur Kuran’s (indeed, anything by him) Islam and Mammon: The Economic Predicaments of Islamism (Princeton, NJ: Princeton University Press, 2004), and Ibrahim Warde, Islamic Finance in the Global Economy (Edinburgh: Edinburgh University Press, 2000).

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