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The impact of sharia on the acceptance of international commercial arbitration in the countries of the gulf cooperation council
Abstract
Members of the Gulf Cooperation Council (GCC) have been slow in accepting modern arbitration practices. Some of the GCC countries have only recently started to modernize their arbitration laws to bring them in line with these modern practices. Sharia has always been viewed as an obstacle to the development of arbitration in this part of the world, and many still see it as an impediment to the enforcement of foreign arbitral awards in the GCC countries. In this article, the author argues that there is enough flexibility within sharia to accommodate modern international arbitration practices, and the delay in accepting these practices is attributed to other factors, mainly the negative experience the GCC countries have had with arbitration. This paper concludes that arbitration in the GCC will realise its fullest potential only if the modernization of arbitration laws is combined with a greater understanding and acceptance, by the western legal community, of sharia as a legal system.
... Oman, in 1997, passed legislation implementing the UNCITRAL Model Law on International Commercial Arbitration. 122 Bahrain recently adopted a new arbitration law in 2015, also based on the Model Law. 123 Qatar passed Law No. 2 of 2017 on rules of arbitration on March 13, 2017. ...
This article maps the main fault lines between the concerns for Shari’ah compliance, which are central to Islamic commercial arbitration and the categories of private international law. While issues such as applicable law, public order and the enforcement of foreign arbitral awards are routinely addressed in private international law, questions remain as to the extent to which the latter is able to accommodate additional concerns, which would be relevant for Shari’ah compatibility of an Islamic commercial arbitral award. This study is based on the qualitative methodology that is standard in legal analysis. This methodology consists, first, of desk-based research to compare the formulations found in a variety of textual sources: national and international legal sources, doctrinal opinions and the rulings of different courts. Second, the implications of different formulations are drawn out by considering actual and possible ‘limit cases’ in which the different wordings would translate into incompatible solutions. Third, proposals are made to help address the ensuing incompatibilities. Establishing a common operational ground between international private law and Shari’ah compliance in commercial arbitration would enable the two systems to function in a more coordinated fashion, reducing the legal uncertainties that are otherwise present when they are treated as parallel, mutually incommunicable systems. Through a focus on the specific misalignment between Islamic commercial arbitration and private international law, our article makes targeted suggestions that would materially address some of the concerns posed by the increasing internationalisation of Islamic finance—and by its attendant need for cross-border dispute resolution respectful of the ethical goals of Shari’ah compliance.
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