Arbitration

Includes consulting and legal legitimacy to provide this advice to individuals, companies and institutions, either permanently or temporarily.

Initiation

Arbitration dates back to old days of human history. It even initiated prior to law and statehood. Nations and all communities in general experienced arbitration throughout history. Arabs were no exception as arbitration was experienced by Arabs as a mode of resolving disputes both pre and post the emergence of Islam, though however arbitration in the post Islam era was governed by Shari’a rules. Arabs in the pre Islam era experienced arbitration as a means to resolve dispute, for which purpose they would select an individual characterized by wisdom, leniency, intelligence and sagacity.

Arbitration was confirmed by Islam as a mode of resolving disputes. However, arbitration was disciplined as to ensure equity for the parties to dispute. The legality of arbitration is stated in various provisions of Shari’a rules, including for example:

  1. Arbitration is commended in the holy Qur'an as a mode of resolving differences. Following is the meaning of the relative provision ( Aya 35- An-nisa)," If you ever fear a breach between them twain (the man and his wife) appoint (two) arbitrators, one from his family and the other from her’s, if they both wish for peace, Allah will cause their reconciliation”.

    Qur’anic verse no.35, An-Nisa.

    The Qur’anic verse in this respect means that arbitration between husband and wife in case of difference and dispute, prior to deciding the case by the court of law, is permissible and legal, in an attempt to work out a solution that would ensure a more lenient and easier solution to ultimately safekeep matrimonial secrets and safeguard relationships between the families of husband and wife.

     

  2. Arbitration is further confirmed by Qur’an. The following is the meaning of Qur’anic verse relating to the killing of game: “O you who believe! Kill not the game while you are in state of Ihram (for Hajj or Umrah (pilgrimage), and whoever of you kill it intentionally, the penalty is an offering, brought to the Ka’bah, of an eatable animal (i.e. sheep, goat, cow) equivalent to the one he killed as adjudged by two just men among you..) Qur’anic verse no. 59 Surah 5 Al – Ma'idh. Accordingly, Allah, legislated arbitration as means to determine the equivalent to the game killed in penalizing the individual who kills the game while in a state of Ihram.

     

  3. Narrated Shuraih Ibn Hani: when we visited the Prophet Mohammad (s.a.w), for the first time, Abu Al hakam (surname means the arbitrator) was among the delegation. Abu Al Hakam then was summoned by the prophet Mohammad who asked him "how it can be(that an individual be named alhakam) as Allah is only the Hakam(i.e. arbitrator). So why you are being named Abu Al Hakam. Abu Al Hakam answered “where my fellow tribesmen are in dispute (over any issue) they would come to me then I would decide on the case and both parties to the dispute would be satisfied”. The Prophet commented “how good it is”. Accordingly, Prophet Mohammad’s (s.a.w) approval, who “nor does he speak of (his own desire)" is an evidence of the legality of arbitration.

     

  4. According to certain scholars the legality of arbitration is unanimously approved by scholars. According to Sarkhasi in Almabsut “There is consensus of opinion among the companions of Prophet Mohammad about the legality of arbitration”. Further, according to Alramly “A group of companions of Prophet Mohammad (s.a.w) experienced arbitration. As it was not contested (by any of the companions of Prophet Mohammad (s.a.w) therefore it was considered consensus”.

     

  5. Arbitration tend to make the settlement of dispute easier for the disputing parties as considering the simpler procedures adopted in arbitration and shortened time and ultimate objective of avoiding painful feud and spoiling friendly relationship and rupture of relations between the disputing party.

     

Where the parties to dispute are legally competent to act for themselves they may appoint arbitrators to settle the dispute. Where both parties to dispute or one party is not legally competent to appoint arbitrators their duly appointed representatives will appoint arbitrators. In line with the legal practice arbitration is frequently stipulated in case of dispute in which case the relevant provision of the contract will be binding should the need for arbitration arise. However, the parties to dispute may optionally choose to refer the case for arbitration even if it is not stipulated in the contract.

 

New Saudi Arbitration Law (NSAL):

The New Saudi Arbitration Law adopted arbitration as a basis of resolving disputes. NSAL was issued by Royal Decree no. M/34 dated 24.5.1433.
http://www.mci.gov.sa/LawsRegulations/SystemsAndRegulations/AbitrationSystem/Pages/default.aspx

 

Outstanding international arbitration boards / centers
  1. Chamber of Commerce ICC International Arbitration Court:
    Established in 1923 the ICC International Chamber of Commerce Arbitration Court has jurisdiction over such cases, the parties to which have agreed to bring to ICC arbitration court. The dispute to be referred to ICC Court of Arbitration should be international and commercial in nature. ICC Court of Arbitration represents businessmen towards governments and international organizations .

     

  2. Cairo Regional Center for International Commercial Arbitration( CRCFICA ):
    Established in 2004 and certified by the Egyptian ministry of justice CRCFICA caters to commercial needs as required by local and international circumstance to quickly settle commercial and civil disputes subject to including all CRCFICA’s arbitration conditions in the contracts made by the parties wishing to bring arbitration case to CRFICA.CRFICA is intended to be the core Pan Arab Arbitration Centers Federation.

     

  3. Dubai International Arbitration Center
    Established in 1994 DIAC intends to provide commercial arbitration services and settlement of possible commercial disputes arising between parties to commercial transactions.

     

  4. Abu Dhabi Arbitration and Reconciliation Center (ADAARC):
    Established in 1993 ADAARC’s role is to determine procedural and objective rules necessary to settle the dispute cases brought to the center. ADAARC does not allow the application of any law on procedural or objective rule that would cause in future any reconciliation or arbitration award to be invalid or otherwise restrict the application of the same in the same country of the convicted, or any other country in which the award may be applied on the grounds that such law or procedure in inconsistent with public order and decency. Where ADAARC’s jurisdiction is not determined by the parties to dispute ADAARC will determine its jurisdiction over the cases brought to ADAARC for arbitration.

     

  5. Islamic Conciliation and Arbitration Center (ICAAC) Dubai:
    Established in 2005 ICAAC is specialized in resolving disputes relating to Islamic financial institutions whether between Islamic financial institutions (IFI) or between IFI and one IFI member and a client of such member. ICAAC also has jurisdiction over disputes between IFI’s and other institution that may wish to refer their dispute to ICAAC.

     

  6. Pan Arab Federation of International Arbitration (PAFOIA):
    PAFOIA was established in 1997. Since then a selected group of members, arbitration bodies and other working in arbitration have affiliated themselves with PAFOIA.

     

  7. Alexandria International Arbitration and Alternative means Settling Disputes Center (AIAC):
    AIAC a non – profit was established by Egyptian and other Arab lawyers. AIAC is financially independent from any national or foreign organization and intended to promote the culture of arbitration and other alternative means like reconciliation, mediation and other means. AIAC also participate in managing local and international commercial arbitration and other alternative means. Further AIAC gives advice and expertise in drafting commercial and industrial contracts and also gives administrative and technical assistance relating to special arbitration cases. AIAC further gives translation of arbitration terms and conditions in addition to assistance in the execution of awards. The center furthermore provides updated complete listing of national and foreign arbitrators and experts. AIAC has established cooperation relationship with other arbitration councils / centers. In this respect AIAC has signed protocols with other arbitration councils in and out of Egypt for the development of relations with such bodies and organization of training courses / conferences, preparation of specialized arbitration training programs.
    It is to be noted that AIAC’s jurisdiction over arbitration cases is based on the respective parties’ agreement to refer the case to it.

 

Main international arbitration treaties:
  1. New York Arbitration Convention: the convention on the recognition and foreign arbitral awards – 1958
  2. European convention on International Commercial Arbitration of 1961. Done at Geneva, April 21 1961
  3. Latin American Nations Convention ( The Montevidio Convention ) done in 1961 and became effective in 1965.
  4. Convention on the settlement of investment disputes between host nations and other nations (Washington convention done 1965)
  5. Convention on International Reconstruction and Development Bank done on 18.3.1965.
  6. Moscow convention on the settlement of disputes between communist countries through arbitration done on 29 may 1972.
  7. United Nations International Standard Commercial Arbitration Law issued on 21.6.1985 (UNCITRAL rules). UNCITRAL rules are intended to standardize objective and procedural rules.
  8. U.S Commercial arbitration regulations through U.S arbitration Federation.
  9. The New Saudi Arbitration Law adopted arbitration as a basis of resolving disputes. NSAL was issued by Royal Decree no. M/34 dated 24.5.1433.
    http://www.mci.gov.sa/LawsRegulations/SystemsAndRegulations/AbitrationSystem/Pages/default.aspx