If developed and institutionalised, Islamic arbitration can contribute to resolving disputes in many matters, especially commercial issues.

MAGAZINE 11.05.2021, 00:10 11.05.2021, 00:35

Arbitration is an agreement between parties to resolve disputes that may arise through a selected arbitrator or arbitrators rather than applying to state courts. In the last century, rapid developments have taken place in international trade, foreign direct investments, and interstate economic/commercial areas. Along with these developments, Arbitration, which has become prevalent as an alternative solution method to national courts, has a history and practice dating back to ancient times.

In the early ages, people protected their rights by use of force. As societies evolved, the parties consulted arbitrators to resolve disputes. In those times, influential leaders of the tribe performed the arbitration duty. As the legal systems developed, conflicts were resolved through the courts that represented the authority of the state. Although arbitration practices have weakened over time with the strengthening of state authority, they have maintained their existence.

In Islamic history texts, the following incident regarding arbitration practices of the pre-Islamic Arabs was reported: The Kaaba was rebuilt after being damaged by a fire and then destroyed by a flood. During its renovation, a dispute broke out among the tribes of Mecca regarding who should have the honour of placing the Black Stone (al-Ḥajaru al-Aswad). The dispute got worse, and a war was about to break among the tribes. Finally, they decided on the arbitration of the first person to enter the Kaaba the next day. When the Prophet (pbuh) entered the Kaaba as the first person the next day, they accepted his arbitration straightaway, as he was a credible person in the society. The Prophet (pbuh) put the Black stone on a piece of cloth and asked each tribe leader to hold the corners of the cloth. Then the Prophet (pbuh) himself placed the stone in its place. Thus, the conflicted parties were happy to have been involved in this process.


The practice of arbitration in pre-Islamic Arab societies also continued after Islam. The legitimacy of arbitration in Islamic law is determined by the Quran, Sunnah, consensus (İjma), practices of the companions, and customs. The following verse from the Quran regarding the legitimacy of arbitration recommends arbitration during family disputes: “If you anticipate a split between them, appoint a mediator from his family and another from hers. If they desire reconciliation, Allah will restore harmony between them. Surely Allah is All-Knowing, All-Aware.” (Surah An-Nisa: 35)

The legitimisation of arbitration is also determined with Sunnah of the Prophet (pbuh). According to a Sunnah reported by an-Nasa’i: When he came to the Messenger of Allah [SAW], and he heard them calling Hani’ by the nickname of Abu Al-Hakam, the Messenger of Allah [SAW] called him and said to him: “Allah is Al-Hakam (the judge) and judgment is His. Why are you known as Abu Al-Hakam?” He said: “If my people differ concerning something, they come to me, and I pass judgment among them, and both sides accept it.” He said: “How good this is.” Arbitration was also a solution method used by the Companions of the Prophet (pbuh). According to an incident reported by Al-Bayhaqi: During a dispute between Omar ibn al-Khattab and Ubayy ibn Ka’b, Zayd ibn Thabit was selected as an arbitrator. Similarly, Jubayr ibn Mut’im became the arbitrator between Uthman ibn Affan and Talhah. Also, during the battle of Siffin, the parties chose the method of arbitration to resolve the conflicts.


Most Islamic scholars considered arbitration permissible based on the abovementioned evidence. However, there are various opinions on the type of dispute that can be resolved by arbitration. According to the Hanafi school of thought, arbitration can be applied in all matters except limit (hadd) and retaliation (qisas). According to Maliki school of thought, arbitration is permissible in all matters except limitation, retaliation, mutual agreement between spouses, qada, divorce, lineage, and custody.

While Shafii school of thought consider arbitration permissible for goods and onerous legal transactions, Hanbali school of thought allow arbitration in all matters. Although Islamic scholars disagreed on the issues that the arbitration would take place, they agreed that arbitration is permissible in commercial matters that are subject to the will of the parties. In Mecelle, the first civil law of the Ottoman Empire, there is a provision that “Actions relating to rights concerning property may be settled by arbitration” (art.1841). Thus, there is no obstacle to arbitration on abdicable matters of the parties.


Firstly, for the arbitration to be valid, the parties must agree on the arbitration, and the selected arbitrator or arbitrators must accept this duty. The arbitrator can be given to one or more persons. In the event of more than one person, the principle is to make the decision concerted. However, if the parties agree, the decision may be taken by a majority vote.

While arbitration decisions are binding on the parties of arbitration, they are not binding on third parties. The arbitrators can only decide on matters for which they have been authorised. Most Islamic scholars have deemed the qualifications necessary for a judge as a requirement for the arbitrator as well. These conditions are: Being a Muslim, wise, of age, fair and free. While a Muslim arbitrator is essential, a non-Muslim may also be selected in commercial matters, provided that the Islamic rules are applied. If developed and institutionalised, Islamic arbitration can contribute to resolving disputes in many matters, especially commercial issues. Thus, the will of the parties will be realised, and the burden of the state judiciary will be relieved.

Istanbul Sabahattin Zaim University Dr. Ensari Yücel

You can view the content in the 25th issue of Katılım Finans. (ARBITRATION IN ISLAMIC LAW)

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