Originally from Arbitration Law and Practice in the Middle East

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I. INTRODUCTION: ARBITRATION IN SAUDI ARABIA –HISTORY AND INFRASTRUCTURE

A. History and Current Legislation on Arbitration

1. Historical evolution of law relating to arbitration

Pre-Islamic literature indicates that Arabs knew about arbitration before the emergence of Islam.  At that time, it was a predominant means of settling disputes between individuals and also between tribes since there was no organized form of justice. After the emergence of Islam the concept of arbitration developed further within the different Islamic eras and schools. 

Before highlighting commercial arbitration in the Kingdom of Saudi Arabia, it is important to mention that Islamic Shariah law does not make any distinction between civil and commercial activities. The rules of Shariah apply regardless to the nature of the transaction or the profession of the person who is involved is such a matter. However there is nothing in Shariah that would prevent an Islamic ruler hakem from passing or adopting laws especially enacted for merchants provided that the laws do not conflict with the principles of Shariah.  This authority is based on the doctrine of al siyasa al shariyyah, which gives the ruler the power to do whatever is needed for the public good or maslahat al umma, including the merchants in the business community.