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An Analysis of the Influence of Islamic Law on Saudi Arabia's Arbitration and Dispute Resolution Practices - ARIA - Vol. 26, No. 1

Author(s): 
Shaheer Tarin
Page Count: 
24 pages
Media Description: 
1 PDF Download
Published: 
July, 2015

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Originally from American Review of International Arbitration - ARIA

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INTRODUCTION
 
In recent decades, commercial transactions and business dealings between
parties belonging to different cultures, societies, political systems and faiths have
become commonplace. Saudi Arabia and other Muslim societies are no exception.
In 2012, the United Nations’ GDP and its Breakdown at Current Prices in US
Dollars ranked the three predominantly Muslim countries of Republic of Turkey,
Republic of Indonesia and the Kingdom of Saudi Arabia in the top 20 largest
world economies.1 In the same year, exports from the United States to Saudi
Arabia amounted to $19 billion;2 European Union exports to Saudi Arabia
amounted to €33 billion;3 and Australian exports to Saudi Arabia surpassed $2
billion Australian.4
 
 
In a globalized age where world economies are becoming increasingly
intertwined, it is ever more necessary to have an appreciation of various facets
affecting each party to a business dealing, including the financial, social,
cultural, political and legal. During business transactions, it has become widely
accepted that differences are likely to emerge from business dealings and it is
therefore essential to have an understanding of the opposing party’s approach to
dispute resolution and the factors that influence its decision making and
perception.5
 
 
This article, with a focus on construction arbitration, seeks to provide an
analysis of the effect Islamic law6 – or Shari’a – has had on the Saudi Arabian
arbitration and dispute resolution practices. In its discourse, the article will discuss
themes and mechanisms of dispute resolution prevalent in Islamic law as the
cornerstone for this overarching influence. An analysis of the Saudi Arabian
Arbitration Laws of 1983 and 2012 will be provided. The author will proceed to
investigate how Saudi Arabia’s arbitration experience with foreign economic
powers in recent modern history has rendered Saudi Arabia as an unappealing
destination to arbitrate and what the contemporary challenges facing the Saudi
Arabian arbitration landscape are.