Speaking Reference Guide

Panelist Reference: Mr. Anas bin Aqeel

Document Purpose: Structured English talking points and key conceptual responses mapped directly to panel questions.

Panel Session 1: From Classical Tahkim to Modern Shariah-Guided Arbitration

Directed Panel Question (11:46 am - 11:51 am):

"Saudi Arabia has undertaken significant legal and arbitration reforms in recent years. From your perspective, how has the Kingdom balanced fidelity to Shariah principles with the demands of modern international arbitration practice?"

1. Conceptual Reservation on Terminology

• Inaccuracy of "Shariah-Guided": The phrase "Shariah-guided" is conceptually imprecise. In genuine Islamic arbitration, departing from Shariah is not an option; the adjudication must fundamentally originate from and be governed by Shariah rules.

• Theological and Binding Foundation: Seeking arbitration under Shariah is a core tenet of Islamic belief, rather than a mere jurisprudential luxury or a cultural preference that a Muslim can bypass at will. When a dispute arises in a Shariah-compliant transaction, the foundational reference must be divine law, not merely whatever regulations the parties choose if they contradict Shariah.

• Proposed Alternative: It is strongly recommended that the panel or future conference editions adopt the term "Modern Shariah Arbitration" or "Modern Islamic Arbitration" instead of "Shariah-guided."

2. The Saudi Balancing Framework: Separating Procedure from Substance

• Procedural Matters (Wide Scope for Flexibility & Customization):

• Procedural elements include the method of filing, tribunal formation, response timelines, language, seat of arbitration, hearing management, electronic notifications, document disclosures, and witness/expert testimonies.

Practically, these elements constitute over 95% of the provisions in modern arbitration laws and institutional rules.

Shariah explicitly leaves the organization of these mechanisms to public interest, commercial custom, and mutual agreement, provided they do not introduce injustice, impair defense rights, or violate an independent Shariah prohibition.

• Substantive Law Governing the Dispute (Strict Adherence Required):

^{circle} Substantive law dictates the actual merits of the dispute: contract validity, breach consequences, financial consideration, liquidated damages, and prohibitions against Riba (usury/interest), Gharar (excessive uncertainty), or capital guarantees in partnerships (Mudarabah).

This is where a Muslim cannot compromise Shariah for a conflicting law. Parties cannot validly agree to interest-bearing penalties, capital guarantees that violate partnerships, or select an absolute foreign law (such as French or American law) if its substantive applications directly contradict Shariah.

• The Saudi Golden Rule: "The default rule for arbitration procedures is flexibility and openness unless they violate Shariah principles or procedural fairness; whereas the default rule for the substantive merits of the dispute is absolute commitment to Shariah, and party autonomy cannot validate a choice of law that contradicts it."

3. Defining Distinctive Features of Islamic Arbitration

• Choice of Law Clause: Unlike secular arbitration where choice of law is bound only by public policy at the seat, Islamic arbitration mandates that the chosen law must inherently be Shariah-compliant.

• Arbitrator Qualifications: Arbitrators are not merely private dispute managers; they must be Muslim, just ('Adl), and possess verified knowledge of Shariah rules corresponding to the specific dispute. Commercial or secular legal expertise alone is insufficient.

• Arbitrability of Disputes: Shariah restricts arbitrability; matters concerning public rights of God or non-disposable public policy assets cannot be privately arbitrated.

4. The Saudi Experience as a Global Model for Modern Institutionalization

• Transition to Modern Institutionalism: Islamic arbitration has successfully evolved from relying solely on the personal trust of an individual arbitrator (Classical Tahkim) into a sophisticated, rule-based institutional framework (incorporating specialized centers, digital hearings, structured fees, and award scrutiny).

• Codification and Legal Certainty: Recent landmark reforms in Saudi Arabia—specifically through the **Civil Transactions Law****, the **Law of Evidence**, and the institutional rules of the **Saudi Center for Commercial Arbitration (S.C.C.A)**—have successfully transformed uncodified Shariah principles into clear, modernized statutory articles. This provides international arbitrators with absolute legal certainty while remaining fundamentally anchored in Shariah.

Panel Session 2: Operational Interoperability in Practice

Directed Panel Question (12:04 pm - 12:09 pm):

"In your experience, what is the single biggest obstacle to the recognition, acceptance and enforcement of Shariah-guided arbitral awards across jurisdictions?"

1. Defining Operational Interoperability (Interoperability versus Uniformity)

- Not Mandatory Uniformity: Interoperability does not require enforcing identical laws, codes, or religious rulings globally. Instead, it means "ensuring that the outputs of one regional system are perfectly understandable, checkable, and enforceable within another system."

• Acceptance of Pluralism: Interoperability respects and accepts cross-border legal pluralism (e.g., allowing a system in Riyadh to interface seamlessly with a court in Kuala Lumpur), whereas a "Unified Code" rigidly seeks a single rule for all.

2. The Single Biggest Obstacle: Enforcement Rejection Due to Ambiguity

• The Enforcement Gap: The primary obstacle is when an award is legally and flawlessly rendered at the seat of arbitration, yet face **summary rejection at the enforcement stage** in another country.

• Root Causes: This breakdown happens due to imprecise procedural phrasing, ambiguous substantive Shariah characterizations, or a failure to clearly state the governing reference and address public policy thresholds (such as interest or late payment treatments) beforehand.

3. Practical Cross-Center Mechanisms to Achieve Interoperability

• Inter-Center Memoranda of Understanding (MoUs): Major institutions (e.g., S.C.C.A, B.C.D.R, A.I.A.C, C.R.C.I.C.A) must execute MoUs covering joint rosters of Shariah arbitrators, standard clauses, expert exchanges, and reasoning standards.

• Cross-Border Shariah Roster: Establishing a joint registry of qualified arbitrators who possess dual expertise in international arbitration and Shariah, classified by language, school of jurisprudence (Madhhab), and financial product mastery.

• Global Arbitral Awards Database: Creating a cross-institutional database of redacted, translated Islamic arbitral awards and enforcement judgments concerning frequent disputes (e.g., Riba, liquidated damages, lost profits, Sukuk, Mudarabah). This minimizes surprises and maximizes legal predictability.

• Standardized Procedural Orders: Developing unified templates for Procedural Order No. 1 that explicitly define Shariah references, expert roles, regulatory disclosures, and asset locations to clear enforcement hurdles early.

Panel Session 3: Building the Future Ecosystem

Directed Panel Question (12:22 pm - 12:27 pm):

"Do you foresee the possibility of developing common minimum standards for Shariah-guided arbitration across jurisdictions? If so, what should they include? What's your thought on striving for a unified code among jurisdictions?"

1. Refuting the Notion of Shariah's Inadequacy for Modern Practice

• Comprehensive Sufficiency: Any argument suggesting that Shariah is unsuited for contemporary commercial application due to a lack of secularized civil codes is profoundly flawed and short-sighted. Classical and contemporary Islamic jurisprudence—with its deep catalog of sub-branches, legal maxims, and hypothetical cases—remains fully capable of resolving any highly sophisticated modern dispute.

• The Arbitrator's Mandate: Shariah requires that the chosen arbitrator be inherently knowledgeable and capable of applying jurisprudence to novel, unprecedented cases (Nawazil).

• Leveraging Collective Ijtihad: Modern arbitrators have a vast repository of contemporary, institutionalized scholarly consensus (**Collective Ijtihad**) to draw upon, including resolutions from the International Islamic Fiqh Academy (O.I.C), the Islamic Fiqh Academy (M.W.L), Al-Azhar, and the standard-setting bodies like **A.A.O.I.F.I**.

• Jurisprudential Divergence is Natural: Scholarly divergence in jurisprudence (Ikhtilaf) is not a valid ground to question Shariah's enforceability. Even in secular legal systems, statutory texts are continuously subject to conflicting interpretations by judges, lawyers, and supreme courts without undermining the authority of the law itself.

2. The Pitfalls of the Current Fragmented Reality

• Conflicting Regimes: A single commercial issue can be decided under conflicting paradigms depending on the seat: Saudi Arabia applies modern codification, Malaysia uses a National Shariah Advisory Council model, while other regions apply uncodified or hybrid frameworks. This can lead to contradictory awards for identical factual scenarios.

• Evidentiary Inconsistencies: Evidentiary rules (document disclosure, witness weight, oaths) vary wildly across centers, creating extreme difficulty when dealing with sensitive internal Shariah governance files or unpublished fatwas.

• Emerging Tech Gaps: Rapid developments in digital assets, green Sukuk, third-party funding, and A.I risk widening the interoperability gap unless centers proactively build a harmonized framework.

3. Strategic Roadmap: 8 Concrete Alternatives to a Rigid "Unified Code"

Instead of chasing an unrealistic and rigid unified statutory code, the global Islamic arbitration ecosystem should adopt the following multi-tiered framework:

• 1. Adopting the Saudi Civil Transactions Law as a Benchmark: The Saudi Civil Transactions Law should be utilized globally as a primary model text. It successfully codifies classical Shariah transaction rules into a highly sophisticated, modern legal language perfectly suited for international contracts and cross-border arbitration. It serves as an excellent reference for liquidated damages, exceptional circumstances, good faith, and liability.

• 2. Systematic Integration of Fiqh Academy Resolutions: Incorporating standard resolutions of globally recognized Fiqh academies. Where consensus exists, it should be binding on tribunals; where scholarly divergence exists, the qualified arbitrator must balance and select the closest fit to the transaction's economic objectives, detailing the rationale in the award.

• 3. Enforcing A.A.O.I.F.I Standards for Financial Disputes: Formally adopting the Shariah and Accounting standards of the Accounting and Auditing Organization for Islamic Financial Institutions (A.A.O.I.F.I) as the default substantive rule for all Islamic banking, Sukuk, and investment disputes.

• 4. Synthesizing a Cross-Border Substantive Common Law: Building a comprehensive substantive framework that blends the Saudi Civil Transactions Law, Fiqh academy resolutions, A.A.O.I.F.I standards, and established Islamic finance regulations into a unified transnational commercial reference.

• 5. Establishing an International Shariah Advisory and Scrutiny Committee: Creating a global council of eminent jurists and arbitration practitioners to issue non-binding advisory opinions on complex jurisdictional conflicts, which can be made contractually binding if the parties explicitly agree.

• 6. Standardizing Cross-Border Institutional Procedural Rules.

• 7. Launching a Global Roster of Islamic Finance Arbitrators & Experts: A meticulous registry categorizing professionals by exact technical specialties (e.g., Sukuk experts, Mudarabah specialists, experts in Saudi Law, Malaysian Law, Sudanese Law, etcetera) to replace arbitrary selections based on generic reputation.

• 8. Constructing an International Registry for Judgments and Precedents: Formally cataloging annulment decisions, enforcement orders, and redacted institutional awards to eliminate surprise rulings and anchor commercial expectations globally.

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