Sharia Law and Commercial Arbitration in Saudi Arabia: Challenges and Opportunities

ABSTRACT

This study investigates the impact of Sharia law on commercial arbitration in Saudi Arabia, focusing on the challenges and opportunities within this unique legal framework. Rooted in Islamic jurisprudence, the Sharia-based arbitration system presents significant complexities in balancing doctrinal authenticity with the demands of international commerce. Through a qualitative approach, this research engaged six experts in law, arbitration, and Sharia principles, employing thematic analysis to uncover insights into the interplay between Sharia and modern arbitration practices. The findings reveal five major challenges, including public policy limitations, constraints on party autonomy, doctrinal ambiguities, enforceability of awards, and procedural uncertainties. These barriers highlight the tension between Sharia principles and global arbitration standards, which often deter international stakeholders. Conversely, the study identifies significant opportunities, such as Saudi Arabia’s potential for global leadership in Sharia-compliant arbitration, the modernization of legal frameworks, the attraction of foreign investment, and the integration of best practices with inherent Sharia flexibility. This research contributes to the understanding of how Sharia law shapes arbitration in Saudi Arabia, offering valuable insights for policymakers, legal practitioners, and stakeholders. It underscores the need for reforms that harmonize religious principles with international norms, enabling Saudi Arabia to establish itself as a global hub for ethical, culturally sensitive arbitration practices. These findings align with the Kingdom’s Vision 2030, which seeks to integrate economic diversification with a robust and globally competitive legal framework.

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