March 29, 1996, Geneva, Switzerland
Mediation as a Means for
Amicable Settlement of Disputes in Arab Countries
by Salah Al-Hejailan ,
Chairman, Higher Board, Euro-Arab Arbitration System,
Law Firm of Salah Al-Hejailan
(Riyadh & Jeddah, Saudi Arabia)
As may be understood, there was not any formal judicial system in the Arab World before the rise of Islam. Disputes which arose between the members of a tribe were customarily settled by referring the disputes to the leader of the tribe. In resolving disputes, the leader always resorted to amicable means, including mediation. The leader endeavored to reach a solution of a particular dispute in such a way as to maintain solidarity among his people on the one hand and to maintain his honorable position on the other hand.
Moreover, because of the commercial and trading relations among these Arab tribes, it was found necessary to conduct dealings and to settle disputes arising out of those dealings in a flexible manner. Accordingly, certain forms of conciliation or mediation and arbitration came to be known and were applied by these tribes since early times.
As the rise of Islam was accompanied by a call for peace, it was only natural for Islam to call for settlement of disputes in an amicable manner. We therefore find that Islamic law includes express provisions relating to amicable settlement of disputes.
Based on the above, one may say that amicable means for settlement of disputes, particularly commercial disputes, are deeply rooted in Arab customs and traditions and have long been implemented in practice. In Islamic jurisprudence, mediation and arbitration are considered preferable to litigation before courts of law. Moreover, arbitration is an alternative very near to mediation, in that the arbitrator also assumes the responsibilities of a mediator.
One characteristic of the Arab community is the confidential treatment of internal disputes. A firm belief still prevails that divulgence of these disputes, and in particular those relating to family matters or family companies, is apt to prejudice the reputation of the family and the traditions of the Arab community. Owing to this attitude, parties to any dispute try their best to reach an amicable settlement through the elder members of the family. If no such settlement is possible, and if the parties decide to refer the matter to arbitration or to court, they may still ask their legal representatives to seek an amicable solution so as to avoid, to the extent possible, publicity of the matter.
As you may all know, Saudi Arabia applies Islamic law and has also already achieved a legislative and judicial development in line with contemporaneous judicial systems. If we now consider the customary rules in the Saudi Arabian practice, we find that the amicable means for settlement of disputes have priority over other means. This may be exemplified as follows:
1. When a claim is filed with the emirate or governorate, whether by a Saudi national or a foreigner, its advisory council endeavors to find an amicable solution through mediation, failing which the matter will be referred to a competent court.
2. Before considering any claim, judges in the Sharia courts or the commercially-oriented Board of Grievances always ask the conflicting parties to try for an amicable settlement, as such settlement is the ultimate object to be achieved through Islamic tribunals. The established Sharia principles call for amicable settlement except where such a settlement invalidates a matter which was originally valid or vice versa.
3. The Chambers of Commerce and Industry in the Kingdom play an important role in solving commercial disputes through conciliation and arbitration. These disputes include commercial papers disputes before filing the protest and also bankruptcy disputes (although there are recently promulgated regulations relating to court organized preventative settlement in bankruptcy matters).
4. Likewise, the Committee for Settlement of Banking Disputes as well as the committees in charge of labor disputes and the committee for consideration of trademark disputes tend to urge the parties to reach an amicable solution before proceeding with any such dispute.
5. It may also be noted that a special committee has been constituted at the Ministry of Commerce for resolving through conciliatory means disputes arising out of commercial agency agreements. This is intended to save time and effort and to avoid any negative impact on important economic interests.
The practice of resolving disputes through amicable means has also been recognized in modern legislation by the issuance of the Saudi Arabian Arbitration Regulations and Implementation Rules, which are relatively recent enactments applying primarily to domestic cases.
The practical implementation of amicable settlements has produced good results. Many cases have actually been solved through mediation. In some of these cases, my law firm has played a significant role, due to my own conviction that mediation and arbitration are the quickest and most reliable ways for resolving commercial disputes, especially those relating to international trade. I also believe that a partial waiver of a partys rights or interests in any settlement process is generally better for the party than litigation before a court of law regardless of the possibility of winning the case through the court.
In this connection, I would like to highlight some of my personal impressions about the feasibility and working of the conciliatory means for settlement of disputes, based upon my practical experience in the application of these means:
1. The referral of a case to mediation or arbitration depends, for the most part, on the degree of publicity of the particular dispute. As previously explained, the Arab community tends to place a screen before the differences occurring between its members. However, if optimal screening is not possible, then amicable settlement would, before taking the case to a court of law, be the appropriate alternative to total screening.
2. Settlement is normally concluded between parties of unequal legal position or social standing, i.e. a strong party and a less strong one, or between a rich party and a less rich party. Family influence and economic weight are among the factors which may affect ones decision whether or not to agree to a proposed settlement. I have observed that an offer to settle is normally refused when the parties are of the same standing. In such a case, the parties prefer to take the matter to a court of law, whatever may be the outcome. In their view, a court decision is preferable to a waiver in favor of an equally aggressive litigant.
3. Parties in the Arab World often do not opt for amicable settlement except in the last stages of the dispute and after they have fully explained their view points. This tactic is followed so that each of the parties may have secured for itself a strong position when the case is being discussed. In other instances, mediation does take place, however, before the financial damage has actually occurred. Particularly in the West the organizational structure and technical support that American corporations have developed equip them to determine areas of potential disagreements in commercial matters, allowing for mediation at an early stage
4. I have also noted that the party in default does not normally prefer to settle through mediation. Such a party would rather have the case decided by a court of law so as to avail itself of the extensive procedure before the judicial tribunals. If the case is not decided in its favor, it seeks to avoid execution until the other party has been forced to abandon its case.
5. Even in the West, mediation is recognized but it is not well known, and parties do not resort to mediation easily because of auditing requirements and because the management currently in charge would like to distance itself from actions taken by the previous management. The new management prefers the objective nature of a judicial decision or arbitral award. Moreover, it is also characteristic in the West that the management in charge at the time of making the agreement in dispute also does not have the tendency to mediate, because of business pride or arrogance.
6. When the parties to a dispute are frightened, for one reason or the other, of appearing before a court of law, they often prefer the conciliatory means to proceeding before that court.
7. The mediator is normally a person of a prestigious social standing who is known for his thorough knowledge, honesty and impartiality. Seniority and respect for elders are particularly resonant in the Arab World. Such a person enjoys the respect of the disputants who invariably feel satisfied with any award he may deem appropriate.
8. As regards the mediators becoming an arbitrator, while nothing strictly prevents this sequence from taking place in the Arab World, as a practical matter it is not an advisable step if one wishes to lessen any future obstacles to compliance or enforcement of the arbitral award.
Time does not permit me to elaborate further on the importance of mediation in the Arab World as a means for amicable settlement of disputes. Generally, mediation may be described as a speedy, flexible and an inexpensive means for resolving a dispute, with the least degree of publicity. These characteristics tend to mitigate the gravity of the case in issue. Moreover, while maintaining his objectivity, fairness and trustworthiness, a mediator performs his duties in a diplomatic manner and this helps greatly in understanding the varying view points and narrowing the differences between the parties.
The most significant characteristic of mediation is that mediation often results in a settlement acceptable to both parties. This characteristic enables the parties to resume their previous relations in a cordial atmosphere, with each party looking to the future prospects of the business. On the other hand, court decisions are unlikely to achieve the same objective, and this may have a negative impact on the conduct of trade at a time where trade barriers are being removed and a new horizon is opening for fair international competition.
I think the American statesman and lawyer, the Honorable Eliot Richardson, has said it best in a publication of the Euro-Arab Arbitration System:
"To pursue a lawsuit is to gamble on victory. To elect conciliation is to seek fairness. Victories undermine relationships. Fairness strengthens them. Those who build for the long term would do well to choose conciliation."