Should Western Corporations Ban the Use ofShari’aArbitration Clauses in their Commercial Contracts?

Albert D. Spalding Jr., Eun-Jung Katherine Kim

Journal of Business Ethics · 2015 · Volume 132 · Issue 3

Abstract

In recent years, there has been an increase in the adoption ofShari’ain Europe and North America as an arbitration protocol for the resolution of potential contractual disputes. In a largely secular Western business environment, this reality raises corporate policy implications for business organizations. In particular, questions are raised about whetherShari’ais by nature too unpredictable—and too dismissive of women’s rights—to be properly and ethically permitted by Western companies as a possible dispute resolution alternative. This article examines the dynamics and factors that are involved as corporate managers decide whetherShari’aarbitration ought to be banned entirely from contractual negotiations. Arguments for and against the inclusion of aShari’aarbitration clauses in commercial contracts and contract negotiations are presented. The article concludes that while managers should exercise great prudence and consider the moral implications of negotiating arbitration clauses, an organizational ban of the use of faith-informed arbitration generally, orShari’ain particular, would be neither morally required nor optimally serve the interests of the organization or its stakeholders.

Keywords

Shari’a, Arbitration, Faith-Based, Islam, Muslims, Multiculturalism

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