Islamic Arbitration: A New Path for Interpreting Islamic Legal Contracts

I. INTRODUCTION Muslims living in a secular, liberal democratic state face a fundamental dilemma: reconciling the obligation to live according to Shari'a1 with their civic duty to follow secular laws.2 Muslims attempt to resolve this dilemma in a number of ways. Some enter public office and try to influence the generally applicable laws of their country. Others advocate greater legal pluralism, thus allowing Muslims to settle certain disputes under Islamic law. In Canada, for example, the Islamic Institute for Civil Justice (IICJ) announced plans to create Shari'a tribunals and claimed that it would begin arbitrating family and commercial disputes according to Islamic law.3 Other Muslims incorporate the laws of Shari'a into their daily affairs and attempt to structure their private and professional lives in accordance with the values of their faith.4 Through contract law, Muslims can arrange marriages, divorces, child custody disputes, financial investments, wills, and professional relationships in accordance with Islamic law. In this way, Muslims can accomplish their dual obligation: to abide by Shari'a and to help ensure that other Muslims do so as well. Judicial interpretation and enforcement of contracts that incorporate religious law, however, can raise constitutional problems, especially when the religious law is unfamiliar to most U.S. judges. Consider the following two examples. Two parties draft a contract in which the buyer agrees to purchase ten bushels of wheat from a farmer. The contract authorizes the farmer to deliver the wheat in two months time, and the buyer agrees to pay the market price for the wheat at the time of delivery. The contract stipulates that Shari'a governs the rights and obligations of the two parties. A month before the anticipated wheat harvest, the price of wheat increases and the buyer wishes to void the contract, arguing that the contract violated the prohibition of gharar5 (uncertainty) because it did not specify the price for the wheat. The seller disagrees and sues the buyer for breach of contract. A judge presiding over this dispute would first turn to state contract law to determine whether there is a valid contract and what the precise terms of the contract are. Assuming a contract exists, the judge must ascertain the intent of the parties. Since the two persons explicitly stated that they wish Islamic law to govern their contractual obligations, the judge would then determine whether the existence of gharar would allow one party to void the contract under Islamic law. Finally, the judge would have to decide whether the slight uncertainty created by the small fluctuations in wheat prices would violate the prohibition of gharar, thus allowing the buyer to void the contract. This is a difficult task for judges who may be unfamiliar with Islamic law. More significantly, as argued in this Note, such a task may require a judge to overstep her First Amendment constraints. In the second example, a Muslim man and woman sign a prenuptial agreement stating that upon the husband's divorce of his wife under Islamic law, the husband will pay the wife a certain amount of money. The contract further clarifies that a divorce shall be binding under Islamic law upon the declaration of the triple talaq.6 Five years later, in a state of rage, the husband declares: divorce you; I divorce you; I divorce you. After the husband calms down, he apologizes and asks for forgiveness. The woman, believing that her husband has lawfully divorced her under Islamic law, divorces him in state court and sues for specific performance of the contract. The judge must decide whether the condition precedent to the contract, the declaration of a triple talaq, had occurred. Ultimately, the judge would have to decide whether the excited utterances of the phrase divorce you count as a single talaq or as a triple talaq under Islamic law. Adjudicating these contract disputes raises significant constitutional and pragmatic concerns, which courts and the academy have not adequately recognized. …

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