In the first of two articles, Mark Raeside looks at ways of resolving disputes for those working in the Middle East. Here he examines mediation – so good it even has divine blessing

As British developers, contractors and construction professionals increasingly turn to the Middle East for work, an understanding of Sharia law and how it relates to dispute resolution is becoming vital.

Although commercial construction mediation can be dealt with as a comprehensive system across the Middle East, arbitration is more complex and variable.This article will cover mediation, both in its own right and as a preliminary step towards arbitration, should settlement not be possible. The second article will deal with Islamic arbitration.

Generally, UK construction companies should not be concerned about a “foreign” dispute resolution process when it comes to mediation or conciliation in the Middle East. Islamic law has known these as viable and popular procedures for resolving commercial construction disputes pretty much from the outset of Islam. The process is well instituted and has existed in a refined form for a lot longer than we have known the process in Britain. The only real binding principle is to take part in the process if that was agreed and have regard to the need for it to be just and fair.

As with our English common law, Islamic jurists do not differentiate between conciliation and mediation as they are both techniques which are supposed to lead to an amicable, consensual settlement of a dispute. In this regard, English contractors will feel more at home than their European civil law contemporaries, who differentiate between the two processes.

All types of Islam permit mediation or conciliation of commercial construction disputes. The Koran and Sunna actively invite conflicting parties to come to an agreement. For example, the Sura Al-Nisa verse 128 says: “An amicable settlement is best.” Verse nine of the Sura Hujurat says: “If two parties among the believers fall into a quarrel, make peace between them with justice and be fair, for God loves those who are fair and just.”

Provided the subject matter of the dispute is civil – that is, not criminal – mediation is acceptable by all the different branches of Islam across the Middle East without restriction: thus included are property disputes, debts, sales and all commercial matters.

It would therefore be perfectly common for all the usual construction disputes to be placed before a mediator (or conciliator) who is required to apply two of the well-known tenets of mediation – justice and fairness – to achieve a binding settlement agreement that could then be enforceable as with any compromise agreement.

Provided the subject matter of the dispute is civil, mediation is acceptable by all the different branches of Islam without restriction

This is an important alternative dispute resolution technique that those working in the Middle East should accept as a proper procedural Islamic process to resolving any construction dispute.

It is common in my experience in countries such as Egypt that the parties will first attempt a mediated settlement before reverting to arbitration. Indeed, it is common to see construction contracts containing an agreement to some alternative dispute resolution process prior to arbitration.

Under Sharia law, parties are required to honour their agreements and this general rule covers all agreements including an agreement to mediate prior to arbitration. The prophet Mohammed stressed in the Hadith that “believers should honour their engagements”.

As with the English common law approach to mediation, the process in the Middle East under Sharia law is consensual and if no agreement is reached neither party is bound. The only imperative is to proceed on “a fair and just basis” to attempt to reach agreement.

By comparison to family disputes under Islamic law, verse 35 of the Koran Surah Al-Nisa says: “If they wish for peace, Allah will cause the conciliation.”

Thus it is the parties that seek to settle their dispute not the conciliator or mediator. Mediators have no jurisdiction under Islamic Sharia law to issue a binding decision. All mediators can and must do is to assist the disputing parties to reach a fair and just settlement.