The Ruling on the Condition of Arbitration in Commercial Contracts

Question:
The questioner says: Today, in many commercial contracts, the principle of arbitration in the event of a dispute is frequently stipulated. The form of this is that if a dispute arises between the contracting parties, each party nominates a person to judge on their behalf, and they agree on a third person to serve as the head of the arbitration committee. Their ruling is by majority and is binding on both parties, and the three arbitrators receive their arbitration fees from the parties to the contract. What is the ruling on this? Are there any guidelines? Are there any Sharia guidelines for this?

Answer:
This is not permissible. Some of the Bedouins did not do this. This is not permissible. As for reconciliation and mutual agreement between them, there is nothing wrong with it. But for judges to rule or to impose a decision, that is not permissible, except for the judges of the Shari'ah, the Sharia courts. As for ignorant people who rule by desire or custom, the custom of the state or the tribe, that is not permissible. Rather, it is obligatory for them to return to the law of Allah, unless they reconcile by mutual agreement, in which case there is nothing wrong with it. Some of them may forgive others, whether within the tribe or outside it. They may advise them to reconcile, agree, and be lenient regarding a strike or the like. There is nothing wrong with reconciliation and agreement without compulsion. As for compulsion, that is for the Sharia courts.