Traditionally, the preferred method for settling disputes has been the Sulh, which means resolution or fixing, and emphasises the importance of religion.5 Thus, disputants in the Middle
East have traditionally preferred building personal relations by socialising and settling disputes through continued negotiation.6 This reflects the larger cultural perception of conflict as a
disruptive agent in society which members must collectively avoid.7 It follows that dispute
4 For a comprehensive analysis of this framework, see M Al-Ghamdi and PJ Neufeld, ‘Saudi Arabia’ (2018) 10 The Dispute Resolution Review < https://thelawreviews.co.uk/edition/the-dispute-resolution-review-edition- 10/1166494/saudi-arabia> accessed 14 November 2019.
5 W Iqbal, ‘Courts, Lawyering, and ADR: Glimpses into the Islamic Tradition’ (2008) 28 Fordham Urban Law Journal 1035, 1037-1038. See also GE Irani, ‘Apologies and Reconciliation: Middle Eastern Rituals’ in E Barkan and A Karn (eds), Taking Wrongs Seriously: Apologies and Reconciliation (Stanford University Press 2006). 6 RMG Tirados, ‘Negotiation’ (2010) 48 Management 849, 1023-1027.
7 M Abu-Nimber, ‘Conflict Resolution Approaches: Western and Middle Eastern Lessons and Possibilities’ (1996) 55 American Journal of Economics and Sociology 35, 36.
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resolution systems that require the parties to act as adversaries are shunned in this society.8 Negotiation is an interest-based approach that provides advantages to parties seeking to resolve insurance disputes by concerting their interests rather than acting as adversaries. However, despite the traditional role of negotiation in Saudi society, it is surprising that at the beginning of this century, the Sulh was only invoked in rural areas that had few courts and government officials.9 Hence, this dispute resolution option also has serious shortcomings. The advantages and shortcomings are discussed here under five criteria for judging the quality of a dispute resolution option.
4.3.1.1 Cost and Duration
This form of ADR was preferred to litigation in the KSA because it avoided a cycle of revenge and affirmed the bonds between groups.10 It is also a cost-effective and swifter process for settling disputes than litigation in courts and administrative tribunals. The parties agree on a form of joint action which they both undertake to manage and resolve the dispute. This demonstrates that negotiation is the best option when it becomes clear to the parties that unilateral action through the courts or tribunals would impose a heavy toll on both sides. With negotiation, the working relationship is preserved, and the medium-based commercial benefits of each party is taken into account when solutions are considered.11
The parties are not required to involve an outside party thereby saving the cost of hiring the services of the third-party neutral. This also implies that delays caused by the dispute are reduced, thereby making this resolution option less expensive. It must however be noted that a party may use negotiation as a stalling tactic in order to prevent the other party from enforcing their contractual rights through rights-based options such as arbitration or litigation. This may turn out to be more expensive for the party that eventually asserts its rights through arbitration or litigation.
8 Ibid.
9 See M Gopin, Holy War, Holy Peace: How Religion Can Bring Peace to the Middle East (Oxford University Press 2002). The Holy Prophet noted that Sulh is allowed except in cases where it enables a party to make ill- gotten gains. (4: 128). In the KSA, some agreements between defendants and plaintiffs have been enforced as Sulh contracts such as where the defendant admits the plaintiff’s claim and agrees to pay a specified amount of money to settle a debt or end the conflict. See EA Alsheikh, ‘Distinction between the Concepts Mediation, Conciliation, Sulh and Arbitration in Shari’ah Law’ (2011) 25 Arab Law Quarterly 367, 372-373.
10 Iqbal (n 5) 1037-1038.
11 SB Goldberg et al, Dispute Resolution: Negotiation, Mediation and Other Processes (Aspen Publishers 1999) 22.
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4.3.1.2 Shariah Compliance
As noted above, disputants in the Middle East have traditionally preferred building personal relations by socialising and settling disputes through continued negotiation. As will be shown below, the Prophet and early Muslims promoted dispute resolution outside of the public court system. Hence, the outcome of negotiation is likely to be Shariah-compliant where the parties are Muslims and associated with one another in a common endeavour. They work together towards settling differences in a manner that complies with the Shariah. Although they may or may not agree to select a revered or respected individual in society to help them negotiate, where they select such an individual, he or she is likely to be devoured Muslim. The individual focuses on enhancing the relationship between the parties and declares a hudna or truce and seeks an outcome that maintains the integrity, status and honour of both parties.12 The neutral party is able to achieve this outcome because he is highly respected, and people often hearken to his or her words.
Thus, the objective of negotiation is to achieve an outcome that may not otherwise be achieved by unilateral action.13 The outcome is likely to more Shariah-compliant than the decisions of
arbitrators who may be based outside of the KSA. It must nonetheless be noted that the parties are not required to choose a devoured Muslim as negotiator. Also, the parties are free to enforce contracts that are not Shariah-compliant. Hence, negotiation does not compel the parties to comply with the Shariah.
4.3.1.3 Impartiality
No party may be expected to use negotiation to obtain an unfair advantage. This is because this dispute resolution option is voluntary. The parties cannot be compelled to participate in a negotiation by the contract or legislation. A party’s participation may therefore be contingent on the existence of adequate safeguards against inequities in the process. Also, the parties may accept or reject the outcome or simply withdraw from the process at any time if they believe their interests are being undermined. As noted above, the outcome may be reached with the help of a third-party neutral. However, there is no guidance on the eligibility, competence and impartiality of the third-party neutral who is chosen to act as negotiator. Pretorius argues that
12 See N Yassine-Hamdan and FS Pearson, Arab Approaches to Conflict Resolution: Mediation, Negotiation and Settlement of Political Disputes (Routledge 2014) 45, 270. See also D MacEoin, ‘Tactical Hudna and Islamist Intolerance’ (2008) Middle East Quarterly 39, 39-40.
13 MZM Nor, ‘Settling Islamic Finance Disputes: The Case of Malaysia and Saudi Arabia’ in A Koppel, Matter M and Palmer V (eds), Mixed Legal Systems, East and West (Ashgate 2015) 267, 270.
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this form of ADR has not been very successful because parties are often too partial and emotionally invested to make rational and objective decisions.14 Also, the effectiveness of negotiation largely depends on the cultural background of the parties.15 It is more likely to be effective where the parties are locals or resident in the KSA. They may easily deal with each other directly or through respectable advisors in the local community. Where foreign parties are involved, the process of negotiation may be less effective, especially where the dispute involves more than just a misunderstanding.
4.3.1.4 Flexibility
It may be argued that this is the most flexible dispute resolution option. This is because there are no prescribed rules and the parties are free to adopt any rules to guide the process. Also, since only the parties and their representatives may be involved, the negotiation may be shaped in accordance with the parties’ interests. The parties are also free to determine the subject matter, location of the negotiation, and set a timetable for reaching an outcome that is acceptable to both parties. Thus, where the parties negotiate in good faith, they may design the process and determine an outcome that reflects their interests and needs. For example, where the dispute is highly sensitive in nature, the parties may exclude all persons with no interests in the matter thereby preserving the confidentiality of the process.
It must however be noted that there is no guarantee of the good faith of any of the parties. Thus, since there are no guidelines on procedures, the weaker party may be at a disadvantage. This may make the outcome subject to future challenge through a rights-based option where the weaker party may seek to assert his or her rights.
4.3.1.5 Predictability
Given that negotiation is an interest-based option, the likelihood of a successful outcome for both parties is high. This is because the parties are free to shape the process in accordance with the interests and needs. However, there is no timeframe within which negotiation must be concluded. Also, a party cannot be compelled to continue negotiating or to accept the outcome. Hence, there is much uncertainty created by the fact that any party may terminate the negotiation at any time, regardless of the time and money invested by the other party. It is
14 P Pretorius, ‘ADR: A Challenge to the Bar for the 1990s’ (1990) 1 Consultus 38, 38.
15 See CH Tinsey et al, ‘The Interplay between Culturally-and Structurally-based Mental Methods of Intercultural Dispute Resolution: West Meets Middle East’ (2011) 16(3) International Negotiation 481, 481-510.
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therefore not surprising that despite the advantages of negotiation and its traditional role in Saudi society, at the beginning of this century, the Sulh was only invoked in rural areas that had few courts and government officials.16 The absence of any official guidelines makes it difficult a foreign party to previse the dispute resolution process. There is no requirement or even expectation of predictability and consistency in the way in which negotiation should be conducted. Hence, it is less appealing to a policyholder seeking to compel an insurance company with stronger bargaining power to pay.