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Islamic Law And Its Impact On Arbitration Of Ip Cases

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Published: Fri, 23 Feb 2018

Islamic Law And Its Impact On Arbitration Of Ip Cases In Middle East With Special Reference To Jordan

Introduction

The law of intellectual property is one of the areas of law that has emerged in Jordan relatively recently. The reasons for such late emergence of intellectual property law in Jordan are that there were no sufficient conditions for development of this area of law in this jurisdiction.

Due to this fact, courts in Jordan were hardly able to decide such cases because of their complexity and lack of necessary skills and knowledge of judges in respected area of law. It is for this reason it seems that Jordanian legal practitioners saw the necessity of establishing courts which would adjudicate such cases.

The law of intellectual property is one of the areas that pose several challenges to trade area, where sellers of unauthorized products or products which breach intellectual property rights are widespread. It is inevitable truth of most Arab countries and in this respect it seems that position of intellectual property legislation saw its goal.

Some would ask: Why would Jordan need intellectual property law at all? It does not have such potential in order to enforce such complicated legislation and procedures. The answer lies in increasing importance of Jordan as a financial and trade center of Middle East, which would compete and challenge such centers as U.A.E. and Qatar.

In order to ensure such position in market, Jordan, first, has to ensure that legislation is in harmony with international trade and financial legislation. Amidst them, intellectual property law, if not most important, but occupies significant place to such an extent that it has to increase awareness and skills in this area.

Simultaneously, one of the important and flexible methods of alternative dispute resolution as arbitration has to play here crucial role. Arbitration is one of the areas of alternative dispute resolution, necessity of which has increased along with globalization of international trade. It has been seen as one of the areas which can significantly simplify international trade procedure without bringing unsolvable complexities into the business which has already gone into complexities.

The arbitration of cases related to intellectual property is different and complicated matter, which cannot be explained with reference to arbitration of normal and common cases that emerge in the course of international or local trade. It requires lawyers which are not only fluent but also skilled in matters of IP law and practice. Such lawyers, the amount of which is few in Jordan, can be and should be trained in this area in order to ensure the integrity of arbitration procedures in IP cases.

As a rule, majority of companies and lawyers cannot trust to state courts, which would consider intellectual property cases along with ordinary cases and are subject to inevitable error by doing incorrect analogies in decision of such cases. Usually parties which address their cases to state courts are usually unsatisfied not only with level of knowledge of judges in intellectual property cases but also with complexity of procedure.

In this sense, one should realize the importance of arbitration methods for adjudication of intellectual property cases. Jordan, it seems, have realized the serious threat posed by this problem and have taken number of measures in order to respond to this challenges.

One of the notable measures is certainly sending law students abroad in order to prepare future judges specialized on intellectual property disputes. This has been done effectively and majority of students are in prominent institutions which are really strong in this area of law. Second is creation of respective legislation in this area, yet there are some gaps which are inevitable and these gaps should be filled in order to harmonize Jordanian legislation in the field of arbitration and IP law.

Jordan has examples to learn from and it is its closest neighbors such as U.A.E., Qatar and Bahrain. These countries have foremost skills and experience in these fields of law. It is not only explained by abundance of their experts but also rapid expansion of their economies and integration into the world economy.

In this respect, Jordan is in more convenient position than other countries since even the culture of its neighbors is identical to Jordan. The similarity in culture and tradition is one of the factors that make harmonization of Jordanian IP legislation much easier and painless.

Besides, the lack of experience and knowledge not only in IP law, but also in arbitration process in IP case makes Jordan vulnerable to the challenge posed by the legal world of these neighbors. It is for this reason; the necessity of this dissertation is realized.

There is also Islamic factor that raises issue. Since Jordanian constitution recognizes Islam as a religion of state and due to historical circumstances when Islamic law dominated Jordan for centuries, it raises question: Has Islamic law influenced emergence and development of arbitration in Jordan as well as of intellectual property law?

In this respect, Akhtar remarked: “there exist considerable variations in the Middle East on the incorporation and application of arbitration laws and the practice and procedure in enforcing arbitral awards, which are complicated further by the differing interaction between Shari’a law and Western systems of law in each country”.

Therefore, the major goal of this dissertation is to examine whether Islamic legal principles in fact had an impact on development of arbitration and intellectual property law in Jordan. It will be tested on the basis of case related to IP law decided in arbitration courts of Jordan. The importance of this topic is realized in the context of rising importance of Jordan as emerging economic and financial leader in Middle East. It is also realized due to the fact that Islamic law is a dominant system in contemporary Middle East.

This dissertation consists of four parts: (i) first chapter briefly examines the basic tenets of Islamic law; (ii) second chapter briefly examines arbitration system in Jordan; (iii) third chapter briefly analyses intellectual property law in Jordan; and (iv) final chapter, an important one scrutinizes Jordanian intellectual property disputes arbitration for compliance with Islamic law.

Overview Of Jordanian And Islamic Law

Jordan is one of the countries in the world that inherited several features of different legislations at a time. One of the major influences was Ottoman legislation, since Jordan was under their dominancy for almost 700 years. In this respect, it can be said that it has been influence not only by Islamic law, which was the law of Ottoman empire but also by features of unique Ottoman law, which coexisted in one line with Islamic law.

Legislation And Judicial System In Jordan

Once Jordan became a subject of European colonization in 19 century, it inevitably embraced some features of European legislation. Yet, at present time, Jordanian legislation is surprising mixture of European and Islamic elements.

The system of government in Jordan is parliamentary monarchy. Yet, it should be noted that monarchy in Jordan is almost absolute since all powers are vested in the King of Jordan who is considered to be direct descendant of Prophet Muhammad (S.A.V.)

As in other countries of the world, the power in Jordan is divided into three branches, namely, legislative, executive and judicial. However, unlike other countries King may interfere within functioning of legislative power or other in order to ensure his absolute status.

The constitution of Jordan openly declares Islam as the religion of state. However, upon the close examination of Jordanian legislation, one cannot call it Islamic state since it contains elements which are contrary to Islamic legal principles.

Unlike Saudi constitution which declares Islam as a source of law, Jordan constitution declares Islam only as a religion of state. It is, however, not clear what it implies. Nonetheless, one can see the consequences of Islam being declared as a religion of state, in the legal system, where there is duality of courts.

Jordanian courts are divided into secular and religious courts. While religious courts are not only Islamic but also ecclesial or Christian courts, which are free to decide family matters of their respective religious communities. The competence of religious courts, including Islamic, are not extended to the matters of commercial and administrative law.

Therefore, matters pertaining to commercial or administrative law are decided in secular courts. Officially, Jordanian constitution declares that there are three types of courts: (i) civil courts; (ii) religious courts; and (iii) special courts. Yet, civil courts also hear criminal cases along with civil cases and cases of administrative field.

Religious courts are divided into Islamic and courts of other non-Muslim communities. Both of them hear cases within scope of their competence. It is interesting that Sharia courts also hear cases which are related to the compensation of blood money where one of the parties are not Muslims. Compensation of blood-money, otherwise called diya, is one of the old features of Islamic criminal law and it is surprising that it is not in competence of secular courts but religious.

The constitution does not define how special courts function, leaving this matter to the law. Yet, there are tribunals which are designed to interpret law and one of them is High Tribunal, the purpose of which to interpret constitution when required by government.

It is also necessary to provide brief overview about Shari ‘a, which occupies significant position in Jordanian legislation. Shari’a, otherwise called Islamic law, is one of the ancient systems of law that has been preserved since 7 century A.D. with some modifications.

The sources of Shari’a, according to Muslim belief, are Qur’an and Sunna. First being Holy Book of Islamic religion and second are traditions or precedents of Prophet of Islam. Besides, official Islamic dogma declares that Islamic jurisprudence functions according to four sources of law, Qur’an, Sunna, ijma and qiyas. Ijma, otherwise called consensus is being interpreted differently by four schools of Islamic law and same goes with qiyas, which is otherwise called analogy. Four schools of Islamic law that has emerged at different periods of time during first century of Islam, mainly diverge upon interpretation of major or secondary sources of Islamic law.

Islamic law does not recognize freedom of contract and prohibits such elements of trade and economy as charging interest, fortuity and gambling. In order to comply with these principles, Islamic lawyers has developed certain methods and forms which would allow Muslim to operate in one or another way in business world.

One of the remarkable features of new Islamic jurisprudence is creation of Islamic banking, which replaces interest with profit-and-loss sharing concept, Islamic insurance that operates in almost similar fashion and other new concepts as Islamic bonds, otherwise called sukkuk.

As far as intellectual property concerned, Islamic law protects inviolability of property as well as its manifestations in different forms. The same applies to any form of intellectual property, be it trademark or invention.

Arbitration in Islamic law is unique, since arbitration has been inherent to Arab culture and was called hakama. Hakams were arbitrators in ancient Arabia and judged according to Arab customs and traditions. Therefore, there is nothing new in arbitration which is not familiar to Islamic lawyers.

In last century, the position of Islamic law in disputes that were decided in arbitration courts was widely ignored. It is evident from several cases. In Petroleum Development (Trucial Coasts) Ltd. V. Shaikh of Abu Dhabi, Lord Asquith, the arbitrator ironically observed: “…it would be fanciful to suggest that in this very primitive region there is any settled body of legal principles applicable to the construction of modern commercial instruments”.

Another remark, done by arbitrator in Ruler of Qatar v. International Marine Oil Company Ltd., was bitterer and arrogant: “…I am satisfied that the [Islamic] law does not contain any principles which would be sufficient to interpret this particular contract”.

Such excesses and bitter remarks were summed up and characterized in the following terms: “In general, the legal community throughout the Arab world is still manifesting its hostility to transnational arbitration mainly as a result of the great publicity devoted to the criticism of certain unfortunate arbitral awards rendered as of 1951 by western arbitrators who excluded, with terms of a humiliating nature, the application of the national applicable legal systems of countries like Abu Dhabi or Qatar”.

It should be also noted that Jordanian legislation does not fully implement precepts of Islamic law such as prohibition of interest or insurance. There are banks and insurance companies in Jordan which operate according to Western principles of banking and insurance. The companies and banks in Jordan are free to operate in the mode they choose to be most efficient for them. There is no hindrance on the part of Jordanian government in this sense.

Defining Islamic Law

There is no single or unified definition of Islamic law. Various scholars offer various definitions. I shall not go into each definition offered but shall arbitrarily explicate some of them. One of the famous scholars of Islamic law, Joseph Schacht offered an interesting definition for Islamic law: “Islamic law is the epitome of the Islamic spirit, the most typical manifestation of the Islamic way of life, the kernel of Islam itself”. Goitein, it seems, offered more precise and comprehensive definition: “Islamic religion is characterised by the prominence of legal conceptions in its systems: The Shari’a, or holy law, is its very essence and Fiqh, or religious jurisprudence, is its science (‘ilm) par excellence. The minute observation of many commandments is its most conspicuous practical aspect; the free fellowship of religious scholars, who do not need authorisation by any government to interpret, develop and apply its law, is its most representative body, and even purely legal sections of the Fiqh are studied as an act of worship”. These two definitions are not exhaustive but reflect true essence of Islamic law. Schacht’s ‘way of life’ and Goitein’s ‘religious jurisprudence’ constitute what is called Shari’ah in Arabic.

Moreover, Islamic law cannot be compared with common or continental legal systems. It is because latter do deal and embrace all areas of law, whereas Islamic law mostly deal with private law, leaving aside public law. Therefore, the claim of some countries that since their legislation is based on Shari’ah, their law is being regulated by divine law is not correct. The Shari’ah only applies to matters of private law in these countries and the public law has been imported from Western models.

The majority of scholars have long been recognizing Qur’an as a major source of Islamic law, sometimes without examining what it stands for. It was Schacht who first suggested that Shafii, prominent Islamic jurist, paid merely lip-service to Qur’an as a source of law in his jurisprudential theory. Certainly, major principles of Islamic law has been deducted from Qur’an but it is only a major and in a number of cases, we discover that Muslim jurists are dependant or totally reliant on other sources rather than Qur’an without hesitation.

The holy book of Islam or Muslims all over the world, Qur’an is believed by Muslims to have been revealed via Archangel Gabriel to Muhammad, who is regarded by Muslims as both Prophet and Messenger of God. Qur’an is law but law in a spiritual sense. If you ask a Muslim: What is your law (Shari’a)? He or she would respond: “Qur’an” without realizing whether it is spiritual or actual law.

For the purposes of present study, Qur’an is a source of law but to a limited extent since a major proportion of rules and judgments is being extracted from other sources of law and via different methods of legal reasoning. It is not however realized by ordinary Muslim as such, and even by Muslim jurist, who would suggest that sources for such rulings is Shari’a and all rules, embodied in Shari’a are immutable and should not be a subject of any challenge by anyone. Before turning to critical points, it is crucial to explore basics of Qur’an.

Qur’an is the holy book of Islamic religion. It is said to have been revealed during 23 years, once Prophet Muhammed started his mission among Arab people. The Qur’an derives from the word ‘qara’ which denotes in Arabic, reciting or reading. It is also asserted that with a same meaning it is cited in Old Testament in Hebrew language. There are other names which are designed for Qur’an, such as ‘Qur’an al-Majid’ or ‘al-Qur’an ash-Sharif’ or ‘Furqan’, etc. For the purpose of present study, it shall be called Qur’an, which is rather easy to refer and this way we shall avoid confusion.

The divine legislation is said to have been established through revelation of Qur’an in stages as I have mentioned earlier. The modern scholars as well as classic jurists were still unsure about precise role of Qur’an as a source of legislation. It is not clear whether the role of Qur’an corresponds to the hierarchy where it has been hoisted to the primary position. In fact, Qur’an has never been a primary source as we understand a primacy in modern jurisprudence. Muslim jurists would often rule according to verse of Qur’an but not a principle or spirit that it implies. They would pay a lip-service to Qur’an as a source of all legislation, but in fact they would disregard those rules of Qur’an that should have been regarded in specific occasion.

The precise role of Qur’an is difficult to define; it is because the primacy of Qur’an has been overshadowed by other sources and methods of law. Qur’an has always been mentioned along with Sunna, second sources of Islamic law which we shall have occasion to discuss in the next paragraph. In order to demonstrate the position of Qur’an as a source of law, let us look at some examples of utilization of Qur’an in classic Islamic jurisprudence.

The Prophetic Traditions or hadith as called in Arabic form a second source of law in hierarchy of sources of Islamic law and jurisprudence. It does not only occupy this position indeed but sometimes shares dominancy with Qur’an. The difference that emerged between Muslim jurists and later led to establishment of schools of law was caused by diverging interpretation of Prophetic Tradition. From liberal approach of Hanafis to strict compliance of Zahiris, they all dispute on nature of Prophetic Traditions as a source of law. Sometimes their conflict went as far as one realise that it is rather absurdity than logical argument.

The word ‘ijma’, which is basically translated as ‘collecting’ or ‘assembling’, in a legal sense has caused a lot of debates over its validity. It is sometimes viewed as a consensus of either jurists or Muslims in general. Some assert that it is consensus of early Muslims – Companions over common postulates of faith and religion.

The consensus might be reached if it is unanimously adopted in practice or ‘custom’ as in the case of international law. Second, consensus might be uttered in respect of certain ruling by majority of either scholars or jurists. Finally, it can be ‘e silentio’ support for certain opinion by majority of jurists that have the right to adjudicate their independent opinion.

It is not clear from Islamic jurisprudential theory when ijma should be employed and what certain conditions are. Some jurists, Hanafi, for instance, usually in their judgments, say ‘there has been consensus on this issue’ or ‘question’ but they never clarified how and why such consensus has been reached among them.

We also do not know whether we may employ ijma concept in modern context and whether it shall be binding on all Muslims or adopted by them as a constituent part of Islamic law. In Sunni jurisprudence, we know that by way of ijma, certain jurists united into groups affiliated with dominating opinion of single jurist, which later became known as ‘schools of law’ or ‘madhahib’. It has also been asserted that ijma on common legal issues has been reached in eighth century by respective founders of ‘madhahib’; there is no way to re-visit these concepts or judgments.

When speaking of analogy principle in Islamic law, it is not clear whether it is absolute or not or whether it is logically applicable to all cases. The word ‘qiyas’ itself means ‘to compare’ and it is regarded as one of the major sources of Islamic law.

Islamic jurists themselves stipulate four predominant conditions of analogy:

  1. The precept or practice upon which it is founded must be of common (amm) and not of special (khass) application;

  2. The cause (‘illa) of the injunction must be known and understood;

  3. The decision must be based upon either the Qur’an, the Sunna, or the Ijma;

  4. The decision arrived at must not be contrary to anything declared elsewhere in the Qur’an and Sunna.

The fourth stipulation raises some concerns. As we have discussed earlier, there are a lot of contradictions between Qur’an and Sunna, and even within Qur’an and within Sunna. The jurists attempted to decide such contradictions by asserting that there cannot be hypothetically any conflicts between these sources and even within these sources; they exist and it is reality. This factor also serves as a great hindrance in deriving rules or judgments from primary sources of Islamic law.

Even though these rules has been developed and elaborated by jurists; there are still a lot of controversies with application of this principle. It is caused by a different degree of application in schools of law and conflict between jurists whether such analogy might be applied when the necessity in such application is clear. Thus, for instance, it is not clear why principle of justice embodied in Qur’an might not be equally applied to all subjects of Islamic state, be it Muslim or non-Muslim. Normally, Islamic jurist would object saying that since Qur’an is only for Muslims, its injunctions are only applicable to Muslims. There is no logic which might be applied but incoherence in reasoning, sometimes leading to absurd conclusions.

Concluding Remarks

In present chapter, we have discussed general legal conceptions that exist in Jordanian and Islamic law. There is a big difference between them because of the nature of legislation. Islamic law is mainly religious, whereas Jordanian is secular; even though Constitution claims that Islamic is a state religion.

In majority of Islamic countries, a fact that Islamic is a religion of state is merely lip-service to Islamic as a religion of people. It does not go further than that, except some countries as Iran, Pakistan and Saudi Arabia. But even legislation of these countries demonstrates how secular they are in their nature.

It does not however mean that Jordan lack of Islamic legal taste; there are some aspects of Islamic law in Jordanian legislation, as we have seen previously. The matters of marriage, divorce, inheritance and religious endowment are mainly under realms of Islamic law. Yet, on the other hands, similar matters that arise with other religious communities are decided based on their respective religious law.

However, the matters which are related to arbitration and intellectual property are mainly based on secular, precisely on European model based laws. Therefore, purpose of forthcoming chapters will be to examine whether they comply with Islamic law in general.

Arbitration System In Jordan And Compliance With Islamic Law And Its Implications For Intellectual Property Law

This chapter summarizes the current state of arbitration system in Jordan and issue of its compliance with Islamic law. It is done with purpose to acquaint readers with main aspects of these systems and legislation, so he or she has full understanding when looking through forthcoming chapters.

Arbitration In Jordan

The arbitration process in Jordan is being regulated by special law – Law No. 31 of 2001 otherwise called Jordan Arbitration Law. It is not unique; neither has it been adopted from international law, but from Egyptian Arbitration Act No. 27 of 1994, which in turn has been adopted from UNCITRAL Model Law 1985.

The law consists of 7 parts and 56 articles. It can be structured thus: (1) General provisions (Articles 1-8); (2) Arbitration agreement (Articles 9-13); (3) Arbitration tribunal (Articles 14-23); (4) Arbitration proceedings (Articles 24-35); (5) Arbitral award and termination proceedings (Articles 36-47); (6) Nullity of arbitral award (Articles 48-51); (7) Enforcement of awards (Articles 52-56).

The Art. 3 makes the scope of law absolute; it extends to any arbitration proceedings in Jordan and to any cases whether they derive from contractual dispute or not. Neither does it differentiate between commercial or civil disputes; both of them are within scope of this law.

The Art. 5 allows not only contracting parties to choose the arbitration procedure but also a third party which shall be able to choose such procedure.

The Art. 8 explicitly prohibits the intervention by state courts; yet, it stipulates that the arbitration tribunal may ask the intervention of state courts where former needs the participation of experts, witnesses, etc.

As far as arbitration agreement is concerned, Art. 9 allows only those persons, be it physical or legal, which has legal capacity, to conclude such agreement. It does not allow arbitration on matters which are on “amiable compositeaur” basis.

The arbitration agreement is valid only if in writing, according to Art. 10a, yet, the form of written agreement is flexible. It can be contained in exchange of letters, faxes, etc. It has been also reaffirmed by Jordanian Court of Cassation which stated: “the arbitration clause as established should be written, clear and explicit as well, by virtue of Article 10/A of the Arbitration Law No. 31of 2001”.

The law also allows parties to render their dispute to arbitration whilst in state court, in which case state court has the right to refer to arbitration tribunal and its reference shall be viewed as arbitration agreement in writing.

As far as arbitration tribunal concerned, Art. 14a and b, establishes that number of arbitrators shall be odd, otherwise it is void. If there is a disagreement between parties then number of arbitrators is three.

Noteworthy, the law reaffirms the independence of arbitration clause, which is according to Art. 22, is not dependent on other clause of underlying contract.

The language of arbitration proceedings is Arabic but law allows the use of another language or other languages upon consent of parties, according to Art. 28a.

Most importantly, Art. 17 upheld the principle of impartiality and independence of arbitrators and in elaboration of this provision Court of Cassation further held: “all arbitral procedures, in which the challenged arbitrator has participated, including the arbitral award, shall be deemed void”.

These are the major aspects of arbitration law in Jordan. Besides, Jordan has also ratified the New York Convention on Recognition and Enforcement of Foreign Arbitral Awards by the virtue of Jordanian Court of Cassation, where it was remarked: “It is understood from the Article (2) of Enforcement of Foreign Judgments Law No. 8 of 1952 that the foreign arbitral award which has been enforced and ratified by the forum court , shall be enforceable in Jordan in accordance with all the clauses and requirements, and does not conflict with any of the stipulated provisions of Article (7) of the said law”.

The ratification of New York Convention by Jordan should be viewed as positive development and attractive for the foreign companies who wish to deal with Jordanian companies or invest in Jordan. The same applies to IP disputes; any company which would challenge Jordanian company with the claim of breach of copyright or violation of other forms of intellectual property, are in convenience in the view of ratification of New York Convention.

However, in his study of issues pertaining enforcement, Haddad critically commented: “Turning again to Jordanian Law which provides, as has just been seen, that a foreign award must be enforceable in the place in which it was issued, which means that the award should have been reduced to a judgment in the foreign country”.

It implies that Jordanian legislation does not recognise validity of foreign judgement as enforceable in Jordan. But he noted that “this approach may be criticized since it may be difficult in practice or even impossible to achieve this goal in certain circumstances, particularly in institutional arbitration. In this type of arbitration, it may happen that the parties involved in the proceedings including the arbitrators, and all other relevant factors have no relation whatsoever with the place of arbitration except that the proceedings were conducted there. In such a case, the foreign court may reasonably reject to enforce the award rendered in its country, and that means that the award may not be enforced in Jordan either”.

In such dubious situation, it is unclear how Jordanian legislation on arbitration would cope with this kind of problem. It seems to be paradoxical situation because award cannot be enforced either domestically or locally.

It will also have some implication for enforcement of foreign arbitral awards on intellectual property rights since majority of arbitral awards may not be enforced in foreign country since its enforcement should be accomplished in Jordan because of object of dispute. In such case, it is difficult to predict how arbitration courts and moreover state courts would deal with it.

Enforcement Of Foreign Arbitration Awards In Jordan

One of the problems that foreign company may encounter in Jordan is the problem of enforcement of award related to IP cases in Jordan. It is clear that certain IP cases may intervene with public policy and in this regard it is nearly impossible to assert such possibility may not arise.

IP legislation in Jordan being in immature position sometimes may not offer effective solutions for parties which are from different countries. In this regard, one should closely take a look at public policy issues in Jordan.

According to IP legislation, certain names cannot be registered as trademarks in Jordan. However: what if the name of foreign company or brand coincides with the name trademark registration of which is illegal in Jordan? The company in this case would face difficulties in carrying out business and moreover it would face difficulties in enforcing award that has been rendered in foreign or international arbitration court.

The case of Mitsubishi in U.S. showed how difficult it is to determine whether one case is subject to public policy or not. It has changed the contours of arbitrability in U.S. but the question arises: can such case have implication for Jordanian arbitration system? One can answer positively, but one would be confused when it comes to IP arbitration.

IP arbitration, as it has been seen, is a difficult and complex matter. It cannot be simply adjusted as in the case of ordinary commercial arbitration. The IP legislation is diverse and this diversity may imply negative consequences for arbitration, since arbitrators should be expertise in all areas


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