Nowadays, international trade with Islamic countries, specifically the Gulf States (GCC), is increasing and the Western World is beginning to show an interest in Islamic jurisprudence regarding commercial transactions, from which most rules on commercial laws in Islamic countries are derived. Such outside interest is associated with increasing calls from within Islamic countries in the Middle East for a return to Sharīʿah law as source of jurisdiction in all aspects of life. The most significant of such calls concerns individuals, proprieties and trade. Arbitration is an alternative method of resolving commercial conflicts that is rapid and peaceful. Arbitration is one of the concepts in Islamic law which Western jurisprudence has tried to understand in the context of Islamic jurisdiction philosophy: e.g., how it was referenced in past books on jurisprudence and how it has developed in recent times as shown in modern writing. Arbitration can be intermixed with other contracts; for example, arbitration and the reconciliatory ṣulḥ contract are major concepts in Sharīʿah law that require study and profound analysis to distinguish clearly how Islamic scholars understand them and to eliminate what could cause confusion for non-Sharīʿah experts. This article explores the Sharīʿah notion of ṣulḥ and arbitration in theory and practice by demonstrating how these two contracts are applied in the Kingdom of Saudi Arabia, the country most likely to derive laws from the Sharīʿah at the present time.