Arbitration and amicable settlement (sulh) have a long history within Islamic societies and have their roots in pre-Islamic Arabia. Sulh is the preferred result and process in any form of dispute resolution. Further, arbitration is favoured to adjudication in Islamic jurisprudence. In Islamic culture, the overarching objective in conflict settlement is collectivity.
The Prophet Mohammad (PBUH) was chosen as an arbitrator before he became a prophet due to his honesty and trustworthiness and sometimes he was referred to as a kahin. One of the most famous disputes during that time was in relation to the black stone. When Mohammad (PBUH) acted as a judge in his community, he acted in the function of hakam. Mohammad (PBUH) attached great importance to being appointed by the believers as a hakam in their disputes as it renewed their belief in him as a prophet and as a person. Therefore, as long as Mohammad (PBUH) was alive he was regarded as the ideal person to settle disputes between believers through conciliation.
يَا أَيُّهَا الَّذِينَ آمَنُواْ أَطِيعُواْ اللّهَ وَأَطِيعُواْ الرَّسُولَ وَأُوْلِي الأَمْرِ مِنكُمْ فَإِن تَنَازَعْتُمْ فِي شَيْءٍ فَرُدُّوهُ إِلَى اللّهِ وَالرَّسُولِ إِن كُنتُمْ تُؤْمِنُونَ بِاللّهِ وَالْيَوْمِ الآخِرِ ذَلِكَ خَيْرٌ وَأَحْسَنُ تَأْوِيلاً
"O you who believe! obey Allah and obey the Apostle and those in authority from among you; then if you quarrel about anything, refer it to Allah and the Apostle, if you believe in Allah and the last day; this is better and very good in the end." (Quran 4:59)
Whenever disagreements arise (whether they involve business matters or other aspects of life), it is useful to seek an impartial arbiter to help solve the problem. The Mosque offers objective arbitration to solve disputes and preserve relations between the disputants.