Canada's Islamic Institute of Civil Justice plans to begin arbitrating family and business disputes early next year using Muslim personal law in Ontario.
Eventually, operations will be expanded across Canada.
Since arbitrators' rulings can be enforced by the courts, the development has raised eyebrows that Sharia will in effect be endorsed by Canada's secular courts.
While Muslim leaders insist decisions are binding only if all parties agreed to the arbitration, critics say people may be pressured to take part in the process.
"It involves inheritance, divorces and family matters and the Sharia law is a distinct disadvantage to Muslim women and they will be pressured. There's no doubt about this," said Sheila Ayala of the Humanist Association of Canada which advocates separating church and state.
The new plan, however, would not cover criminal offences.
Critics say the tribunal could decree unequal inheritance settlements for women because Shariah states that a son inherits twice as much as a daughter.
Muslim and non-Muslim experts say concerns are overblown. To complain about Sharia hints at racism against a community that feels under siege after the September 11, 2001 attacks on the United States, lawyers said.
"It is being sensationalised. It is part of the general hysteria that's out there since 9/11, the Talibanization of (North) America," said Irfan Syed, chair of the Toronto-based Muslim Lawyers Association.
"The mechanisms are all there for oversight and it is unfortunate that people are...leaping to conclusions."
"In truly multicultural countries, this is quite common. It's a legitimate way to give religious communities some autonomy within the scope of our law. The two can exist because the Canadian courts have an ultimate supervisory capacity"
Rahim Khan, co-founder of the institute, also dismisses concerns but insisted that the word "civil" be inserted into the original name, Institute of Islamic Justice.
"There should be no concern. We're dealing with Canadian civil law with minor exceptions here and there," Khan said.
"Muslim personal law is accepted all over the world. Canada is a bit peculiar; we don't seem to understand it."
Khan said the organisation will help ease the backlog in the civil courts and would not deal with criminal matters.
The sudden public interest - news of the group's plans has made headlines in Canada - has surprised some Muslims who say they already used Sharia in divorce arbitration and other disputes. The institute, which has about 50 members, said it wants to formalise that process.
Ontario and other Canadian provinces have long allowed the use of arbitrators in civil disputes, whether religious or not.
A similar system of dispute resolution already exists in the
Jewish community where a couple who obtain a divorce from a
rabbi can have it recognised by the courts. Other religious
matters can be taken before rabbinical courts.
"In truly multicultural countries, this is quite common," said Ed Morgan, a law professor at the University of Toronto. "It's a legitimate way to give religious communities some autonomy within the scope of our law. The two can exist because the Canadian courts have an ultimate supervisory capacity."
The Sharia law is a distinct disadvantage to Muslim women and they will be pressured. There's no doubt about this"
Humanist Association of Canada
The federal government has said it "had no position" on the issue as provinces set laws on property and civil rights in their own jurisdictions as long as they do not breach the Charter of Rights and Freedoms, the country's supreme law.
But that is not enough for critics, who oppose having Canadian courts and police, effectively, enforcing Sharia.
"Nobody thinks the extreme sections of the Sharia law will be carried out, like stoning people and cutting off hands," said
the Humanist Association's Ayala. "But still, if Canada accepts
this, it means it will give credibility to the sharia law around the world."