If ye fear a breach between them twain, appoint (two) arbiters, one from his family, and the other from hers; if they wish for peace, Allah will cause their reconciliation: For Allah hath full knowledge, and is acquainted with all things.
Whenever the relationship between a husband and a wife starts to break down, an attempt should first be made to resolve the dispute at the family level, before it is aggravated and leads to the disruption of the matrimonial tie. The procedure to be followed is that two persons, one on behalf of each family, should be nominated to look into the matter together and devise means whereby the misunderstanding between the spouses may be brought to an end. Who should nominate these mediators? God has not specified this so as to allow people full freedom to choose the most convenient arrangement. The parties would be free, for instance, to decide that the mediators be nominated either by the spouses themselves or by the elders of their respective families. If the dispute is brought before the court, the latter also has the right to nominate mediators, representing the families of both parties, before referring the matter for judicial verdict. @ @ There is disagreement among Muslim jurists about the extent of the mediators’ authority. The Hanafi and Shafi’i schools are of the opinion that they normally have no authority to issue a binding verdict. All they may do is to recommend the solution they advocate, whereafter the spouses have the right either to accept or to reject it. The exception is if the spouses have nominated the mediators to act on their behalf in regard to either talaq or khul’:they will then be bound by their verdict. This is the opinion of the Hanafi and Shafi’i schools. Another group of jurists argues that the authority of the mediators is confined to deciding how the spouses should reconcile their differences, and does not extend to the annulment of marriage. This is the opinion of Hasan al-Basri and Qatadah, among others. Yet another group holds the opinion that the mediators have full authority both in respect of reconciliation and annulment of marriage. This is the opinion of Ibn ‘Abbas, Sa’id b. Jubayr, Ibrahim al-Nakha’i, al-Sha’bi, Muhammad b. Sinn and several other authorities. The precedents which have come down from early Islam, however, are the judgements of ‘Uthman and ‘Ali. These indicate that they conferred upon the mediators the authority to issue judgements binding on both parties. When the dispute between ‘Aqil b. Abi Talib and his wife Fatimah b. ‘Utbah b. Rabi’ah came up for the judgement of ‘Uthman, he nominated Ibn ‘Abbas and Mu’awiyah b. Abi Sufyan from the families of the husband and the wife respectively. He also told them that if they thought that separation was preferable, they should declare the marriage annulled. In a similar dispute ‘Ali nominated mediators and authorized them either to bring about reconciliation or annul the marriage, whichever they considered appropriate. This shows that the mediators do not have judicial authority as such. (See the commentaries of Ibn Kathir and Jassas on this verse -Ed.) Such authority, however, may be conferred upon them by the courts, in which case their decision will have the force of a judicial verdict.
Maududi, Abul Ala (2010). Tafhim ul Quran. https://www.englishtafsir.com/Quran/27/index.html