What is the ruling of Islamic law concerning a man who sold a defective car while knowing of the defect, and refused arbitration to restore the buyer's right?

The seller must disclose any defects they know of in the goods, because concealing them constitutes deception and fraud. This is also because the Prophet, peace and blessings be upon him, said: "The two parties to a transaction have the option (to annul it) as long as they have not parted. If they are truthful and clarify, blessing will be bestowed upon their transaction. But if they lie and conceal, the blessing of their transaction will be wiped out."

If the seller deceives and conceals a defect, the buyer has the option to either annul the sale, or uphold it while demanding compensation for the defect, or uphold it without demanding anything. The jurists have agreed that the sale remains valid, though sin is incurred by concealing the defect.

If the buyer discovers a defect they were not aware of, they have the option to either keep the item or annul the sale, regardless of whether the seller knew of the defect and concealed it or was unaware of it.

In case of a dispute between the two parties, the matter must be referred to the judiciary for a ruling.