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It doesn't say, but I'm assuming based on the judgment that this decision was in a religious court. These are not too different than the Medieval trials which were based primarily on religious texts and tradition.
In many Muslim Countries there are both Secular and Religious Courts, sitting side by side. Often the people on trial decide which to go on, generally when it's an obscure ruling it tends to be on the Religious Courts. These are based in large part to the Qur'an and Hadith, very often on very obscure texts.
As far as what is morally right, I'm not morally opposed to it in perticular. The truth of history is the Law of Eye for an Eye was actually a system of restraint. By stipulating what a person may get or take in return, it prevents massive blood-feuds which would otherwise grow quickly out of control. Obviously we have progressed beyond these rules, however it has simply turned to the criminal paying in either money or time to the government as opposed to paying the person he/she committed the crime against.
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"Smite the rocks with the rod of knowledge, and fountains of unstinted wealth will gush forth." - Ashbel Smith as he laid the first cornerstone of the University of Texas
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