Contractual Enforceability Issues: Sukuk and Capital Markets Development

This Article seeks to demystify sukuk by providing an analysis of the nature and application of sukuk structuring techniques, with an emphasis on legal considerations, in the rapidly changing world of Islamic finance. It also attempts to explore emerging trends in the rapidly evolving marketplace for sukuk investments. In particular, this Article will evaluate both the underlying legal principles involved in innovative sukuk structures and the use of assets in non- Islamic jurisdictions to back securitizations represented by sukuk certificates. After providing a general explanation of the fundamentals of sukuk as an Islamic investment vehicle and an overview of the growing importance of sukuk in the marketplace, this Article will turn to a discussion of the primary legal challenges of utilizing assets to back sukuk offerings in non-Islamic jurisdictions. In addition, this Article will provide an analysis of key conflicts of law considerations posed by the exportation of sukuk products outside their traditional markets. The first ever sukuk offering involving US assets will be examined as a case study to provide additional insight into how asset-backed sukuk deals in non-Islamic jurisdictions must be carefully structured

Contractual Enforceability Issues: Sukuk and Capital Markets Development

This Article seeks to demystify sukuk by providing an analysis of the nature and application of sukuk structuring techniques, with an emphasis on legal considerations, in the rapidly changing world of Islamic finance. It also attempts to explore emerging trends in the rapidly evolving marketplace for sukuk investments. In particular, this Article will evaluate both the underlying legal principles involved in innovative sukuk structures and the use of assets in non- Islamic jurisdictions to back securitizations represented by sukuk certificates. After providing a general explanation of the fundamentals of sukuk as an Islamic investment vehicle and an overview of the growing importance of sukuk in the marketplace, this Article will turn to a discussion of the primary legal challenges of utilizing assets to back sukuk offerings in non-Islamic jurisdictions. In addition, this Article will provide an analysis of key conflicts of law considerations posed by the exportation of sukuk products outside their traditional markets. The first ever sukuk offering involving US assets will be examined as a case study to provide additional insight into how asset-backed sukuk deals in non-Islamic jurisdictions must be carefully structured

Islamic Shari\u27ah- Compliant Project Finance: Collateral Security and Financing Structure Case Studies

This Essay addresses collateral security structures and project financing structures used in project financings where the structure of, and documentation for, the financing is compliant with the precepts of Islamic Shari\u27ah. The Essay first provides a brief summary of the sources and exposition of Shari\u27ah principles in financing transactions. It then surveys economic and financial trends in Saudi Arabia promoting and supporting the project financings discussed in the Essay. General legal considerations influencing development of the structure are then identified, including the absence of a statutory structure, the inapplicability of stare decisis, and the fact that many laws are not published. A critical factor in any project financing, particularly in a jurisdiction in which Islamic law is predominant, relates to the available enforcement entities and paradigms and the degree to which Islamic Shari\u27ah is the basis for interpretation and enforcement of agreements. This Essay examines the enforcement regimen of Saudi Arabia and then examines three project financing case studies