This paper critically assesses and analyze the Islamic certificate of investments (Sukuk) and its two different structures; asset-backed and asset-based. The co-ownership of the recourse of the Sukuk is additionally known as an Underlying asset. The paper will discuss the legal alternatives of the stakeholders in the case of default of Sukuk. It is believed that Sukuk default by the institution cannot occur in its true sense, as they're not debt instruments issued by the issuer. Rather, they represent the possession of the Sukuk holders on the underlying assets; thus, the Sukuk are primarily based on assets. The recourse mechanism of Sukuk default ought to take into consideration to safeguard the interest of the investors
