Critical assessment of the Legal Recourse for the Case of Sukuk default for the Asset-Backed Sukuk and Asset-Based Sukuk structures
DOI:
https://doi.org/10.13135/2421-2172/2066Keywords:
Asset-Backed Sukuk, Asset-Based Sukuk, Legal Recourse, Sukuk default.Abstract
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.
References
Fawaz Elmalki, D. R., 2010. Conyers Dill & Pearman.
Hidayat, S. E., 2013. A Comparative Analysis between Asset Based and Asset Backed Sukuk: Which One is More Shariah Compliant. International SAMANM Journal of Finance and Accounting, 1(2).
ISRA, 2011. Sukuk Market. In: D. M. A. Laldin, ed. Islamic Financial System - Principles and Operations. Kuala Lumpur: International Shariah Research Academy (ISRA), pp. 390-392, 395-400.
Johnson, H. & 2013. Cayman Islands: Guide To The Cayman Islands Exempted Companies.
Law, F. O. F. (2010). TISCO Working Paper Series on Banking, Finance and Services No. 07/2010, (07), 1–28.
Majid, H. A., Shahimi, S., & Abdullah, M. (2011). Sukuk Defaults and Its Implication : A Case Study of Malaysian Capital Market. 8th International Conference on Islamic Economics and Finance, Qatar, 1–37.
Nazar, J. K. (2011). Regulatory and Financial Implications of Sukuk ’ s Legal Challenges for Sustainable Sukuk Development in Islamic Capital Market 1. 8th International Conference on Islamic Economics and Finance, 1–16.
Oseni, U. a, & Hassan, M. K. (2015). Regulating the governing law clauses in Sukuk transactions. Journal of Banking Regulation, 16(3), 220–249. http://doi.org/10.1057/jbr.2014.3
Tahmoures, A. A. (2013). Compare and Contrast Sukuk ( Islamic Bonds ) with Conventional Bonds , Are they Compatible ? Journal of Global Business Management, 9(1), 44–52.
Wijnberge, S. van, & Zaheer, S. (2013). Sukuk Defaults: On Distress Resolution in Islamic Finance. Tinbergen Institute Discussion Paper, No. 13-087/VI/ DSF57, 1–54.
Downloads
Published
How to Cite
Issue
Section
License
EJIF content is licensed under a Creative Commons Attribution 4.0 International License.
Authors keep the copyrights for their work and give the journal the work's first publication copyright, which is at the same time licensed under a Creative Commons License – Attribution, which in turn allows other parties to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
EJIF has been approved for inclusion in 
EJIF has been approved for inclusion in 
EJIF is member of 
EJIF is indexed by 
EJIF is listed in the ANVUR (Italian National Agency for the Evaluation of Universities and Research Institutes) as a scientific journal in both 
