legal guide09.indd - Islamic Finance News

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All Nominated Lawyers in the Category of Islamic Securitization & Structured Finance • • • • • • • • • • • • • Abradat Kamalpour Ashurst Also Nominated in Islamic Banking & Finance See Full Profile on Page 66 Andrew Coats Clifford Chance Andrew Taylor Lovells Anzal Mohammed Allen & Overy Ayman Khaleq Vinson & Elkins Christopher Aylward DentonWildeSapte Also Nominated in Islamic Banking & Finance, Real Estate Finance See Full Profile on Page 56 Christopher F Richardson Vinson & Elkins Debashis Dey Clifford Chance Farmida Bi Norton Rose Hooman Sabeti-Rahmati Allen & Overy Imran Mufti Lovells Jeanne Bartlett Appleby John H Vogel Patton Boggs See Full Profile on Page 67 • • • • • • Oliver Agha Agha & Shamsi Also Nominated in Takaful, Islamic Dispute Resolution, Islamic Real Estate Finance, Islamic Transportation Finance, Islamic Project Finance, Islamic Banking & Finance See Full Profile on Page 33 Qudeer Latif Clifford Chance Rahail Ali Lovells Richard Tredgett Allen & Overy Salim Nathoo Allen & Overy Walid Hegazy Freshfields Bruckhaus Deringer • • Kenneth Aboud Allen & Overy Neil D Miller Norton Rose 68
International Islamic Finance Vehicles By Sameer K Tegally With sound legal, fiscal and regulatory environments, international financial centers such as Mauritius, Bermuda, Cayman Islands and BVI beckon as jurisdictions of choice for structuring cross-border Islamic finance transactions. The use of vehicles such as limited life companies, trusts, and special purpose companies is outlined in this article within the global Islamic finance context. Musharakah Cross-border Musharakah — which involves the pooling of financial resources (shirkat-ul-amwaal) by two or more international partners (shariks) to carry out specific Shariah compliant projects or enterprises — may be efficiently engineered through a limited life company incorporated in an international financial center. The limited life company is basically a partnership wrapped up in a corporate cloak; it has two shareholders (partners) who, under a Musharakah, will be the Islamic financial institution and the client. The constitution of the limited life company specifies its lifespan. “Mauritius, Bermuda, Cayman Islands and BVI beckon as jurisdictions of choice for structuring cross-border Islamic fi nance transactions” A share in the limited life company confers distinctive interests/rights in its profits, capital or management. The Islamic financial institution will be issued with a share having only a right to the profits and capital of the limited life company, whereas the share issued to the client carries — in addition to the right to profits and capital — a right to manage the limited life company. This is a common feature of a Musharakah where the Islamic financial institution is the “silent” partner, having little or no say in the day-to-day management of the enterprise. The shareholders of the limited life company may engraft into the constitution a clause to the effect that the board of directors may manage the affairs in the best interests of a shareholder or shareholders even though it may not be in the best interests of the company. Such a clause may prove to be convenient in the event the board finds itself in a delicate position where the best interests of the shareholders conflict with those of the limited life company. Structure 1: Musharakah Islamic financial instuon Parcipang share Profit/loss Limited Life Company Shariah-compliant enterprise Client investor Management share The constitution of the limited life company may provide that the Islamic financial institution shall cease to be a shareholder upon the happening of a specific event, for example, after a set period of time (say after the infancy of the project or enterprise) or in the event that the client dies or becomes insolvent. The Islamic financial institution would then be entitled to receive such value for its shares as may be determined in the limited life company’s constitution. However, if the limited life company is running at a continued.... 69
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EDITOR’S NOTE Spotlight on the Le
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CONTENTS Islamic Energy Finance Dev
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Global Legal Islamic Finance Indust
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The Development of Islamic Banking
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IN THE CATEGORY OF Islamic Banking
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Page 19 and 20: IN THE CATEGORY OF Islamic Banking
Page 21 and 22: IN THE CATEGORY OF Islamic Banking
Page 23 and 24: All Nominated Lawyers in the Catego
Page 25 and 26: Convertible Sukuk in Kuwait: A Lega
Page 27 and 28: IN THE CATEGORY OF Islamic Corporat
Page 29 and 30: IN THE CATEGORY OF Islamic Corporat
Page 31 and 32: Islamic Finance Dispute Resolution
Page 33 and 34: Islamic Finance Dispute Resolution
Page 35 and 36: IN THE CATEGORY OF Takaful, Securit
Page 37 and 38: Structuring Shariah Compliant Funds
Page 39 and 40: Structuring Shariah Compliant Funds
Page 43 and 44: Shariah Litigation & Arbitration in
Page 47 and 48: A New Dawn For Islamic Project Fina
Page 49 and 50: IN THE CATEGORY OF Islamic Project
Page 53 and 54: Developments in Islamic Energy Fina
Page 55 and 56: Opportunities in Islamic Real Estat
Page 57 and 58: Opportunities in Islamic Real Estat
Page 61 and 62: Transportation Finance (continued..
Page 63 and 64: IN THE CATEGORY OF Islamic Transpor
Page 65 and 66: Securitization and Shariah Law By J
Page 67 and 68: Securitization and Shariah Law (con
Page 69: IN THE CATEGORY OF Islamic Securiti
Page 73 and 74: International Islamic Finance Vehic
Page 77 and 78: The Opportunities for Growth in Tak
Page 79 and 80: INDEX BY LAWYERS Page in BOLD refer
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