The Regulation of Islamic Capital Markets: Revisiting the Governing Law Clause in Sukuk Transactions

The crystallization of the Islamic capital markets in the last decade has led to increased acceptance of Islamic finance products in the global market. However, a fundamental question that lies on the intersection of law and Islamic capital market that has far-reaching impact on market practices is...

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Main Author:	Oseni, Umar Aimhanosi
Format:	Conference or Workshop Item
Language:	English
Published:	2012
Subjects:	K Law (General) KBP469 Influence of other legal systems on Islamic law
Online Access:	http://irep.iium.edu.my/27401/ http://irep.iium.edu.my/27401/1/Governing_Law_Clause_of_ICM.pdf

id	iium-27401
recordtype	eprints
spelling	iium-274012012-12-18T00:15:16Z http://irep.iium.edu.my/27401/ The Regulation of Islamic Capital Markets: Revisiting the Governing Law Clause in Sukuk Transactions Oseni, Umar Aimhanosi K Law (General) KBP469 Influence of other legal systems on Islamic law The crystallization of the Islamic capital markets in the last decade has led to increased acceptance of Islamic finance products in the global market. However, a fundamental question that lies on the intersection of law and Islamic capital market that has far-reaching impact on market practices is the extent to which the governing law clause in a typical Sukuk prospectus protects the interest of the parties and meets the ends of justice. An analogous clause within the governing law provision is the dispute resolution clause, which either makes or mars the whole transaction depending on how it is structured. The paper argues that as part of Islamic finance documentation involved in the process of structuring a Sukuk transaction, one important thing the parties must get right from the beginning is the governing law clause. With the increasing provision of English law as the governing law, a question that readily comes to one’s mind is whether it is possible to have an alternative governing law while retaining the choice of jurisdiction clause. In order to create a regulatory environment that is conducive to the prevailing trends in the modern world, this studycritically ploughs through the governing law clauses of 10 selected Sukuk prospectuses and makes interesting findings regarding the attitude of draftsmen and their clients. A preliminary finding of this study is the paradigm shift to arbitration as an alternative or precondition to litigation in some of the Sukuk prospectuses reviewed. Since there are regional and international arbitral institutions set up exclusively for Islamic finance disputes, it may be more appropriate to resolve any dispute arising from a Sukuk transaction under Sharī'ah-compliant rules and supervised by experts in Islamic law. The interviews conducted for this research with 10 prominent Sharī'ah scholars who have been involved in the certification of Sukuk structures proves this hypothesis and the qualitative data are consistent with it, albeit with some dissenting views. 2012 Conference or Workshop Item PeerReviewed application/pdf en http://irep.iium.edu.my/27401/1/Governing_Law_Clause_of_ICM.pdf Oseni, Umar Aimhanosi (2012) The Regulation of Islamic Capital Markets: Revisiting the Governing Law Clause in Sukuk Transactions. In: International Conference on "Toward Resilient, Robust, and Competitive Islamic Capital Market", 19-20 June 2012, Jakarta, Indonesia. (Unpublished)
repository_type	Digital Repository
institution_category	Local University
institution	International Islamic University Malaysia
building	IIUM Repository
collection	Online Access
language	English
topic	K Law (General) KBP469 Influence of other legal systems on Islamic law
spellingShingle	K Law (General) KBP469 Influence of other legal systems on Islamic law Oseni, Umar Aimhanosi The Regulation of Islamic Capital Markets: Revisiting the Governing Law Clause in Sukuk Transactions
description	The crystallization of the Islamic capital markets in the last decade has led to increased acceptance of Islamic finance products in the global market. However, a fundamental question that lies on the intersection of law and Islamic capital market that has far-reaching impact on market practices is the extent to which the governing law clause in a typical Sukuk prospectus protects the interest of the parties and meets the ends of justice. An analogous clause within the governing law provision is the dispute resolution clause, which either makes or mars the whole transaction depending on how it is structured. The paper argues that as part of Islamic finance documentation involved in the process of structuring a Sukuk transaction, one important thing the parties must get right from the beginning is the governing law clause. With the increasing provision of English law as the governing law, a question that readily comes to one’s mind is whether it is possible to have an alternative governing law while retaining the choice of jurisdiction clause. In order to create a regulatory environment that is conducive to the prevailing trends in the modern world, this studycritically ploughs through the governing law clauses of 10 selected Sukuk prospectuses and makes interesting findings regarding the attitude of draftsmen and their clients. A preliminary finding of this study is the paradigm shift to arbitration as an alternative or precondition to litigation in some of the Sukuk prospectuses reviewed. Since there are regional and international arbitral institutions set up exclusively for Islamic finance disputes, it may be more appropriate to resolve any dispute arising from a Sukuk transaction under Sharī'ah-compliant rules and supervised by experts in Islamic law. The interviews conducted for this research with 10 prominent Sharī'ah scholars who have been involved in the certification of Sukuk structures proves this hypothesis and the qualitative data are consistent with it, albeit with some dissenting views.
format	Conference or Workshop Item
author	Oseni, Umar Aimhanosi
author_facet	Oseni, Umar Aimhanosi
author_sort	Oseni, Umar Aimhanosi
title	The Regulation of Islamic Capital Markets: Revisiting the Governing Law Clause in Sukuk Transactions
title_short	The Regulation of Islamic Capital Markets: Revisiting the Governing Law Clause in Sukuk Transactions
title_full	The Regulation of Islamic Capital Markets: Revisiting the Governing Law Clause in Sukuk Transactions
title_fullStr	The Regulation of Islamic Capital Markets: Revisiting the Governing Law Clause in Sukuk Transactions
title_full_unstemmed	The Regulation of Islamic Capital Markets: Revisiting the Governing Law Clause in Sukuk Transactions
title_sort	regulation of islamic capital markets: revisiting the governing law clause in sukuk transactions
publishDate	2012
url	http://irep.iium.edu.my/27401/ http://irep.iium.edu.my/27401/1/Governing_Law_Clause_of_ICM.pdf
first_indexed	2023-09-18T20:40:43Z
last_indexed	2023-09-18T20:40:43Z
_version_	1777409346300280832

The Regulation of Islamic Capital Markets: Revisiting the Governing Law Clause in Sukuk Transactions

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