Having done research on the structuring of Sukuk, I’ve been thinking lately on the ability of a Sukuk market to actually flourish. What incentives does any Sukuk issuer have to assure the success of their Sukuk?
Many hurdles are faced if Shariah compliant documentation is to be standardized. Of these are the jurisdictional challenges of drafting legal documentation to comply to basic shariah principles, comply to local and national laws, and still remain commercially viable.
While reviewing several cases of defaults, disputes, and disruptions in Islamic Finance deals that have made the press, I noticed that almost every case that has been litigated on has been in a western common law court (UK-USA).
I’m interested in the guarantee mentioned below. Does Islamic Finance allow for a guaranteed return, even if done through Lease (Ijara)? Because Islamic Finance is not contained by one single regulatory system, some of the arguments made will be difficult to apply.
While preparing my Masters thesis, I came a across an interesting quote from Muhammad b. Idris al-Shafi’i, the famous jurist and author of the first work of Islamic legal theory, al-Risalah. After explaining the need to consult others before issuing juristic opinion:
Muhammad Yunus having won the Nobel prize for economics, Microfinance has become a hot item for many seeking to make money and “lend” a helping hand. Much criticism has surrounded Microfinance, from Muslims and Non-Muslims alike, questioning the ethics and viability of the practice.
On issues of Islamic legal development theory, one point popped in my mind today when thinking about Ahkam al-Sharikat that is the Law of business partnerships. This point is, and hence the title, is “In spite of vs. in light of”.