Could you provide a brief journey of how you arrived where you are today?
My first exposure to structuring and documenting Islamic products started back in 1998 on my first day on the job as a mid-level associate at the Jeddah office of a US law firm. Coming from Jordan, where Islamic banking was, and still is, in its infancy, it was all news to me. The client was a leading bank in Saudi Arabia and the counterparty, a leading European bank. To add to the complexity, the product under development was deemed at the time to be an innovative Islamic product.
Work on documenting the transactions involved multiple sessions with Shariah scholars but it eventually proved to be a big success. It was one of the first Islamic capital protective funds and raised over US$250 million. Since that experience, I have continued to focus on Islamic finance and investment transactions.
What does your role involve?
It involves advising sponsors and financial institutions on the structuring and documentation of Sukuk, investment funds and other types of instruments. Vinson & Elkins is supportive of such efforts and we now have partners and associates in eight offices globally, who have worked and are working on Islamic finance transactions.
What is your greatest achievement to date?
I am hopeful that my greatest achievement is yet to come and that it will involve some scholarship on issues pertaining to Islamic transactional law. Having said so, I am proud of my involvement in advising the arrangers on the East Cameron Gas Sukuk, the first Sukuk to be backed by gas and oil reserves, and the first such Sukuk to involve assets in the US.
Which of your products/services deliver the best results?
Generally speaking, clients judge us on the basis of the quality of service, level of understanding of the issues and levels of responsiveness. Due to the fact that the Islamic banking industry is far from standardized, lawyers who are active in this practice area are expected to take part in pre-structural meetings with their clients, at a very early stage in the process. Additionally, the ability to advise clients on user-friendly means (including documentation) to address the interplay between local laws and Shariah precepts, as interpreted by Shariah scholars, is key to delivering the best results to clients.
What are the strengths of your business?
Global reach and the ability to get help from experts in a specialized legal area when you need it. It also helps that we have a team of bilingual and trilingual lawyers in Dubai as this helps in communicating with clients and in understanding Islamic banking scholarly work, which is mostly in Arabic.
What are the factors contributing to the success of your company?
Collegiality, creativity, professional relationship with clients, counterparties, lawyers from other firms and support through an international network of truly exceptional lawyers.
What are the obstacles faced in running your business today?
Key challenges include the identification of the right talent base. While it is commonly accepted that the number of lawyers who specialize in advising on Islamic banking transactions is rather limited at the moment, it is important to identify a good talent base that can be trained to advise on and run complex Shariah transactions.
Another challenge is the fact that the number of experienced Shariah scholars is not commensurate with the growth levels witnessed by the industry. It is important for educational institutions in the Islamic world to step up tasks of introducing qualified Shariah scholars, and for Islamic banks to provide internships to such young scholars. This is a challenge that the industry, broadly defined, should tackle.
Where do you see the Islamic finance industry, maybe in the next five years?
First of all, I see Islamic banking as having cemented its position as the vehicle of choice through which western investors gain exposure to assets in the broader Middle East region. Second, I see more Sukuk arrangers and private equity funds competing with well-established conventional financial arrangers and private equity houses for opportunities in non-Islamic jurisdictions. Third, I am hopeful that Islamic banks will spearhead investments in emerging markets such as BRIC (Brazil, India, China and Russia). Finally, we should see a higher number of practitioners. I remain optimistic that all these are achievable. After all, where was the Sukuk industry five years ago?
Name one thing you would like to see change in the world of Islamic finance?
I would like to see the industry focus less on pure real estate projects, and commit resources to investing in such areas as renewable energy, infrastructure development and public private partnerships. This would enhance the ethical/green component of the Islamic banking industry and contribute to the economical growth that our region and the developing world are witnessing.
Vinson & Elkins LLP began in Houston, Texas, as a two-man partnership in 1917. V&E is one of the world’s leading energy law firms, with offices in New York, Beijing, Dubai and London, among others.