Sukuk structures: Legal engineering under Dutch Law is about Sukuk, one of the most well-known Islamic finance products. Sukuk are Islamic securities. Sukuk securities are structured to comply with Islamic law and its investment principles, which prohibit the charging or paying of interest. As an answer to the need for a Shariah compliant alternative to conventional bonds, Sukuk entered the capital markets.
The Sukuk market is expanding at an incredible rate, yet the Netherlands has not entered this market yet. A Sukuk issuance under Dutch law might offer participants in the Dutch banking and finance practice opportunities to attract funding from a rather new pool of investors. From an academic perspective, this study provides an in-depth analysis of the legal structure of Sukuk and its interaction with Dutch private law. Not only does such research illustrate how these two can interact, but it might also lead to a better understanding of the Islamic and the Dutch legal systems.
The author explains the fundamentals of Islamic finance and analyses Islamic contract, property, corporate and finance law. He describes how Islamic finance principles such as riba (in short: prohibition on interest) and gharar (avoidance of contractual uncertainty) have contributed to the development of Islamic finance contracts.
The author furthermore examines the legal structure of Sukuk transactions and the applicable Islamic finance rules. He then scrutinizes three main sukuk transactions (the Sukuk al-Musharaka, the sukuk al-Murabaha and the Sukuk al-Ijarah) under Dutch private law, mainly focussing on Dutch contract, property, insolvency and corporate law. The author concludes that there are no legal obstacles to introducing Islamic finance in the Netherlands.
This work is of interest to academics and practitioners in the field of banking and finance law.
Review in Ars Aequi, volume 63, November 2014
“Sukuk Structures: Legal Engineering Under Dutch Law provides the reader with many new insights in this relatively unfamiliar structure of finance. We warmly recommend both lawyers and academics in the field of financing to read it. We hope that Salah will continue to publish regularly about this topic.”
About the author
Omar Salah obtained a LLM on Dutch Law (cum laude) at Tilburg Law School, Tilburg University. In 2009, Salah started his PhD research at the Private Law Department of Tilburg University. In 2011, Salah joined De Brauw Blackstone Westbroek as a lawyer (advocaat) where he worked with the Corporate Litigation and Insolvency practice group and with the Finance practice group, while continuing his PhD thesis at Tilburg University.