Sukuk Default: A Bankruptcy Law Analysis for The Treatment for Investors, A comparison study between Indonesian Law, Malaysian Law and UAE Law
Dinda Khamasasyiah

HHP Law Firm, 35th Level, Pacific Century Place, Sudirman Central Business District, South Jakarta, Indonesia
dinda.khamasasyiah[at]bakermckenzie.com/dinda.khamasasyiah[at]gmail.com

Abstract

This paper discusses the legal consequences for investors on the bankruptcy of corporate sukuk originators under Indonesian Law, Malaysian Law and UAE Law. This paper focuses to analyse the sukuk asset-based products with Ijarah Lease and Sub Lease akad and Mudharabah akad under those three laws. Besides the function to diversify the investment profile of investors, sukuk, from the very beginning of its creation, aims to promote responsible and real economic based fund raising by keeping financing facilities on proper level of worth relatively with the underlying assets. This virtue is still often sustained as the differentiation value from conventional bond. But does it really achieve the aim? This paper shows how those three current laws respond the bankruptcy of Ijarah Lease and Sub-Lease and Mudharabah sukuk originators for investors and the underlying asset. It seems the investors will be treated the same as conventional bond holders. Investors will be treated as concurrent investors where a pari passu concept applies to them. Under this circumstance, the function of underlying assets will not matter anymore.

Keywords: Sukuk, Default, Bankruptcy, Legal Treatment, Indonesian Law, Malaysian Law, UAE Law

Topic: Sukuk

Link: https://ifory.id/abstract-plain/nuzFK8g94hRH

Web Format | Corresponding Author (Dinda Imani Khamasasyiah)