VII

A.2.3 Diversity among Sukuks....................................................................................................................................................................165 A.2.4 Case on Kuala Lumpur Sentral Pvt. Ltd. (KLSSB): A Success Story ..............................................................................165 A.2.4.1 The Issuer and the Agent ..............................................................................................................................................................165 A.2.4.2 The Musharakah agreement and profit sharing ratio.....................................................................................................166 A.2.4.3 Capital Contribution ........................................................................................................................................................................167 A.2.4.4 Purchase Undertaking (PU) .........................................................................................................................................................167 A.2.5 Cases on Sukuk Defaults....................................................................................................................................................................167 A.2.5.1 East Cameron Partners’ Sukuk Al-Musharakah .................................................................................................................167 A.2.5.1.1 Purpose of Sukuk Issuance.......................................................................................................................................................167 A.2.5.1.2 The SPV ..............................................................................................................................................................................................168 A.2.5.1.3 Type of contract.............................................................................................................................................................................168 A.2.5.1.4 ECP’s Sukuk Structure ................................................................................................................................................................168 A.2.5.1.5 Restructuring the ECP Sukuk ..................................................................................................................................................169 A.2.5.2 The Nahkeel Sukuk ..........................................................................................................................................................................169 A.2.5.2.1 Reasons for Insolvency/Default.............................................................................................................................................170 A.2.5.2.2 Bailout ................................................................................................................................................................................................171 A.3. ISLAMIC BANKING FAILURE AND LESSONS LEARNED ......................................................................................171 A.3.1 Status of Islamic Banking..................................................................................................................................................................171 A.3.2 Recent financial crisis: How the Islamic banks have performed?.................................................................................171 A.3.3 Lessons learned.....................................................................................................................................................................................172 A.4 OVERNING LAW CLAUSES OF SELECTED SUKUK TRANSACTIONS.................................................................173 A.4.1 English Law and Exclusive Jurisdiction of the English Courts........................................................................................173 A.4.2 English Law and Non-Exclusive Jurisdiction of the English Courts .............................................................................174 A.4.3 Sharī'ah as the Exclusive Governing Law..................................................................................................................................175 A.4.4 Provisions for Arbitration in Sukuk Transactions................................................................................................................177 A.5 INSOLVENCY AND DEBT RESTRUCTURING IN ISLAMIC LAW ..........................................................................178 A.6 DEBT RESTRUCTURING, DISPUTE MANAGEMENT AND DEFAULTS IN ISLAMIC FINANCIAL TRANSACTIONS........................................................................................................................................................................180 APPENDIX B: CREDIT RISK MEASUREMENT .................................................................................................................182 APPENDIX C: LIST OF BANKS, COUNTRIES AND REGIONS........................................................................................183 APPENDIX D: SURVEY QUESTIONNAIRE OF RISK MANAGEMENT ........................................................................184