Date of Award
Doctor of Juridical Science (SJD)
The Sukuk markets, including the Saudi Arabian market, involve a variety of risks, the most important of which are credit and bankruptcy risks. This relatively new industry should be responsible for protecting the interests of potential Sukuk holders, whether individuals, financial institutions or banks, from credit and bankruptcy risks in order to maintain the reputation of these Islamic investment financial instruments and to increase their pace of growth. This dissertation highlights the negative effects of default on investors in Sukuk and highlights Shari’ah restrictions on various treatment options. We aim to examine the current efforts, with special attention to the Saudi Arabian reality, in dealing with the risks of default and bankruptcy, and to discuss how best to protect potential Sukuk holders from these risks in jurisdictions governed by Islamic law or Islamic arbitration, such as Saudi Arabia. The present research includes some aspects of comparison between traditional debt instruments and Sukuk. In the present research, we develop upon the current financial guarantees and preventive measures provided to combat these risks and provide reinforcing standards and solutions in a way that does not contradict the provisions of Islamic law and finance. Also, we discuss the challenges these proposed solutions may face and offer solutions to addressing some those challenges. The challenges are related to Shari’ah, cultural, and legislative aspects. This dissertation depends on and uses methods of qualitative research concerning Sukuk defaults by focusing on the development of theory, using case studies that are either based on Ijarah (leasing), Musharakah (joint venture) or Murabahah (sale on profit).
AlOudah, Omar, "Protecting the Rights and Interests of Sukuk Holders from the Risks of Default/Counterparty, Bankruptcy and Shari'ah Reality, Development and Challenges (Special Attention to Saudi Arabia)" (2019). Theses and Dissertations. 67.