Law firms navigate foggy Dubai regulation as UK awaits asset sale

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  • Emirates airline is not held within the Dubai World group. There are plenty of "crown jewel" assets within the Dubai World group though. The real question, however, is whether any creditors have the right or the ability to get their hands on them.

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  • The sukuk are not subject to local laws, they are governed by English law. However, it is the enforcement of any English law judgment in jurisdictions where Dubai World assets are likely to be (e.g. UAE) which will prove difficult. Similarly, because of the nature of the ownership structure of Dubai World, and UAE court will not be able to sell or auction any ot these assets.
    On another note, regarding 'each jurisdiction interprets sharia principles differently, this scenario is unlikely to arise since any even slightly well drafted Islamic finance document will contain reps and warranties that the parties agree that the documents are in compliance with sharia and reps and warranties that they will not objectto the sharia compliance nature of the documents. What will be interesting is if any of the notes which were traded in the secondary market (if any) and currently held by other institutions whether those institutions (not party to the original structure) will challenge the sharia compliance nature of the structure should they wish to exercise their rights upon the expiry of the 14 day cure period following the mid December redemption date......exciting stuff!

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