A Recent Ruling that Shari’a Compliant Investment Agreements Do Not Qualify for Safe Harbor Treatment May Have Broader Implications
By EsqSocial Corporation 04/05/21
In a first, the Bankruptcy Court for the Southern District of New York in the Arcapita Bank case had to decide whether Shari’a compliant investment agreements, providing for Murabaha and Wakala transactions, qualify for the safe harbor protections provided in the bankruptcy code for securities contracts, forwards and swaps. The court held that they do not. Since the opinion runs about 100 pages long, we attempt to distill some very basic facts concerning Shari’a compliant transactions and point...
By: Dechert LLP