Recovery & Dispute Resolution for Islamic Finance Facilities

Date: 6 - 7 Dec 2017
Location: InterContinental, KUALA LUMPUR

The Islamic finance industry faces the same fundamental challenges and risks as that of conventional finance, including whether or not clients can fulfill their repayment obligations and when. However, recovery under Islamic finance principles is a significantly more sensitive undertaking and Islamic banks have to be very careful about how they approach the recovery process. Given the lack of precedent in such cases, effective documentation and a clear understanding of Shariah principles and other regulations is essential.

This intensive two-day program will provide delegates with a clear understanding of the key regulatory and Shariah issues surrounding the recovery of Islamic facilities as well as crucial legal, procedural and documentation issues to consider when defaults or problems occur. Real-life case studies will be used to examine important precedents and to develop delegates’ understandings of the application of these principles.

KEY LEARNING OUTCOMES

  • Understand Key Guidelines and Regulations Governing Recovery for Islamic Financing
  • Gain Insight on Shariah perspectives and Issues Affecting the Recovery and Resolution Process
  • Examine Legal Procedures and Issues in Default and Recovery – Where do Problems Happen? 
  • Understand Legal Considerations in Drafting Effective Documentation
  • Assessing options for Dispute Resolution in the case of Islamic Financial Products

Agenda

Day One: 9:00 am – 5:00 pm

Objectives of Shariah - a Concise Review 

This essential session provides a refresher of key Islamic finance and Shariah principles and how they dovetail with commerce, banking and finance.

  • Classification of Shariah and its key and vital components
  • Objectives of Shariah with regard to transactions and commerce
  • Shariah from the commercial & banking perspectives – what you need to know

Application & Product Features of Shariah Contracts  

In this session we shall examine key product structures and how they fit into the Islamic finance system. At the same time we shall be considering where crucial risks and potential problem areas may lie.

  • Bai’ Bithaman Ajil and Bai’ Inah
  • Murabahah
  • Wakalah
  • Bai’Al-Dayn
  • Kafalah
  • Murabahah Tawarruq
  • Al Ijarah Thumma Al Bai (AITAB)

Modus Operandi via Case Study Analysis

Documentation for Business Financing Products   

This session will analyze documentation issues with regard to specific business financing structures. Again, we shall be looking for potential flashpoints and where problems may occur in the case of default.

  • Bai’ Bithaman Ajil and Bai’ Inah
  • Murabahah
  • Murabahah Tawarruq
  • Al Ijarah Thumma Al Bai (AITAB)

Legal Documentation for Islamic Financing Facilities    

This session will help delegates understand the legal framework governing Islamic banking, as well as the key differences between how an Islamic bank may act as compared to an Islamic bank.

  • Differences between Islamic & conventional banking
  • Issues & challenges faced by Islamic financial institutions
  • Legal framework governing Islamic banks – what Islamic finance institutions can and cannot do
  • How significant is this?

Day Two: 9:00 am – 5:00 pm

Types of Legal Documentation  

What are the key documents that bankers need to be familiar with? Effective structuring and legal drafting early on can avoid significant problems in the case of default.

  • Letter of offer/supplementary LO
  • Primary & secondary documents
  • Uses and structure of guarantees
  • Charge documents
  • Others (RD, option to purchase, undertaking and others)
  • Sharing of security with conventional loans – how can this be done?
  • Early settlement/Ibra’ issues

Common Mistakes & Issues in Legal Documentation

Rescheduling & Restructuring of Islamic Financing

Debt Recovery Procedures

Understand the tools and courses of action available to an Islamic bank and how the case of default under Islamic finance differs significantly to conventional finance. What can an Islamic bank do and what steps can practically be taken from a legal perspective

  • Objectives of recovery
  • Recovery techniques & strategies – what courses of action are realistically available to an Islamic bank
  • Foreclosure proceedings – know the process and avoid the pitfalls
  • The situation with civil proceedings
  • Statement of claim

Mediation, Arbitration and Dispute Resolution Options for Islamic Financial Products

(4.00pm-5.00pm, Guest Presentation – 60 minutes)

Course Conclusion

For more information and register, please click Here.

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