IslamicFinance.de

Blom Developments Bank SAL (“Blom”) placed US$10 million with The Investment Dar Company KSCC (“TID”)under a wakala agreement (the “Agreement.

The Agreement was governed by English law and provided that TID would invest the Capital Sum (as the agent of Blom) in a shari’ah compliant manner. The Agreement further provided that at the end of the investment period TID had an obligation to pay to Blom the Capital Sum together with the anticipated agreed profit (the “Profit”).

TID failed to fulfill its obligations under the Agreement to pay to Blom the Capital Sum and the Profit at the end of the investment period. As a result Blom brought a summary judgment application in the English High Court. The Court ordered TID to pay to Blom the Capital Sum (but not the Profit).

King & Spalding published a briefing on the recent request by Dubai World that all its creditors agree to a standstill on any amounts payable to them until at least 30 May 2010 and the new law issued by the Ruler of Dubai, HH Sheikh Mohammed Bin Rashid Al Maktoum, setting out what will occur in the event that Dubai World or any of its subsidiaries are in an insolvency situation.

The briefing is authored by Michael Rainey and Sara Carmody of King & Spalding London and Dubai offices.