From Roubini.com: The recent debt restructuring of Dubai World and the last minute rescue of property subsidiary Nakheel, which issued one of the largest Islamic bonds three years ago, has shaken the confidence in Islamic finance owing to growing controversy about the interaction of shari’ah compliance and principles of investor protection in times of distress.
As creditors are about to sign their settlement agreements in late April 2010 there remains general concern about whether shari’ah compliance might hamper an orderly dispute resolution under conventional law and about the legal enforceability of asset claims under the current Accounting and Auditing Organization for Islamic Financial Institutions (AAOIFI) recommendations on sukuk structures…………………………………..Full Article: Source