The Am Law Daily wrote on Tuesday about the mass of law firms that rushed into Dubai over the past two years to get in on the real estate and financing boom sweeping the Gulf region, but we wanted to know a bit more about the climate there this week, now that Dubai World, the massive sovereign wealth conglomerate, has announced plans to restructure about half its $60 billion in outstanding debt. So we called Jawad Ali, a King & Spalding partner based in Dubai and the deputy head of the firm’s Middle East & Islamic Finance practice group.
Ali, who has worked mostly in the Middle East since 1994, specializes in Islamic financial products, such as sukuk, products that act much like traditional bonds but remain in compliance with Islamic law, or Shariah. The law forbids interest as well as financial products that generally allow investors to, in Ali’s words, “make money off of money.” Investors must share profits with lenders, and there must be a real asset tied to the investment — in the case of the Dubai World subsidiary in the most trouble (a unit called Nakheel), that asset is real estate.
