Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Ten years ago, Islamic finance accounted for a small part of Andrew M. Metcalf’s practice. Today, it is all he does. “There are new products and there are refinements of existing products,” said Metcalf, a partner in the finance practice group in the New York office of Atlanta-based King & Spalding. “There is a huge amount of not only growth, but future opportunities.” Islamic finance is a banking system that follows the principles of Islamic law, or Sharia. Lawyers working in Islamic finance advise clients on a range of matters related to Islamic law, including project finance, structured finance, corporate acquisitions, real estate transactions and investment funds. Clients must follow a number of rules in order to ensure compliance with Sharia. For example, Islamic law prohibits investment in companies that sell pornography or alcohol. It also prohibits collection of interest. Even as parts of the United States and Europe feel the credit-crunch crisis, Islamic finance has continued to prosper. American law firms have responded, with many continuing to open offices in the Middle East and add lawyers with experience in Islamic finance. A hiring spree In March, Fulbright & Jaworski hired a new partner to head the firm’s Islamic finance practice. White & Case recently strengthened its offices in Abu Dhabi, the capital of United Arab Emirates, and Riyadh, the capital of Saudi Arabia. Islamic finance is one of the main focus areas for the two offices. Houston’s Vinson & Elkins opened an office in Abu Dhabi last year, citing demand for Islamic finance among the reasons. King & Spalding opened an office in Dubai, United Arab Emirates, last year and also said Islamic finance is one of the key practice areas. Oliver Agha, a partner in DLA Piper’s Dubai office, who is the firm’s global head of Islamic finance and head of finance in the Middle East, said that during the past five years investment in Islamic law-compliant funds has grown significantly and is now worth billions. DLA Piper has about 50 lawyers who spend a part of their time on Islamic finance, Agha said. The firm has more than 70 lawyers in the Persian Gulf region and the number is expected to grow to as many as 150 by the end of the year, he said. In addition to booming construction in places such as Dubai and Abu Dhabi, entire cities are being built in the Middle East. For example, a new city is being planned near Muscat, Oman, and there are plans to build Energy City � which would provide infrastructure to the oil and gas companies in the region � in Libya. Because of the predominantly Muslim population, there is constant demand for Islamic law-compliant financing, Agha said. Although financial instruments still don’t exist for all of the transactions available through conventional banking, most of them can be done under the terms of Sharia, he said. “It’s a very permissive law, which means you can come up with a structure to achieve the end goal of doing business, as long as you are not lending money with interest,” Agha said. “So we are continuously coming up with new products.” Metcalf said that in 1998, when he handled a lease structure under Sharia terms, he had to develop a set of documents for it because it had not been done before in the United States. Today, standard forms are available for many such transactions and the banking community has become more educated about this area of law, he said. “The idea is that you develop the industry and then you make it increasingly Sharia-compliant,” Metcalf said. “The momentum is building and with that comes increasing familiarity and more willingness to do things Islamic investors want.” Not only in Middle East Increasingly, places outside the Middle East are also seeing growing demand for Islamic law-compliant transactions, said Richard Stewart, a London-based counsel to Bryan Cave whose practice includes Islamic finance. For example, he recently had a client looking to buy a house in London under Sharia terms, he said. While there are different approaches to each transaction, a mortgage under Islamic terms may involve the bank buying the house and then selling it to the owner, instead of lending him money to buy it.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.