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6.2 Any operations of the IILM or any of its subsidiaries, special purpose entities or trusts for its or their own account shall only be carried out in currencies deemed suitable by the Governing Board.
6.3 The IILM shall be administered with particular regard to maintaining its liquidity, and for this purpose shall itself or through its subsidiaries, special purpose entities or trusts, retain such Sharī`ah-compliant assets appropriate to the maturity and character of its liabilities as may be determined by the Governing Board.
6.4 The IILM may offer technical assistance or advisory services to its members or prospective members on matters relevant to its objectives or functions as the Governing Board may deem appropriate.
8.1 Each signatory to these Articles of Agreement is hereby admitted as a member of the IILM and shall be bound by these Articles of Agreement without the need to execute the membership agreement referred to in Article 8.4.
8.2 Any institution referred to in Article 7 which has not become a member under Article 8.1 may make an application to be a member of the IILM by submitting an application to the Chief Executive Officer who shall make a recommendation to the Governing Board at its next meeting whether or not to admit the applicant.
8.3 The Governing Board shall, upon the recommendation of the Chief Executive Officer, approve or reject any application made under Article 8.2 and the IILM shall, as soon as practicable thereafter, notify the applicant the result of its application.
9.2 Each member shall have the duty to pay in full to the IILM the value of the shares subscribed by it in accordance with Article 12.
in each case substantially on the terms as provided in Chapter V of these Articles of Agreement; and
17.3 Two thirds of all IILM members shall constitute a quorum for the General Assembly.
17.4 Each member shall, unless its membership is suspended, have one vote at each meeting of the General Assembly and all matters before the General Assembly shall be decided by a simple majority of all members present in the meeting, unless specifically provided otherwise in other Articles.
17.5 The General Assembly shall meet at least once in a year within six months of the end of the financial year of the IILM on such date, time and place as shall be determined by the Governing Board.
18.3 For the first ten (10) years of the establishment of the IILM, the membership of the Governing Board shall consist of up to fifteen (15) Eligible Members as follows:
18.4 For the purpose of Article 18.3, all signatories to these Articles of Agreement shall have priority to become a member of the Governing Board upon fulfillment of the eligibility criteria referred to in Article 18.2 over any other member who is admitted under Article 8.4.
18.5 After the first ten (10) years of the establishment of the IILM, the membership of the Governing Board shall consist of up to fifteen (15) Eligible Members who:
18.6 Each member of the Governing Board shall be represented by its most senior executive officer or such other senior officer, as may be nominated from time to time by the members.
18.7 The office of the Chairman and the Deputy Chairman of the Governing Board shall be rotated annually among the members of the Governing Board based on the earliest date of becoming a member of the Governing Board, and if there is a tie where more than one eligible member becomes a member on the same date, then based on the alphabetical order (in English language) of the country of the member. The Deputy Chairman shall, if still a member of the Governing Board, automatically assume the office of the Chairman at the next annual general meeting of the Governing Board and the next Eligible Member based on the rotation mentioned above shall assume the office of Deputy Chairman. The first Chairman of the Governing Board shall be the representative of the member of the Governing Board from the host country of the IILM and the first Deputy Chairman shall be the representative of the member of the Governing Board whose country is at the effective date of this Articles of Agreement first in the alphabetical order (in English language).
18.8 The representatives of members in the Governing Board shall serve as such without any remuneration from the IILM, but the IILM may reimburse them for reasonable expenses incurred in attending meetings of the Governing Board.
18.9 Any member of the Governing Board that no longer fulfils the criteria under Article 18.2 shall be suspended from being a member of the Governing Board and shall be replaced by the next member based on Article 18.3.
who shall be appointed amongst the members of the Governing Board or their representative.
21.2 Each member of the Board Executive Committee shall be persons of high competence in economic and financial matters and shall be appointed in accordance with the procedures to be set forth in the by- laws to be adopted by the Governing Board.
21.3 Members of the Board Executive Committee shall be appointed for a period of three years and may be re-appointed. The members of the Board Executive Committee shall continue in office until their successors are appointed.
21.4 A Board Executive Committee member shall disclose to the Board Executive Committee any potential or actual conflict of interest or related party interest that may arise from a project, transaction or any other matter being considered by the Board Executive Committee. Such member shall excuse himself or herself from any meetings of the Board Executive Committee whilst the matter is being considered and should not be entitled to vote on the matter.
21.5 The Governing Board shall determine the procedures of meetings of the Board Executive Committee.
25. Privileges and Immunities
For the purpose of Article 9.3(c) the member of the IILM is to consider liaising with the relevant authorities in their jurisdictions for the conferring of the following privileges and immunities:
26.1 Any member may withdraw its membership from the IILM by notifying the Chief Executive Officer in writing of its intention to do so. Such withdrawal shall become effective on the date specified in the notice but in no event prior to six months, or any other period as may be determined by the Governing Board, from the date on which such notice was delivered to the IILM.
26.2 At any time before the withdrawal becomes effective, the member may upon written notice to the Governing Board, renounce its intention to withdraw.
26.3 A withdrawing member shall remain liable for all obligations to the IILM to which it was subject as a member at the date of delivery of the withdrawal notice. A withdrawing member will remain liable after its withdrawal in respect of any obligations it has incurred or will incur by the fact of being a counterparty in any commercial arrangement with the IILM or any of its subsidiaries, special purpose entities or trusts.
26.4 The Governing Board may as it deems appropriate in respect of a member who has served notice of withdrawal, declare that certain of that member‘s rights under these Articles are suspended. Following any such declaration, the applicable member‘s rights will be so suspended.
27.1 A member that fails to fulfill any of its obligations to the IILM or any of its subsidiaries, special purpose entities or trusts may be suspended by the Governing Board by a vote representing not less than a simple majority of the total voting power of the members.
27.2 A member so suspended shall automatically cease to be a member of the IILM one year from the date of its suspension unless the Governing Board during that period decides by simple majority to extend or lift the suspension.
27.3 While under suspension, a member may not exercise any of the rights conferred upon it by the Articles of Agreement, except the right of withdrawal, but it shall remain subject to fulfillment of all obligations.
27.4 If a person ceases to be a member in accordance with Article 27.2 above, and at the time its membership ceases there is an amount unpaid on that member’s shares, then unless agreed otherwise by the Governing Board, that person shall remain liable to pay such unpaid amount notwithstanding its cessation of membership.
28.1 From the time its membership ceases, a member shall no longer be entitled to receive pidends from the IILM. In the case of losses, a member shall not be liable beyond the unpaid amount, if any, of the value of the shares that it subscribes to. The IILM shall subject to the terms of this Article 28 arrange for the purchase of such member‘s shares as part of the settlement of accounts with it.
28.2 The IILM and a member may agree on the withdrawal from membership and the purchase of shares of said member on terms appropriate under the circumstances. The purchase price of the share of a withdrawing member shall be such value as may be determined by the Governing Board following consultation with the IILM’s auditors and on the basis of such other financial advice by any independent party as the Governing Board deems appropriate. If no agreement is reached between the withdrawing member and the IILM, the value shall be determined in accordance to the dispute settlement mechanism provided for in Article 35.
28.3 Payment for shares shall be made by the IILM in such instalments in a currency acceptable to both the IILM and the withdrawing member within six months from the date the member ceases to be a member, as the IILM shall determine, taking into account its financial position provided that if the Governing Board determines that the IILM does not at such time have the resources to purchase such shares, then it may specify a deferred time table for payment. In any event, payment shall be made to the withdrawing member by no later than 12 months from the date the member ceases to be a member of the IILM.
28.4 No amount due to a former member for its shares under this Article may be paid until one month after the date upon which such member ceases to be a member of the IILM. If the operations of IILM is suspended or terminated prior to making payment to a member for its shares, the rights of such member shall be determined by the provisions of Articles 29 to 32 of this Articles of Agreement, as the case may be and the member shall be considered still a member of the IILM for purposes of said Article, except that it shall have no voting rights.
28.5 The Governing Board will distribute on a pro-rata basis, in the manner in which it considers appropriate, any shares purchased from a person who ceases to be a member which may include either:
The members shall have the right and reasonable opportunity to subscribe to such shares and the provisions of Articles 11.3 and 11.4 shall apply to such redistribution mutatis mutandis
28.6 Where the relevant shares cannot be distributed under Article 28.5, the Governing Board may offer such shares for sale to any institution referred to in Article 7 at such price as the Governing Board may deem appropriate from time to time. The IILM may keep the shares until such time it receives offers for subscription
30.1 The General Assembly may, upon the recommendation of the Governing Board, terminate the operations of the IILM by a decision of at least two-thirds of all members. Upon termination of operations, the IILM and its subsidiaries, special purpose entities or trusts shall forthwith cease all activities except those incident to the conservation, preservation and realization of its assets and settlement of its actual and contingent obligations.
30.2 Until final settlement of such obligations and distribution of assets, the IILM shall remain in existence and all mutual rights and obligations of the IILM and its members under this Agreement shall continue unimpaired, except that no member shall be suspended or withdraw and that no distribution shall be made to members except as provided in this Article.
32.1 No distribution of assets shall be made to members until all actual and contingent liabilities to creditors have been discharged or provided for. Such distribution must be approved by the General Assembly by a vote of simple majority of the total number of voting members.
32.2 Any distribution of assets to the members shall be in proportion to their shares and shall be effected at such times and under such conditions as the General Assembly deems fair and equitable. The proportions of assets distributed need not be uniform as to type of assets. No member shall be entitled to receive its proportion in such distribution of assets until it has settled all its obligations to the IILM.
32.3 Any member receiving assets distributed pursuant to this Article shall enjoy the same rights with respect to such assets as the IILM enjoyed prior to their distribution.
32.4 Upon determination by the General Assembly by an affirmative vote of at least two-thirds of the number of the members who hold collectively at least two-thirds of the total outstanding shares, to terminate the operations of IILM:
32.5 Any rights, interests or entitlements to be transferred under this Chapter may be assigned in writing by the member entitled to receive them to a third party, in which case the Governing Board will endeavour to transfer those interests, rights or entitlements to that third party at the cost of the member entitled to them, but will not be liable to the member if it is unable to do so.
33.1 The Articles of Agreement may be amended with consent of three- quarters of the members present and voting at the meeting of General Assembly.
33.2 No twith standing the provisions of Article 33.1, the unanimous agreement of the General Assembly shall be required for the approval of any amendment modifying:
33.3 Any proposal to amend the Articles of Agreement, whether emanating from a member of the IILM or the Board Executive Committee, shall be communicated to the Chairman of the Governing Board, who shall bring the proposal before the General Assembly. When an amendment has been adopted, the IILM shall so certify in an official communication addressed to all members. Amendments shall enter into force for all members three months after the date of the official communication unless the Governing Board shall specify a different date.
34.1 The official language of the IILM shall be English. The English text of this Agreement shall be the authentic text for the interpretation and application of the Articles of Agreement.
34.2 Any question of interpretation of the provisions of the Articles of Agreement, the general rules and the by-laws shall be referred to the Governing Board for decision.
34.3 In any case where the Board Executive Committee has given a decision, any member may require that the question be submitted to the Governing Board, whose decision shall be final. Pending the decision of the Governing Board, the IILM may, insofar as it deems it necessary, act on the basis of the decision of Board Executive Committee.
35.1 Any dispute which arises under this Agreement between the IILM and a member or between members in relation to the IILM shall be resolved by consultation based on the principles of Islamic brotherhood and solidarity.
35.2 Where the parties concerned fail to resolve the dispute in accordance with Article 35.1, the matter should, except as expressly provided otherwise in these Articles of Agreement, be referred to (i) a Dispute Settlement Committee established by the Governing Board or (ii) any arbitral institution as decided by the Governing Board.
35.3 The Dispute Settlement Committee shall be empowered to hear submissions from all the parties to the dispute and others in such manner as the committee shall deem appropriate in all the circumstances. The Dispute Settlement Committee shall then issue its decision in writing and communicate the same to all the relevant parties. The decision of the Dispute Settlement Committee shall be binding on all the parties and there shall be no further right of appeal.
35.4 Where the parties agreed to refer any dispute to any arbitral institution of competent jurisdictions as decided by the Governing Board, it shall be finally settled by arbitration in accordance with the UNCITRAL Arbitration Rules as in force from time to time. The Parties agree to the following:
37.1 The Governing Board shall propose to the General Assembly what part of the IILM‘s net income and surplus after making provision for reserves, shall be distributed as pidends.
37.2 pidends shall be distributed pro rata in proportion to the paid up shares held by each member.
37.3 pidends shall be paid in such manner and in such currency or currencies, as the Governing Board shall determine.
47.1 At its inaugural meeting, the Governing Board shall make arrangements for the determination of the date on which the Corporation shall commence its operation.
47.2 The IILM shall notify its members of the date of the commencement of its operations.
48.1 Each signatory to these Articles of Agreement is designated on the signature pages below either as a Conditional Party or an Unconditional Party. A Conditional Party is a party whose ability to become a member of IILM is conditional upon approvals, consents or authorisations (Approvals) in its home state. An Unconditional Party’s ability to become a member is not subject to such Approvals or that it has met such Approvals prior to signing these Articles of Agreement.
48.2 a. A Conditional Party shall have no rights, duties or obligations hereunder, and shall not become a member of the IILM, until such time as it has notified the Chief Executive Officer that the Approvals required in relation to it have been obtained; except that each Conditional Party shall be legally bound by Article 48.6 hereof.
b. Each Unconditional Party becomes a member on the date of signature hereof as provided by Article 8.1.
48.3 Once the notification referred to in Article 48.2 (a) has been provided in relation to a Conditional Party, that Conditional Party shall have the benefit of and be subject to all of the rights, duties and obligations conferred on and undertaken by members in these Articles of Agreement; and will be required to pay the par value of the shares subscribed by it in lump sum within  days of so becoming a member.
48.4 If a Conditional Party has not provided the notification referred to in Article 48.2 (a) prior to the Long Stop Date, it will be deemed for all purposes not to have been a signatory hereto. For these purposes, Long Stop Date means in relation to a Conditional Party the date falling 12 months after the date of signature hereof or such later date as may from time to time be specified in relation to that Conditional Party by the Governing Board.
48.5 For purposes of the provisions of Article 18 relating to the composition of the Governing Board, each Conditional Party that becomes a member of IILM will be deemed to have become a member on the date hereof. The Chief Executive shall be entitled to implement such transitional arrangements in relation to the composition of the Governing Board as he may determine are appropriate in light of the provisions of this Article 48.
48.6 Each Conditional Party agrees to use reasonable endeavours to obtain all Approvals required in relation to it prior to the date falling 12 months after the date of signature hereof or such later date as may from time to time be specified in relation to that Conditional Party by the Governing Board.
48.7 This Article 48 overrides all other provisions in these Articles of Agreement.
Important Note Regarding The International Islamic Liquidity Management Corporation Act 2011 (Act 721)
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Privileges and Immunities
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