Dana Gas to lift UAE sukuk order

dubai — Dana Gas will lift an injunction it obtained in a UAE court protecting it against claims on $700 million of Islamic bonds to comply with a London court order, a source told Reuters.

But Dana believes a stay on proceedings in the emirate of Sharjah will still permit it to resume its legal action there, if it wishes, after a London hearing scheduled for September.

The case is being closely watched by the Islamic finance industry around the world because it could affect the structuring and pricing of future issues by other companies.

Holders of the sukuk, which Abu Dhabi-listed Dana wants to restructure on the grounds that changes in Islamic finance since they were issued four years ago have made the bonds unlawful in the UAE, have fought the company in the London High Court.

“These cases raise serious and complex legal issues which include the applicability of different legal jurisdictions. The ultimate answer will only be known after both the UK and the UAE proceedings have reached their final outcome,” the source said.

Dana said this week that it remained keen to engage with holders of the sukuk and reach a restructuring agreement. Last month, it applied to the Sharjah Federal Court of First Instance to have the sukuk declared unlawful, and obtained an injunction blocking claims for payments pending a ruling.