London Court Adjourns Dana Gas Sukuk Trial

A London High Court judge has adjourned hearings on whether the United Arab Emirates' Dana Gas must redeem $700 million of Islamic bonds when they mature at the end of this month, sources familiar with the matter said on Friday.

 

High Court judge George Leggatt is expected to resume the hearings by Nov. 13, the sources said.

 

In a complex case that is being fought in British and UAE courts, Dana is refusing to make payments on the sukuk on the grounds that changes in Islamic finance over recent years have made the bonds unlawful in the UAE.

 

The dispute may have implications for issuers and holders of Islamic debt around the world, as any win by Dana could set a precedent for other companies to treat their outstanding sukuk in a similar fashion.

 

Judge Leggatt had originally been expected to rule on the case as soon as September, but proceedings have been slowed by manoeuvrings in the UAE courts.

 

Some of Dana's shareholders obtained an injunction in a court in the emirate of Sharjah preventing the company from taking part in the London hearings. Dana has applied to a Sharjah appeals court to have that injunction changed, but this week the appeals court adjourned without making a decision.

 

Meanwhile, Dana has applied for permission to appeal against the London High Court’s decision to proceed with the English trial while Dana was absent. It is also seeking to appeal the London High Court’s decision last month to allow fund manager BlackRock (BLK), a sukuk holder, to join the trial.


(Reporting by Davide Barbuscia; Writing by Andrew Torchia; Editing by Mark Potter)