A complex trial on the validity of a Dana Gas Islamic bond will continue on Monday in London amid an ongoing dispute between bondholders including BlackRock and the Sharjah-based company.
The case will continue despite an injunction from a UAE court preventing Dana Gas and some of its bondholders from participating.
"The trial will proceed on Monday," said the UK high court judge George Leggatt. "I will treat the defendants' counterclaim as the primary claim and will hear oral argument on behalf of BlackRock as intervenors. They will be opening the case."
Dana Gas said at the end of July it was withdrawing an offer to shareholders, which included BlackRock, the world's biggest asset manager, of its US$700 million sukuk in an ongoing dispute and would pursue a resolution of the matter through the courts.
The company said at the end of July it had actively sought consensual agreement with shareholders of the sukuk and attempted to engage directly with the Ad Hoc Committee to pursue an offer but that these attempts were rejected.
Dana Gas has been in a testy stand-off with representatives of its sukuk holders since May, when it said it would not be able to repay on time this year, and sought to negotiate a refinancing on new terms.
The most controversial aspect has been its June 13 move, seeking a Sharjah court ruling that declares its two outstanding mudarabah-type sukuk non-compliant with Sharia.
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The chief executive of Dana Gas, Patrick Allman-Ward, in July made a direct plea to holders of its $700mn sukuk to hold talks over new financing terms.
In a scheduled open phone call, Mr Allman-Ward set out to explain why the company had its own sukuk declared non-compliant with Sharia earlier this year, why it felt that new terms, less attractive to bondholders, were justified and why Dana Gas was in a much better position now - at least in terms of its potential assets value - than when the company was forced to restructure its Sharia bond financing five years ago under the duress of a default declaration.
On July 16, Dana Gas said in a statement that a court ruling by the high court of justice in London on June 5 was favourable to it because it upheld an injunction preventing bondholders enforcing its claims. But, at the same time, the judge ordered Dana to cancel an injunction in the Sharjah court where it has been trying to have the sukuk deemed unlawful.