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Abu Dhabi, UAEWednesday 26 September 2018

Dana Gas repeats challenge to English court sukuk ruling

Energy firm seeks permission to appeal November ruling

Dana Gas wants to appeal an English court decision related to its $700 million sukuk. Courtesy Dana Gas
Dana Gas wants to appeal an English court decision related to its $700 million sukuk. Courtesy Dana Gas

Dana Gas will again challenge an English court judgment handed down in November against the company, as part of a widely-watched dispute with creditors over the non-payment of $700 million worth of sukuk.

The Sharjah-based gas operator will file an application for permission to the English Court of Appeal to reconsider the ruling in November by Judge George Leggatt, which said that aspects of its English-law sukuk purchase undertaking were valid and enforceable, the company said in regulatory filing to the Abu Dhabi stock exchange on Monday.

Last year, Dana stunned sukukholders – which include BlackRock and Goldman Sachs – when it claimed the agreements for the Islamic bonds (which matured in October) were no longer valid due to changes in Sharia law. The company is involved in court disputes in England and Sharjah over the sukuk’s terms.

The application to the English Court of Appeal comes despite a previous attempt to set aside the judgment in a three-day hearing that concluded in early February ended in failure, with Judge Leggatt refusing the company permission to appeal his decisions.

The judge also granted an anti-suit injunction at the request of creditors following the February hearing, which permanently restrained the company from pursuing proceedings over the sukuk’s validity in the Sharjah Courts.

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“It is clear that to permit Dana Gas to advance the same claim at the same time in different jurisdictions would be vexatious and oppressive,” said the judge.

The company said it and its English lawyers believe that "the judgement and orders made by [Judge Leggatt] have not given due consideration to the company’s strong arguments regarding determination of foreign law issues...particularly that the UAE Courts are the appropriate forum to determine the UAE law issues which are closely intertwined with Sharia principles which the UAE Courts have to apply as a matter of public policy and public order.”

The dispute between Dana and sukukholders is being closely watched by stakeholders in the Islamic finance industry, who are concerned that a judgement in the energy company’s favour may set a precedent for other sukukholders.

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