Dana Gas did not appear yesterday (3 October) at a hearing regarding the validity of its sukuk under UAE law in the Sharjah court, said two sources close to the situation. The case was brought forward at the request of three Dana shareholders from 25 December. One of the sources added that Dana Gas could not take part in the hearing due to an anti-suit injunction obtained in the UK by major bondholder, US-based asset manager Blackrock.
As reported, ahead of a UK hearing originally scheduled for 18 September, Blackrock obtained an injunction stopping Dana Gas from frustrating the English process. The company is also subject to a English court order under which it must lift an injunction in the UAE and stay proceedings there.
The Sharjah judge has reserved judgement, but it has not been delivered yet, the source added. Several sources away from the situation were expecting the judge to rule on the validity of the company’s two sukuk intruments, both of which are maturing at the end of this month.
The Sharjah court previously moved the hearing date from 25 December to 3 October on the application of the intervening shareholders. Dana Gas did not apply for this to happen, according to the first source.
On 17 September, and shortly before the UK trial was scheduled, the Sharjah court also acceded to requests from three Dana Gas shareholders to grant an anti-suit injunction preventing Dana Gas, Deutsche Trustee and the delegate from participating in the English High Court case until the Sharjah hearing on the lawfulness of the Islamic bonds under UAE law had been decided.
The UK judge in charge of the dispute between Dana Gas and its creditors under its sukuk debt is expected to issue his judgment on the English law matters of the case without hearing the company’s oral submissions, as reported. This is because the UAE-based independent oil & gas producer failed to apply for – and obtain – an adjournment of a hearing on the matters arising from the UAE law-governed Mudarabah leg of the dispute.
Dana is unable to appeal against the UK ruling due to the presence of the UAE anti-suit injunction. From a tactical perspective, it may seek a lifiting or a variation of the order, suggested a third source clost to the situation.
In hearings held the prior week in the UK High Court, Dana had urged the court to postpone any substantive hearings to the second half of October, hoping that by then it would be able to have the UAE court’s anti-suit injunction lifted or amended, and therefore take part in the proceedings. As it failed to stop the proceedings held yesterday, it lost the opportunity to make oral submissions on 12 October, as reported.
The company did not challenge the anti-suit injunction when it was issued by the Sharjah court.
Click here for a breakdown of last week’s proceedings in the UK.