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. 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, according to a source close to and a person briefed on the situation.
“Dana have not applied to the UAE courts to have the hearing on 3rd Oct adjourned because they believe the application would be unsuccessful,” said the person briefed.
The company is currently under an injunction from the Sharjah court in the UAE, which barred it from making oral submissions at the hearing held on Monday (25 September). In hearings held last 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.
The anti-suit injunction was issued by the Sharjah court at the request of three of Dana’s major shareholders. The company did not challenge it.
In the High Court, Mr Justice Leggatt ruled on Friday (22 September) that the substantive hearing on the English law matters should proceed earlier this week, but Dana was given the chance to present its oral submission at a later date, subject to obtaining the UAE court’s approval for such appearance.
However, Leggatt J subjected the adjournment to a number of conditions: “I will adjourn the trial to 12 October only if Dana Gas gives an undertaking to the court that it will use its best endeavours to ensure that the hearing of the proceedings in Sharjah currently listed for 3 October is vacated and does not proceed on that day,” he said in his 22 September judgment, before adding that he reserved “the right to vacate any hearing listed for 12 October and to proceed directly to give judgment if there is any development in the meantime which, in the opinion of the court, warrants doing so”.
Dana had until yesterday 4 PM UAE time to obtain the adjournment from the Sharjah court of the 3 October hearing, which is now expected to go ahead as scheduled. The present dispute opposes Dana Gas and holders of cUSD 850m of its sukuk debt which is due to mature on 31 October 2017. The debt was issued in May 2013 in the context of the restructuring of similar debt issued back in 2007.
The anti-suit injunction also bars other stakeholders – including the sukuk’s trustee Deutsche Trustee Company – from taking part in foreign legal proceedings relating to the sukuk. As a result, major holder of the debt, BlackRock Allocation Fund, is acting as a party to the dispute in the English proceedings.
Other original parties to the case are Deutsche Bank AG and Commercial International Bank (Egypt) SAE.
Richard Handyside QC, who represented the trustee earlier in the summer before accepting to present the case on BlackRock’s behalf, is leading the charge on behalf of BlackRock. On Monday, as reported, he dealt extensively on what his side perceived as Dana Gas’s mistakes in their interpretation of the English law-governed contract between them and their sukuk creditors.