The Royal Courts of Justice in London has ruled in favour of creditors in a dispute with Dana Gas, which now must repay $700 million raised as part of a Sukuk. English Law underpins the majority of global sukuk.
Dana Gas had claimed the Sukuk was no longer compliant with Sharia law. Mr Justice Leggart said the view held by Dana Gas is “untenable and flatly inconsistent with its express wording” of the terms.
“The grounds relied on by Dana Gas are all based on allegations that part or all of the transaction is unlawful or invalid or cannot lawfully be performed as a matter of UAE law,” the judge said.
“The suggestion that the existence of contractual rights and obligations depends on the parties’ subjective states of mind is not consistent with the objective approach which is fundamental to the modern English law of contract.”
Download the full judgement: Dana-Gas-judgment.
“The outcome in the UK court was not unexpected given Dana Gas was not able to participate,” said Dana’s advisory firm Houlihan Lokey. “We do not expect this to impact the final legal outcome which will come from the Sharjah Courts. This is just the beginning.”
The Sharjah court hearing is scheduled for Christmas Day. Dana said in a statement: “We hope all parties will properly participate to expedite matters in the interests of all concerned”.