Earlier this year Dana Gas surprised the Islamic Finance industry by revealing that it was not planning on redeeming its sukuk bonds worth $700 million under the grounds that they were no longer Shariah compliant and therefore unlawful in the UAE. Initially, Dana Gas released a statement that they were seeking to restructure their bonds to focus on short-to medium-term cash preservation. The latter plan was subsequently abandoned and what ensued following the assertion of illegality was a series of claims and injunctions in the UK and Sharjah. The judge ruled today that a trial will continue next week.  

As of August 10, 2017, the Dow Jones Sukuk Total Return Index tracked 73 sukuk with a market value of $74 billion. Therefore, it is clear that whatever the outcome of the Dana Gas case it will serve as a significant precedent for the Islamic Finance market in terms of the redemption of future sukuk. It should also serve as a driving force for the UAE to ensure they set and monitor standards more vigorously moving forward.