(Bloomberg) -- A London lawsuit over $700 million in Shariah-compliant bonds issued by Dana Gas PJSC will go ahead despite a last-minute United Arab Emirates court order that attempted to stop the company from taking part in the trial.

Dana Gas stunned investors and the Islamic finance community when it announced in June that it had reviewed its own bonds and found they were not Shariah compliant. Bondholders, led by Goldman Sachs Group Inc. and BlackRock Inc., hired investment bankers and then lawyers when it became clear they were facing losses of 90 percent or more.

But Tuesday, on the first day of the trial, lawyers said an order issued by a court in the U.A.E., where Dana is based, prevented the company from participating in the London case. Judge George Leggatt postponed the start of the trial until Thursday and said that the dispute could go ahead without Dana.

"That is very much a last resort," Leggatt said at a hearing, ruling that English courts have the right to decide English legal issues. "It is an essential ingredient of a fair proceeding that each party should have the opportunity to participate."

BlackRock and Dana Gas’ spokespeople weren’t immediately available to comment by email and telephone. Dana viewed a last-minute settlement offer by the ad hoc committee last week as unrealistic, according to a person familiar with the matter.

Goldman, BlackRock Offer Dana Deal to End $700 Million Debt Saga

BlackRock’s attorneys said the U.A.E. order, obtained by three Dana Gas shareholders, was a last-minute tactic to halt the proceedings.

"Dana deliberately frustrated and colluded” to obtain a ruling in the U.A.E. city of Sharjah “to prevent these proceedings," Robert Anderson, a lawyer for BlackRock told a London judge Tuesday.

Neil Kitchener, Dana’s lawyer, said that the U.A.E. order effectively halted the London case because it would not be possible to have a trial without the energy producer.

Sunday Order

Sunday’s U.A.E order was obtained by the Dana Gas shareholders in Sharjah to prevent any London trial from going ahead until the U.A.E. proceedings had been resolved, the judge said.

BlackRock, which asked to become a party in the case, pushed for the proceedings to resume as soon as possible, arguing the company could be targeted by a similar injunction.

"It is simply too important and too much money to kick it down the road," said Richard Handyside, another BlackRock lawyer. 

The case is Dana Gas PJSC v. Dana Gas Sukuk, High Court of Justice, Queen’s Bench Division, Commercial Court, Financial Listings, FL-2017-000375

With assistance from Zainab Fattah. To contact the reporters on this story: Kit Chellel in London at cchellel@bloomberg.net; Jeremy Hodges in London at jhodges17@bloomberg.net. To contact the editors responsible for this story: Anthony Aarons at aaarons@bloomberg.net Dana El Baltaji.

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