Islamic finance operators are scrambling to tighten the industry's rules in order to make sure other companies cannot take the same path as Dana Gas, which this week forced a $700 million debt restructuring.
Global standards are likely to become more detailed and explicit and a shift to centralised regulation may accelerate after the United Arab Emirates firm reached a conditional deal with creditors over a contested sukuk issue.
Dana shook the $2.5 trillion global industry last June, saying it would not redeem its sukuk on maturity. It proposed swapping them for new sukuk with lower profit rates.
The original sukuk used a mudaraba structure, an investment management partnership, which Dana said had fallen into disuse, making the instruments invalid under UAE law.
Its creditors won some rounds in the legal battle that followed, but Dana got much of what it wanted in the settlement, which lets investors exchange their sukuk for new three-year instruments with a 4 percent profit rate.
Investors have been worried by the prospect of other issuers avoiding redeeming their sukuk by saying conditions have changed. Market players may be more wary of Islamic bonds issued in the UAE after one of its courts declined to enforce English court rulings favouring creditors in the Dana case.
Khalid Howladar, managing director of Islamic finance advisory firm Acreditus said."It will definitely alter international risk perception around UAE local law enforcement and sukuk in general, driving up pricing or reducing liquidity,"