DUBAI: United Arab Emirates energy firm Dana Gas DANA.AD said on Sunday it had received a new injunction from the English High Court restricting its ability to pay dividends or increase its debt.

The injunction is the latest salvo in a complex legal battle in the UAE and Britain which began last year when Dana halted payments on its $700 million of Islamic bonds, arguing the sukuk had become unlawful because of changes in Islamic finance.

Since then, sukuk holders have been trying to force the company to redeem the sukuk. The latest order was obtained by Putnam SPV 4 LLC, a special purpose vehicle managed by Contrarian Capital Management, Dana said in a statement.

Dana said in late March that it would seek shareholder approval on April 11 to pay a cash dividend for 2017, its first in several years. The dividend would be worth 5 percent of capital or about 349 million dirhams ($95 million).

But the English High Court order blocked Dana from making dividend payments unless it also sets aside money to redeem the sukuk, according to a copy of the order provided by Dana.

It also prohibited Dana from increasing its debt by more than $25 million. The company and partners in its consortium have said they plan to invest in boosting gas production in Iraq's Kurdistan region.

The restrictions are to apply until the English High Court holds a further hearing on the matter on April 20.

"The Company plans to challenge the Order vigorously, and will claim any damage from Contrarian and any party assisting it (directly or indirectly) that Dana Gas and its shareholders may suffer consequent to it," the company said in its statement.

Last year, Dana launched an effort in a court in the emirate of Sharjah to have the sukuk declared invalid. Last month, the court ordered the company to continue that effort, but the latest English High Court injunction ordered Dana not to take any further steps in the Sharjah proceedings.

(Reporting by Davide Barbuscia and Andrew Torchia Editing by Susan Fenton) ((andrew.torchia@thomsonreuters.com; +9715 6681 7277; Reuters Messaging: andrew.torchia.thomsonreuters.com@reuters.net))