The Golden Belt Sukuk Company, a special purpose vehicle for al-Saad Group sukuk, is suing Paris-based BNP Paribas over a $650m Islamic finance deal, according to Bloomberg.

It claims that BNP Paribas failed to obtain a ‘wet-ink’ signature from chairman Maan al-Sanea.

Under Saudi law, some documents must be signed in person, while Golden Belt alleges BNP Paribas only secured a digital signature. This would invalidate the $650m sukuk.

Golden Belt 1 certificates are currently worth less than four cents on the dollar, according to Bloomberg data.

Saudi Arabia’s AH al-Gosaibi Group defaulted on SR22bn-24bn ($5.9bn-$6.4bn) worth of debt in 2009.

Since then, the Al-Gosaibi family and Al-Sanea have been embroiled in legal disputes over who is responsible for the debt, as well as how al-Gosaibi can chase recoveries of assets from Al-Sanea to repay the outstanding debts.

Al-Sanea and some senior members of the Al-Gosaibi family have been barred from leaving Saudi Arabia.

Al-Sanea is related to the Al-Gosaibi family by marriage.

At creditors meeting in June 2015, improved terms on the debt were offered to creditors.

The most recent offer guarantees a minimum of about 28 cents repayment for each dollar owed by the Al-Gosaibi Group, backed by equity and property assets, according to UAE press. This represents around 40 per cent more than was offered in 2014, and was welcomed by major creditors.

The Saudi Royal Court froze AH Al-Ghosaibi’s assets in response to the dispute. A debt settlement will only be possible if a united front of creditors can persuade the Royal Court to unfreeze the assets.

Al-Sanea was in charge of the Bahrain-based International Banking Corporation (TIBC) bank, which allegedly issued fraudulent loans to secure funding from international banks. TIBC was owned by AH Al-Gosaibi.

Al-Sanea has always rejected claims of alleged wrongdoing.