Three international banks have launched legal action against an investment vehicle owned by the ruler of Dubai over a default of about $10bn of debt.

The UK’s Royal Bank of Scotland, South Africa’s Standard Bank, and Germany’s Commerzbank have launched the joint action in London against Dubai Group, after walking out of debt restructuring in July.

The banks said in a statement that “our preference was always to conclude an agreement without formal legal proceedings and we therefore remain open to such an outcome if an acceptable commercial resolution is forthcoming. However, to date no satisfactory proposal has been put forward”.

Despite a wave of debt restructurings taking place in Dubai since the emirate’s property bubble burst in 2008, this is the first time that a large creditor has attempted legal action to get repaid.

Dubai Group is owned by Dubai Holding, the investment vehicle owned by Sheikh Mohammed bin Rashid al-Maktoum. It has been in restructuring talks with its lenders since defaulting on debt repayments in 2010.

The government walked away from the negotiations in January, leaving Dubai Group to come up with a deal without any state support. A subsequent proposal, still under consideration by other lenders to the firm, suggesting extending the debt by up to 12 years for some lenders, something which the three international banks wanted to avoid.

Dubai Group said in a statement, “We believe that we can reach a consensual agreement with our creditors”.