Abu Dhabi's sovereign wealth fund and its lawyers at Quinn Emanuel Urquhart & Sullivan kept hitting brick walls in their dispute with Citigroup Inc. over a soured $7.5 billion investment deal. But things are finally looking up for the Abu Dhabi Investment Authority after an appeals court cleared the way for a new arbitration of the fund's claims.

A three-judge panel of the U.S. Court of Appeals for the Second Circuit refused to block the arbitration on Wednesday, siding with Quinn Emanuel's Sanford Weisburst. The panel rejected arguments by Citi and its lawyers at Paul, Weiss, Rifkind, Wharton & Garrison that ADIA can't rehash its claims over the investment agreement.

Weisburst said Wednesday that he's pleased with the ruling, which “follows long-standing Second Circuit precedent.” Weisburst argued for ADIA at the Second Circuit opposite Paul Weiss' Leslie Fagen. Fagen declined to comment, as did a Citi spokeswoman.