DUBAI (Reuters) - At its peak around five years ago, the Al Sari family owned the largest independent oil trader in the Gulf region, with branches in London and Singapore, and a fleet of dozens of ships.

These days, its FAL Oil Co trades more in controversy than oil.

It owes a consortium of lenders nearly $900 million, including about $200 million to Standard Chartered PLC. It is contesting a worldwide asset freeze granted by a London court to the Royal Bank of Scotland. And it is suing its home government of Sharjah - one of seven emirates that make up the United Arab Emirates - in a rare public fight over a disputed $750 million fuel-oil bill. The company even hired a British debt collector to chase the emirate for payment.

These are just some of the many bitter courtroom battles being waged by FAL Oil, once a pillar of business here in the UAE. Many of the details have not been made public until now; the colorful claims and counterclaims include allegations of missing oil, disappearing ships and clandestine trips to Iran. Last year, the U.S. State Department sanctioned FAL Oil for allegedly selling petroleum products to Iran in 2010, something the firm denies but has not challenged legally.

The remarkable fall of FAL Oil sheds light on the sometimes murky world of oil trading. It also shows how the distinction between family and business is often blurred in the Gulf.