Former Cabinet minister Don Polye is arguing that the government's decision to acquire the loan is in breach of PNG's Constitution.
He has applied to the National Court in Port Moresby to grant interim orders to declare the decision to procure the loan null and void.
Polye is also seeking to prevent Prime Minister Peter O'Neill and current Treasurer Patrick Pruaitch from taking further steps to procure, secure and control the loan from Swiss investment bank UBS, or transact the purchase of the 10% shares equity from Oil Search until further orders of the court.
Additionally, Polye asks the court to restore him to his post as treasurer on the grounds that his sacking was carried out "for a reason that was unconstitutional, unlawful and invalid" and is requesting the court prevent Pruaitch from performing ministerial duties and responsibilities.
The country's Ombudsman Commission had attempted to stall the loan to ensure it was legally compliant.
But the deal has already been concluded and the shares in Oil Search transferred to the state, meaning the ombudsman will only be able to review the loan process rather than preventing it from taking place.
Oil Search funded its acquisition of a 22.8% interest in the Elk-Antelope gas discovery in PNG through the placement of 149.9 million shares to the PNG government, giving the company a strategic interest in the country's largest underdeveloped gas resource.
Polye was sacked last month after he refused to sign the loan documents, prompting O'Neill to accuse the former treasurer of creating instability in the PNG government.