National Bank saga: shareholders to be awarded over €111 million
Bank taken over by the government in 1974
Two sets of shareholders, deprived without compensation of their shares in the former National Bank of Malta when it was taken over by government in 1974, were awarded a total of over €111 million as material compensation for the breach of their fundamental rights.
Two judgements delivered yesterday brought the curtain down on the long-standing saga over the controversial takeover, with a number of the original shareholders now represented in court by their heirs.
The two cases, filed in 1992 by a total of 82 original applicants, revolved around the saga that kicked off in December 1973 when then Labour Prime Minister Dom Mintoff updated parliament about the situation of the National Bank of Malta.
He also spoke about plans to take over the bank, explaining that that way forward had been suggested by a representative of the same bank.
A week later, on December 12, 1973, the administration of the
National Bank and the Tagliaferro Bank was “temporarily” taken over by an Administrative Council.
In March 1974, the assets and debts of NBM were transferred to Bank of Valletta Limited by public deed published by Notary Maurice Gambin.
All 82 applicants were among those shareholders who opted not to sign an agreement to transfer their shares to the government without payment.
Eighteen years after that transfer, they took their grievances to court, claiming that their fundamental right to peaceful enjoyment of their property was breached through the takeover for which they received no compensation. The two cases filed by 33 and 49 applicants respectively, progressed along parallel lines before the First Hall, Civil Court in its constitutional jurisdiction.
When delivering judgment today, Mr Justice Joseph R. Micallef did not uphold the applicants’ request to revoke the legislative instruments by virtue of which the takeover was effected.
Such revocation would not turn back the clock since all NBM assets had since been transferred to BOV.
Moreover, no evidence was put forward to prove that those laws were enacted in breach of the constitution or through non-observance of legal rules.
Nor did the applicants produce evidence about the current state of their company.
And in an earlier pronouncement by the Constitutional Court, the legislative intervention 50 ago was deemed to be “useful and necessary in the circumstances” at the time.
When assessing what remedy it ought to mete out, the court had sought the opinion of experts in the field.
However, the parties had regrettably spent “considerable time” bickering over the experts suggested by both sides, remarked the judge.
And even when they finally agreed on a number of experts, they later “harshly criticised” those experts’ work and conclusions. The court declared that the shareholders’ fundamental rights had been breached, stating that declaring the violation was not a sufficient remedy.
It therefore proceeded to liquidate material compensation for the breach after taking note of several factors, including the lapse of 18 years between the takeover and the filing of the court cases, apparently indicating that the shareholders “somewhat tolerated the breach.”
When all was considered, the court declined their request for moral damages, limiting itself to material compensation payable by the prime minister and the finance minister as respondents.
Thus, 33 applicants were awarded €44,737,100 while 49 applicants got €66,427,800 plus legal interest at the rate of eight per cent running from date of judgment.