State Advocate welcomes Vitals appeals court ruling

The State Advocate has welcomed the Court of Appeal's ruling that says it has the power to proceed against Steward Health Care, insisting the action has already been initiated in international arbitration proceedings.

“The Court of Appeal has for the most part confirmed the judgment of the First Hall Civil Court of 11 July 2024, but only varied it to confirm the independence and autonomy of the State Advocate to pursue the right of action arising specifically from Article 33 of the Government Lands Act (Chapter 573 of the Laws of Malta), which is an action wholly different to that which the plaintiffs demanded the State Advocate to institute,” a statement released on Monday afternoon reads.

During proceedings on Monday, the Court presided by Chief Justice Mark Chetcuti, and Judges Giannino Caruana Demajo and Anthony Ellul declared that “the State Advocate does have that power, and has the duty to react”.

The Nationalist Party had argued that the State Advocate must act in the public interest and ensure Malta recoups the €400 million paid to the hospitals concession. The PN wanted the court to force the State Advocate to take legal action not only against Steward but also against government officials. The first court had ruled against the PN.

The Appeals Court has now varied the first judgment in that it reiterates that the State Advocate does have the power to take action.

“The Court of Appeal clarified that the State Advocate is empowered, but not duty bound, to pursue that right of action. According to the Court of Appeal, the State Advocate has the final say on whether he is to proceed or otherwise with that right of action,” the Office of the State Advocate said on Monday. “This discretion naturally includes decisions on the right time and right forum where such actions ought to be brought in the interest of the State, as confirmed by the Court of Appeal in paragraph 46 of its judgment. In fact, the Court of Appeal extended this line of thought to any person empowered by Article 33 of the Government Lands Act, which would include the Hon. Leader of the Opposition and Hon. Dr Adrian Delia themselves.”

It said that following the Court of Appeal’s judgment on 23 October 2023, the Government of Malta instructed the State Advocate, and co-counsel, to claim against Steward in the International Chamber of Commerce (ICC) arbitration, amongst other things, the rescission of the contractual framework underpinning the concession relating to the three hospitals.

“In that arbitration, government is claiming that the parties to that contractual framework, being, Government and Steward, must be restored to the position they were in prior to the contract (restitutio in integrum) based on Article 1209 of the Civil Code, a position which is contested by Steward in the ICC arbitration,” the statement says.

It pointed out the government has already made submissions on this issue and has also submitted expert reports on Maltese law and on the quantum of compensation due because of the rescission. “The Court of Appeal’s judgment of 2 December 2024 is aligned with the instructions given to the State Advocate by government and implemented by the State Advocate in the pending proceedings.”

“The proceedings of the ICC arbitration are private, and Government has been advised to keep it so to preserve its position in the arbitration and not to jeopardise its defences and counterclaims,” it said. “Therefore, as things stand today, the State Advocate, on the instructions of the Government of Malta, is already pursuing a defence and claim in the arbitration as contemplated by the Court of Appeal in its judgment of 2 December 2024.”

The Government of Malta’s and the State Advocate’s rights and privileges are hereby fully reserved and not waived, it said.