Court turns down contractors' call for injunction against SmartCity Malta

Contractors Ballut Blocks Services and Bonnici Bros Limited call for injunction against SmartCity has been revoked by the First Hall of the Civil Court, and has left the case to be decided by a Court of Arbitration.

In a judgment handed by Judge Joseph Azzopardi, the Civil Court denied the request by the two companies, for the issuance of a prohibitory injunction against SmartCity Malta for it not to call in a contractual bank guarantee which was laid as performance security for their works.

Ballut Blocks Services and Bonnici Bros Limited had initially registered a special collateral privilege of €2.5 million against Smartcity Malta after they halted works on the site, for not receiving payments for the same works.

The construction companies had refuted Smartcity’s allegations that the contracted work was not delivered on time, and that it was to call in the bank guarantees according to the contract for breach of contract.

In its judgment, the First Hall of the Civil Courts noted that although both parties are standing their ground, the Code of Civil Procedure categorically states that “a court may not issue any prohibitory injunction, unless it amply satisfied that it is needed to protect the claimants’ interests and that such interests are clear in their first instance.”

Mr Justice Azzopardi said that should his court uphold the request by the claimants, it would put itself into a position whereby it would be taking a prejudicial side on a contractual matter, which has already been submitted for litigation before a Court of Arbitration.

The court described the case before it between the contractors and SmartCity Malta as “too complex”

“The court feels that it should not – for the time being – intervene. If a bank which is guaranteeing payment, feels that under the terms of agreement it should be paid, then it is not for the courts to interfere at this stage.”

In its conclusion, the court also noted that should the guarantee be called in, the claimants would not suffer “irreversible damages” and have not submitted evidence that SmartCity Malta doesn’t possess enough collateral to make good for the claim.