A €20.4 million garnishee order served on Malta-based bank Fimbank plc on the request of a Maltese company over a project in Libya has been temporarily suspended giving time to the bank to make its submissions.

The garnishee order was approved by Mr Justice Silvio Meli on the request of turnkey contractor Azrow International Trading Company Ltd, which entered into a business deal to take charge of the construction of a motor vehicle recycling plant in Libya. The building of the plant is in its final stages.

Among the terms and conditions of the agreement, the other party to the contract undertook to pay the company, through a letter of credit, the full value of the project, €29 million. The letter of credit was issued by the National Commercial Bank of Libya and received and confirmed in Malta by Fimbank.

The first claims made by Azrow against the letter of credit (a legal letter with which a company can get paid) were honoured by Fimbank. However, at one point, Azrow was informed by Fimbank that the National Commercial Bank of Libya claimed there was some default in their internal procedures. In turn, Fimbank stopped honouring the letter of credit. This led the company, as the beneficiary, to file a suit against Fimbank in the First Hall of the Civil Court, asking it to honour its obligations.

On Friday, Azrow filed an application for the issue of a precautionary garnishee order against Fimbank for the sum of €20,481,850, which was the balance it was due of the total amount.

Mr Justice Meli upheld the request.

Fimbank yesterday filed an application calling on the court to revoke the warrant.

Mr Justice Meli temporarily suspended the garnishee order and gave the company until today to file its reply to this request.

Lawyers Shazoo Ghaznavi and Robert Galea represented the company.