The arbitration scam

How gullible can the Maltese electorate be? The International Chamber of Commerce (ICC) is not a court. It is a chamber of commerce that provides services to industry and organisations, including an arbitral tribunal to settle disagreements between parties that have entered into a contract between themselves.

 Usually when the parties fail to agree, they have two options – either take the matter to the courts of justice in the country that has jurisdiction, or agree between themselves to submit their disagreement to a panel made up of three members, one each chosen by each of the parties and a chairperson offered by the chamber of commerce itself as a neutral member. The parties agree to accept the interpretation of the panel, thus avoiding publicity, loss of time, and costs.

In the case of the hospital contracts in Malta, the parties, i.e. the Maltese government on one hand, and Vitals Global Healthcare and Steward Health Care on the other, had a disagreement about a side agreement entered into by Konrad Mizzi that promised €100 million to be paid should the initial agreements be declared null and void.

The local courts in first instance and in appeal had found, that the parties, i.e. the Maltese government through its ministers and senior officials on one hand, and Vitals/Steward on the other, had acted with malicious intent before the contracts, during the tendering process and during the performance of the contracts.

They colluded to commit fraud and to rob Malta of four thousand million euros over 10 years. The courts declared, under the legal adage that ‘Fraus Omnia Corrumpit’, that all contracts entered into, including the side letter signed by Konrad Mizzi on behalf of Malta, were null and void.

The parties were declared to be fraudulent to the tune of at least €400 million, which was the amount found out by the auditor general reports. So, the first option to bring the disagreement between the two sides to the Maltese courts was out of the question.

Our two parties are not normal businesses, and their contracts were declared null and void by the applicable highest courts of the land.

So, they are disputing how to share what they have taken illegally, and the panel of the ICC should have thrown out their case since their claims and counter-claims did not exist in any valid contract.

The decision of the panel is not a sentence like a court of law; it is simply information to the disputing parties how the panel saw the issue and resolved it.

I think this is just another act of collusion between the two fraudulent parties to try to fool the Maltese electorate to believe that an international panel had studied the case and overruled the judgments of the Maltese courts. Nothing is further from the truth.

What is astonishing from the snippets of information made public so far, is that the amounts that apparently changed hands from the time of the contracts and their annulment two years ago was not the €417 million that the auditor general found out, but more than double that. The colluding parties seem to have admitted and agreed before the panel that almost €900 million, or nine-tenths of a billion, had been paid out to Vitals/Steward in exchange for equivalent services.

How the auditor general, with all the investigative and accounting powers of the office, uncovered only €417 million, baffles me completely.

The fact that former finance minister Edward Scicluna oversaw senior officials within the Ministry of Finance and the Central Bank as they paid out a further €480 million over a number of years, only amplifies the seriousness of this fraud against the citizens of Malta.

Daphne Caruana Galizia was on the right track. This is probably the greatest crime yet committed against Malta.

The present government, led by the legal adviser to the former government of the same party that had to resign, is trying to fool the people and brush the affair under the carpet.

Do not believe them. This is the final bluff of the fraudsters, and the price to get Steward to go along with it was not 30 pieces of silver but €5 million that the government will pay out.

This represents the lowest point of crime and fraud, and it should once again – just as in 2019 – drive people back onto the streets to demand that these fraudsters be removed from office.

Almost a billion that was taken, half of which was invisible to the auditor general, with nothing to show for it!

Abela had spoken of “services rendered” by Vitals/Steward from the very beginning, even during the time of the court proceedings three years ago before the annulment judgment.

Did he know that one day in the future this issue of services would help him try to put an end to this burning issue?

How can the spokespersons of the government believe that they can continue to twist the facts and get away with it?

John Vassallo is a former Ambassador to the EU.