Bank of Valletta's claims that Italian law is blocking its right to fair treatment in a case linked to shipping giant Deiulemar have been rejected by the European Court of Human Rights.

The ECHR ruled that the bank's application is "inadmissible" at this stage because it has not exhausted all remedies in Italy.

In April 2019, Bank of Valletta filed proceedings against Italy before the ECHR, trying to ensure a "fair hearing" in the €363 million case.

It links to a claim filed by liquidators of the Deiulemar group and representatives of 13,000 Italian bondholders who lost all their life savings in a fraud scheme dating back to 2009.

The €363 million is linked to a trust opened by the owners of the collapsed shipping giant. The company went bankrupt in 2012 with losses of more than €800 million on its books. Seven people were jailed as a result of the collapse.

Liquidators for the Deiulemar group believe that BOV allowed owners to set up three trusts in 2009 - Capital, Giano and Gilda - which they illegally funneled millions into.

In 2018, an Italian court ordered the disputed €363 million to be effectively frozen, by holding the money through a precautionary warrant.

The case is being heard in the courts of the small region of Torre Annunziata in Italy but BOV had wanted to get the case moved to Naples.

BOV had said the ECHR proceedings were being instituted to safeguard “its fundamental right” in terms of the European Convention on Human Rights.

In a market announcement on Tuesday, Bank of Valletta reiterated that the curators’ claim is "entirely without any legal or factual basis, as has been unequivocally confirmed by opinions provided by independent legal experts". 

It said it will continue to pursue its defence "vigorously", including its fair hearing concerns, before the Italian courts. 

Should these prove unsuccessful, it will petition the European Court of Human Rights again, once the Italian remedies have been fully exhausted, the bank said.