ICC dismisses compensation claims in Steward-Malta hospitals case

Updated 6.25pm with Labour comment

Malta and Steward Health Care do not owe each other compensation for the government's decision to terminate a hospitals concession, an international tribunal has ruled. 

The International Chamber of Commerce rejected Steward’s claim that the Government of Malta had unlawfully terminated the concession and owed it contractual damages. 

Steward was seeking €148 million in compensation. 

The ICC, however, also dismissed the Maltese government's bid to be compensated by the US healthcare company. The government had said it was seeking an undisclosed amount of compensation from the company, with then-Health Minister Chris Fearne telling parliament "we're going after whatever we believe is ours by right. And we will chase it till the very last cent."

The ICC decision was communicated by the government in a statement issued through the Department of Information on Monday. 

The government said the ICC had concluded that Malta received "fair value for services delivered by Steward and payments made by the Government of Malta under the concession."

"No damages have been awarded to either party." 

The ICC concluded that Malta received €889,434,091 in benefits from the deal while Steward Healthcare received €884,644,629.

It therefore concluded that Steward was owed the shortfall of €4.78 million.

Proceedings before the ICC were triggered by Steward after the government cancelled a multi-year deal for it to run three state hospitals. The cancellation decision came after a court of appeal declared the deal to have been fraudulent.  

Proceedings were held in secret, with little known about the case. Steward was believed to be seeking compensation on the basis of a clause inserted into the concession which promised it a €100 million payout if the deal was terminated for any reason.

The government has never said what compensation it was seeking from the company in the case. 

In its statement on Monday, it said more information would be made public  once the government’s legal team completes its assessment of the tribunal’s detailed findings.

PN: Government failed to recover a single euro

The Nationalist Party said the tribunal had "confirmed that the contract with Steward Healthcare should have been terminated".

"The fact that the Prime Minister and the Minister for Finance failed to recover even a cent shows they have failed", it said. People had first been robbed by the deal, and now they have received no remedy.

"The Maltese people have the right to get their money back – not just empty hospitals with no investment," the PN said, adding that the Labour government had done everything it could to "cover up for Steward" and lacked the courage to pursue a strong case against the company. 

"The Vitals and Steward case was the biggest corruption scandal in Malta’s history, and today we have yet another confirmation from an international tribunal that the Maltese people were right. Meanwhile, we still have no new general hospital in Gozo, St Luke’s remains abandoned, and Karin Grech Hospital has yet to be restored," it said. 

Labour: PN's €400m myth has vanished

The Labour government said the tribunal decision proved that the €400 million "myth that the Nationalist Party has been blowing out of proportion for a long time has vanished. 

The €400 million figure was highlighted by the Opposition as the amount allegedly stolen by Steward from Maltese taxpayers. It was derived from National Audit Office reports into amounts transacted for the concession.  

Joseph Muscat: ICC has thrown out lies about me 

Former Prime Minister Joseph Muscat was among the first to react. 

The ICC decision, he said, was confirmation that the hospitals concession was not fraudulent. 

"If there had been fraud, the International Tribunal would not have decided that the service provider was still owed money," he said. 

"Not only were €400 million not stolen in the hospital concession, but the Government still has to pay the service provider almost another €5 million," he said. 

Muscat is among several people facing criminal charges for their role in the Steward deal. He denies all charges.

"This decision should shame those who caused so much harm to our country, including those institutions that were gullible enough to swallow this narrative without the slightest evidence and without seeking expert advice, relying only on shouting and commotion in the most amateurish way," Muscat said. 

Daphne Foundation: A positive outcome for Malta

The Daphne Caruana Galizia Foundation described the decision as a "positive outcome for Malta" and revealed that it had played a part in the case by submitting a brief to the ICC in March.

"Our submission provided the Tribunal with information we obtained through our continuation of Daphne Caruana Galizia’s original investigations into the fraudulent public hospitals concession at the centre of the proceedings—an issue Daphne first exposed, and on which she continued to report, on her blog, Running Commentary.

"Through our intervention, we sought to assist the Tribunal in ensuring that the Maltese public interest, and the significant public resources placed at risk through the fraudulent hospitals deal, are protected in the course of the ICC proceedings," the foundation said.