The government has withdrawn its claim against the Swedish company Skanska over defective concrete allegedly used in the construction of Mater Dei Hospital after a tribunal found it had no legal standing to arbitrate.

The United Nations Commission on International Trade Law ruled that since Malta had signed a waiver, freeing the Swedish construction company from any future liability over the hospital, the government could not proceed with its compensation claim over the hospital’s structure. The request was made after it was discovered that the concrete used was inferior to required standards.

The concrete was inferior to required standards

In February 2009, the Foundation for Medical Services had signed a “project closure” agreement with Skanska, through which the two agreed to a settlement of €7 million, down from the €30 million Skanska was expecting.

But this agreement included a waiver that the “parties will not be liable whatsoever for all and any further past, present or future concerns, claims or disputes that the parties might have…”. This exonerated Skanska from any liability for the faulty concrete used at Mater Dei. The tribunal ruled the government had waived its right to arbitrate.

A spokeswoman for the Health Ministry confirmed yesterday the government had lost its case but insisted that discussions between the two legal teams were continuing.