Updated 6.15pm with State Advocate statement

The State Advocate has the power to act independently of any government direction to recover funds swindled in the fraudulent hospitals concession, the court of appeal in its superior jurisdiction declared on Monday.

The Chief Justice quashed a previous decision handed down by the First Hall, Civil Court.

The appeal was instituted by the Nationalist Party, which insists that State Advocate Chris Soler should and could take court action, independently of the government, to recover €400 million handed by the government to Vitals and later Steward Healthcare in connection with the hospitals concession which was later declared fraudulent by the courts.  

In a statement issued following the ruling, the State Advocate said the appeals court had concluded that his office is "empowered, but not duty bound" to do that. 

The State Advocate said his office was following the government's instructions and making legal submissions as part of ongoing, confidential arbitration proceedings in the International Chamber of Commerce. 

Monday's judgement "is aligned with the instructions given to the State Advocate by [the] Government," the State Advocate's office said. 

What Grech and Delia wanted

Opposition leader Bernard Grech and PN MP Adrian Delia had requested the court to declare that as the “last man standing” and the “guardian of the state” the State Advocate was to take legal action to recoup the €400 million allegedly defrauded through the hospitals privatisation deal. 

But in July, the First Hall of the Civil Court, presided over by Mr Justice Toni Abela, dismissed the Opposition’s arguments. It found there was no law empowering or binding the State Advocate to take legal action to recover funds lost in the deal. Were the state advocate to act independently to recover the defrauded funds, it would undermine democracy. 

The judge declared that although the State Advocate was independent and autonomous, he did not appear to have carte blanche to act upon his initiative. 

Soler had argued that moreover, it was in the public interest for him not to abuse his position by assuming powers not granted to him. 

On Monday, however, Chief Justice Mark Chetcuti and Justices Giannino Caruana Demajo and Anthony Ellul said that the State Advocate had the power to act against those who had the duty to restitute the funds. 

Contrary to what the first court had stated, the court of appeal declared that the State Advocate had that power in terms of article 33 of the Government Lands Act. 

The court confirmed the first judgment in so far as it had turned down the request to declare that the State Advocate had a duty to act, since the State Advocate “must not be subject to the direction or control of any other person or authority.” 

Nor did the State Advocate need such authorisation under the judgment which had annulled the hospitals deal and that judgment had given no such authorisation.

Lawyers Edward Debono and Nicholas Debono assisted the appellants. 

A victory for Malta - Bernard Grech

Bernard Grech speaking outside the law courts on Monday.

Opposition leader Bernard Grech welcomed the judgement, saying this was a victory for Malta and its people.

He said that while Prime Minister Robert Abela was doing everything not to recover the money, the appeals court had declared that the State Advocate could act independently to recover the funds.

"The State Advocate should now independently take action for us to get our money back," Grech said. "If he doesn't, the PN will hold him personally responsible for betraying the people. 

Most of the PN's pleas were rejected - Government

The government in its reaction to the court's decision said most of the PN's pleas had been rejected by the court, and it would have been better for the Opposition leader to analyse the decision before issuing populist remarks.

Importantly, the court had appeal for wisdom, which, the government said, should be interpreted as being a message not to hinder international arbitration proceedings currently underway. 

The appeals court, it said, had rejected a request to direct the State Advocate to institute court action (to recover the €400m). The appeals court also refused to  declare that the State Advocate had a duty to act beyond what he had done so far. The court had only declared that the State Advocate could act within the limits of article 33 of the Government Lands Act.  

The appeals court also dismissed the PN claim that the state advocate had a right to act independently of the government unless there was a specific law in place. 

The government also noted that the appeals court had dismissed a false declaration by Bernard Grech said the prime minister was guilty of deception and collusion with Steward Healthcare. 

The government pointed out that it had, through the State Advocate, initiated international arbitration proceedings months ago to defend Malta's interests. 

It said the Opposition leader had cried victory without proper analysis of the court's decision.

Grech urges people to join protest

During an interview on NETFM, Grech urged the public to join the Nationalist Party’s protest on Monday evening to celebrate "the people’s victory for a historic moment".

Grech said people could also join the protest to demand the resignation of Gozo Minister Clint Camilleri.

Camilleri - together with former minister Clayton Bartolo - has been under pressure to resign since a Standards Commissioner report found they abused their position by granting consultancy jobs to Bartolo's partner.

While Bartolo resigned, Camilleri retained his position.

“The PN has always been on the people’s side and we will continue to do so,” Grech said, adding that in the meantime, Prime Minister Robert Abela continued to defend fraudulent individuals who benefitted from the public's money.

“Today, Abela lost, and the people won.”