A judgment awarding Keith Schembri and directors of his various companies damages over a breach of fundamental property rights caused by a court order to freeze all assets has been confirmed by the Constitutional Court.
Judgment was delivered on Wednesday morning by the highest court following an appeal filed by the Attorney General, the State Advocate and the Police Commissioner against the decision of the First Hall, Civil Court delivered in April.
Schembri was arrested on September 21 evening and his home searched before he was escorted to police headquarters, while his properties and those of 22 persons linked to his businesses were hit by an attachment order issued by the Criminal Court upon a request by the Attorney General.
Six months later, upon expiry of that order, the former OPM chief of staff, his father Alfio Schembri, Malcolm Scerri and other business associates were charged with money laundering and their assets hit by a freezing order in terms of law.
Meanwhile Schembri and the other affected persons filed constitutional proceedings claiming that the investigation and attachment order breached their fundamental right to the peaceful enjoyment of property.
Their arguments were partly upheld by the First Hall, Civil Court presided over by Mr Justice Lawrence Mintoff, declaring that the relative provision under the Money Laundering Act did not envisage an ordinary remedy for persons targeted by such order.
That position was confirmed by the Constitutional Court presided by Chief Justice Mark Chetcuti and Justices Giannino Caruana Demajo and Anthony Ellul, who also ordered copy of the judgment to be sent to the Speaker in Parliament.
The Attorney General and other appellants argued that the court order had not been carelessly issued but on the strength of clear and damning evidence that called for such measure.
Moreover, it was an altogether legitimate, justified and proportionate measure, temporary in effect and in the public interest since it was intended to ensure that necessary information remained “intact” especially in a small country such as Malta.
But the Constitutional Court observed that the fact that Schembri and other persons were charged six months after that attachment order, did not alter the reasoning of the first court.
And although that attachment order was no longer in force, it had remained so for six months until it was replaced by a freezing order upon arraignment.
Although six months might not seem so long, under certain circumstances involving business interests and going concerns, even a short term might prove detrimental to the person who is unable to seek some form of remedy to alleviate the burden placed by such an order.
The Criminal Court decreed that it could not vary such attachment order which fell under the competence of the AG.
In fact, it was only 17 days after the issue of such order that the AG had informed that court that it was limitedly revoking the order to allow for payment of employees’ wages.
Subsequently the value of the order was reduced and an administrator appointed, but only after initial objection by the AG.
Since then, in March 2021 the legislator introduced the Proceeds of Crime Act whereby if a subject targeted by an attachment order is a business concern, it is allowed to continue with its operations.
Yet that law was introduced afterwards and was not applicable to this case, said the court, turning down the appeal and confirming the judgment.
The first court had awarded each of the applicants €300 by way of moral damages for the breach, payable jointly by the Attorney General, the State Advocate and the Police Commissioner.
Lawyers Edward Gatt and Mark Vassallo assisted the applicants.