A judge yesterday ordered the editor of l-orizzont, Frans Ghirxi, to pay the former chairman of Posta Limited, which once managed the postal services, Lm500 libel damages.

The company's former chairman, Austin Sammut, had filed a case in the First Hall of the Civil Court claiming that two articles that appeared on l-orizzont were libellous in nature.

The articles were entitled "Zball" minn Posta Limited sewa Lm1 miljun telf fl-1996 (A "mistake" made by Posta Limited cost Lm1 million in losses in 1996) and Kuntratt stramb ta' Posta Limited iwassal ghal telf kbir (A strange contract by Posta Limited leads to a big loss) published on the daily's January 1 and 2, 1997, issues respectively.

Mr Justice Giannino Caruana Demajo heard that when Posta Ltd took over the postal services, previously operated by the government, Dr Sammut was appointed chairman.

Before Posta Ltd was set up there was an agreement about bulk mailing between the Postal Department and Euromail Limited through which Euromail Ltd paid low rates on bulk mail delivered from Malta to foreign countries, especially Germany. Once Posta Ltd was set up this agreement was made formal through a contract.

During a Universal Postal Union meeting held in Korea in August 1994 it was agreed that countries that received bulk mail could increase their tariffs, known as terminal dues.

In a letter sent in October 1995 Posta Ltd was informed that Germany was going to increase its tariffs, which meant that the company would have to pay more for the bulk mail it sent to Germany as from January 1996.

However, in November 1995 Posta Ltd signed a contract with Euromail Ltd over the bulk mail rates. But the rates which Euromail Ltd was going to pay Posta Ltd did not cover the rates Posta Ltd had to pay in terminal dues over the same bulk mail to Germany. Moreover, the rates were less than that which Euromail Ltd paid in previous years.

As a result Posta Ltd had to make good for the difference between the rate paid by Euromail Ltd and the terminal dues owed to Germany. This led to the loss of some Lm1 million.

Evidence showed that the contract between Posta Ltd and Euromail Ltd was an initiative of the management at Posta Ltd and the board of directors and the chairman were not aware of the contract details.

It was also established that Euromail Ltd was a phantom company that made a profit out of Posta Ltd's loss.

The judge ruled that although the author of the article had the right to criticise the company's decision, the article had defined Dr Sammut as being "primarily responsible" for what it labelled a mistake, when in reality Dr Sammut was not involved in the decision. Moreover, by putting the word mistake in inverted commas the article suggested it was not really a mistake but an underhand plan to ensure that Euromail Ltd made a profit.

For this reason the judge ruled that the article was libellous and ordered the editor to pay Dr Sammut Lm500 damages.