The majority shareholders in the company that formerly owned the Grand Hotel Excelsior, in Floriana, have filed an action claiming damages from companies forming part of the Bical group, its controller, and the government.

The claim was filed by Italian nationals Michele Martone and his brother Massimiliano against the controller of Bical Ltd and 27 companies forming part of the Bical group.

The brothers also filed their claim against the controller and the liquidator of Malta and Europe Hotels Limited and against the Attorney General on behalf of the government.

The Martones claimed they were majority shareholders in Malta and Europe Hotels Ltd which had previously owned the Grand Hotel Excelsior. This company owed money to some of the companies formerly controlled by Cecil and Henry Pace.

The said companies were placed under the control of the Central Bank when Bical suspended payments in 1971.

Although Malta and Europe Hotels Ltd did not belong to the Pace brothers, it too was placed under the control of the same controller appointed to manage the Paces' companies.

The Martones added that Malta and Europe Hotels Ltd was also owed money by some of the companies formerly run by the Pace brothers.

In 1989, the Martones had obtained a warrant of prohibitory injunction in terms of which the sale of the Grand Hotel Excelsior could not take place.

According to them, the Pace brothers had earned large sums of money from the operation of this hotel and that if it were sold, their rights to payment of the money owed to them would be damaged. In 1990, the controller and the Martones had submitted the matter of the amounts due to arbitration and, in 1991, the Martones had withdrawn their opposition to the sale of the hotel under certain terms and conditions.

The parties had agreed that the controller would speed up the arbitration proceedings, and that eventually the Martones would receive the amount due to them pro rata to the proportion of shares they held.

The controller was also to keep the proceeds from the sale of the hotel that were due to the Martones in an account bearing the highest rate of interest.

The Finance Minister of the time, George Bonello DuPuis, had guaranteed the obligations of the controller on behalf of the government, and had pledged that the government would allow the proceeds of the sale to be transferred abroad.

However, in their action, the Martone brothers claimed that the opposing parties in this case had violated the terms of the 1991 agreement, and that, as a result, they had suffered damages.

The controller had, in 1998, concluded that the companies forming the Bical group owed Malta and Europe Hotels Ltd Lm1,376,497, but the Martone brothers claimed that this was far less that what was actually owed to the company and eventually to them as company shareholders.

The court was asked to order the opposing parties to honour their obligations and to order them to pay damages.

The court was also asked to order the controller to account for his administration and control of Malta and Europe Hotels Ltd.

Lawyers Mario de Marco and Edward Saliba acted for the Martone brothers.