What prompted me to write this is Dr Mark Said’s article ‘The unfinished business at the Law Courts’ (TMIS April 14). Not being a lawyer, it does not fall within my competence to add to his suggestions for streamlining the running of our law court so as to reduce court delays in justice being done. Nonetheless, based on my own experience resulting mainly from my involvement in the National Bank of Malta saga, I venture to record some aspects of that case which, in my view, contributed to the abnormal delay in judgment being finally delivered on 26 March on the pecuniary damages awarded to NBM shareholders.

I refer in particular to what I consider to be very valid statements made by Dr. Said in stating ‘… there are also a number of reasons why lawsuits have become longer. Although Maltese rules of procedures impose limits on the production of evidence, they are still too broad, allowing parties to canvass issues that are not relevant and material to the issues in the litigation. This results in longer and more expensive proof and a larger volume of evidence being placed before the trier of fact at the trial. The expanded use of expert witnesses has also lengthened trials. Efforts are reform are underway but are hardly making any headway’.

I cannot but fully agree with Dr. Said’s comments. In view of my position at the time in the top echelons of Barclays Bank Malta, I was close to the events that had led to the run on the NBM in the last quarter of 1973 and was even involved (with my boss Louis E. Galea) in the various attempts to find ways and means of staving off the run, thus forestalling the then government’s evident keenness to take over the NBM. That is history and, as I have already gone to print on that aspect, I will not digress from the subject matter of this article.

Way back in 2003 I started commenting in the print media on the events of late 1973; the appointment by government of a Council of Administration on 7 December 1973 and the subsequent transfer of all the NMB’s assets and liabilities to the Bank of Valletta as from 22 March 1974. I was prompted by the fact that a large number of NBM shareholders had instituted legal proceedings against government in 1992 by way of two separate court cases. It is said that it took the shareholders concerned as many as 18 years to commence legal proceedings because of a fear of reprisals by government and other factors. Still, 32 years to reach the present stage (now subject to even more appeals) is a long time.

I now comment how the court proceedings developed from 1992 onwards. The courts first dealt with various preliminary pleas that took some years to be thrashed out between the parties concerned. Real progress was reached in a judgement on 9 January 2014 (22 years later) when the court of first instance decreed that the fundamental human rights of the shareholders had indeed been breached in terms of Art. 37 of Malta’s Constitution. In the process of reaching that conclusion, the courts gave both parties time to bring forward a number of witnesses and expert opinions. Admittedly, it was important for vital facts and figures to be produced by both parties but one is led to question why such a long time-lapse was tolerated by the court.

Government appealed but the Constitutional Court of Appeal did not take long to confirm, only nine months later, that the NBM shares certainly had value despite the temporary liquidity problems and accordingly the shareholders were entitled to compensation. This put paid to government’s, and its advisers, contention that the bank had a negative asset value as at 31.12.73 (the latest audited accounts at the time the Bank was taken over).

The attention of plaintiffs then centred on the amount of compensation and I was roped in by those shareholders who owned the largest shareholdings to assist in formulating proposals to the court for determining what was deemed to be a fair level of compensation. After delving deeply into documentation which I considered to be important to prove that there was indeed value in NBM’s shares as at 31.12.73, I filed in court on 20 January 2015 a six-page affidavit with 8 attachments.

The affidavit included documentation supporting various scenarios for fair compensation. The amount was based mainly on NBM’s branch network and goodwill value; the abnormal increase in bad & doubtful debt provisions made by the COA; and the fact that the Bank had substantial hidden reserves as its very valuable immovable property was still shown in its accounts at historic cost value. I also produced detailed evidence that between 1974 and 2014 government had received no less than €131 million (€170 million adjusted for inflation to January 2015) by way of dividends; disposal of shares and bonus share issues. Apart from this, at the then market price, government’s holding of BOV shares was worth €195 million. I concluded that there were good grounds for a claim for compensation of €325 million.

This evidently threw government into a panic. The first reaction was to get the then Attorney General, Dr Peter Grech, to counter-examine and to question me, over three separate court sessions held between November 2015 to February 2016, on various aspects of my report. These only served to reveal the AG’s lack of knowledge of the technical aspects involved. This led government to seek the help of three foreign experts brought over to Malta from the USA. They presented their report in court in April 2016 followed by three court sessions over the ensuing months. Here one questions the need to engage three USA-based experts, involving high travel and other costs, when, surely, there was enough expertise in banking and financials matters locally amongst us Maltese. Moreover, this process delayed court proceedings by a couple of years.

Yet this was not the end of experts being involved in this saga. This because, confronted by heavily contrasting opinions by experts brought in by both sides, the presiding judge decided to seek the concurrence of both plaintiffs and defendants for the court itself to appoint a panel of two experts, together with a former judge to guide them on any legal aspects, so as to give their views on the conflicting submissions. It took time for the parties to agree on the names of two experts who were finally appointed by the court together with retired Judge G Valenzia. Their reports were submitted to court in November 2022. The expert who took government’s side maintained the view that NBM had a negative value in 1973 despite the fact that the Constitutional Court of appeal had decreed way back in 2014 this was not the case and that the point to be determined was the amount of compensation payable to NBM’s shareholders as plaintiffs. Yet, more waste of time.

The scene was thus set for judgment on the compensation as determined by the court. After various postponements of the judgment date, this was delivered on 26 March 2024. The court awarded NBM shareholders damages totaling €198.5 million (reduced to €111.2 million for reasons given in the judgment). However, this is not the end of the story as both parties lodged appeals on 15 April with government’s lawyers repeating the contention of negative share value, again side-stepping the Constitutional Court’s decision. Time will tell when the two court cases are finally brought to a close and damages paid out by government.

Hopefully, the Minister for Justice will consider using this saga as a case study when contemplating revisions to the law to render lawsuits shorter as proposed by Dr Said.