A judge will provisionally hear submissions on the Pilatus Bank nolle prosequi case behind closed doors so as not to violate the confidentiality of linked proceedings before a secretive foreign court with which Malta has no treaties.

The request was made by Attorney General Victoria Buttigeg and State Advocate Chris Soler in the case filed against them over the failure to prosecute senior figures at Pilatus Bank.

The request was provisionally upheld, until the court rules on whether it is bound by a decree issued by a private foreign court.

The move comes after the Iranian owner of Pilatus Bank, Ali Sadr Hashemi Nejad, launched an international legal bid to deter law enforcement authorities.

Through a Hong Kong-based company, Alpene Ltd, which is owned by Ali Sadr, an urgent request to suspend the proceedings in Malta was filed in front of the World Bank’s International Centre for Settlement of Investment Disputes (ICSID).  ICSID has been described as “a private, global super court that empowers corporations to bend countries to their will.”

The request was made in the context of an ongoing case, which is not being heard in public, filed by Alpene against Malta, in which it is accusing Malta of unfairly targeting the bank, using it as a scapegoat for Malta’s FATF greylisting, with a view to expropriating it and claiming millions of US Dollars in damages.

Judge Christian Falzon Scerri who is tasked with hearing the case filed by Repubblika, in which the NGO is seeking confirmation that the Maltese authorities had issued an order not to prosecute senior ranking officials at Pilatus Bank, in spite of what Repubblika say is clear evidence of wrongdoing, cautiously accepted the request, in the face of stiff resistance by the NGO’s lawyer, Jason Azzopardi.

At the end of a heated exchange of submissions, the judge ruled that the sitting would temporarily continue behind closed doors, binding the lawyers and parties present during the sitting not to reveal what was said.

The argument began after lawyer Fiorella Fenech Vella, from the Office of the Attorney General, asked the judge to prevent the leaking of sensitive information from this case. Addressing this point, the judge instructed the lawyers on both sides to restrict their submissions to the issue at hand, that is, the nolle prosequi.

But this was not enough for the AG, with Fenech Vella dictating a note in which she asked for the sitting to continue behind closed doors “in view of the sensitivity of the case.”

She asked the court to also ban the publication of the testimony of the AG and any police officials, as well as any documents “in view of other ongoing proceedings before an international tribunal.”

But the prosecutor had another demand. In a reach, which one lawyer present in the courtroom was heard to describe as “worthy of North Korea”, she also asked the court to order the parties and their lawyers not to divulge any information emerging from these proceedings, with the public.

The judge asked the lawyer basic questions about the proceedings before ICSID, but Fenech Vella replied they were secret and details could not be divulged.

State Advocate Chris Soler added that those proceedings had an “absolute obligation of confidentiality.” He could, at most, ask it for an extract, he said.

At this point, Repubblika’s lawyer Jason Azzopardi stood up, denouncing the opposing counsel for their “humiliating submissions which reflect a colonial mentality.”

He pointed to the Ratification of Treaties Act, saying that “once upon a time, our parliament had passed a law stating that in order for our laws to be subject to a foreign tribunal, that law must first be approved in Parliament.” Azzopardi gave examples.

“Here there are none,” he said. “This is spin. There is no law binding this court to obey a foreign tribunal that it has no ties to.”

Fenech Vella replied, clarifying that the AG was saying that certain documents should not be exhibited because of an ongoing case, and not to bring these proceedings to a halt.

The judge pointed out that the summons indicated that the AG and Inspector were going to have to testify about documents, not to exhibit them.

But Fenech Vella refused to budge. “Instead of exhibiting a document, they will get it verbally.”

The judge then confronted the lawyer with the fact that if there is a nolle prosequi, then there are no ongoing proceedings.

Responding to Fenech Vella’s argument that the disposition of the law establishing the right to judicial review of decisions not to prosecute “doesn’t take precedence over the other, previous articles. It isn’t in the Constitution.”

But the judge explained that it had already decided that the article cited did not apply to these proceedings.

Jason Azzopardi: 'Nothing short of a muzzle'

Azzopardi begged to differ, however. “I am finding it hard to believe my eyes, this is nothing short of a muzzle. These things don’t happen in democratic countries where there is freedom of expression.”

“I intentionally summonsed the inspector to bring the police file with her... They are trying to pull a fast one,” accused Repubblika’s lawyer.

“The correspondence between Deputy Commissioner Mamo, the inspector and the Office of the AG are not privileged documents. They want to deprive the court of the possibility of investigating the issue. This is a case of judicial review, and review requires documents,” Azzopardi argued.

“The testimony and the documentation would be prejudicial to the investigation,” the State Advocate insisted.

Judge Falzon Scerri asked, with evident incredulity, whether it was being argued that a decision of nolle prosequi could impinge on secret proceedings which cannot be published.

Soler replied that there would be “consequences for Malta” coming from the plaintiff, also mentioning being found in contempt of the international court and in breach of the Republic of Malta’s statutory duties.

At this point the judge asked Azzopardi whether he objected to only hearing evidence about the confidentiality clauses behind closed doors.

“A corrupt criminal who escaped to America from a hundred-year prison sentence is attempting to condition the court’s decision… Parliament drafted the law with an intention,” Azzopardi said.

He invited the court to, before deciding, to consider the message which the court would be sending out about the scrutiny of the public office of the AG. “If transparency is absent, questions will arise.”

Azzopardi went on. “I am choosing my words carefully. I’m smelling a rat here. Let me explain. There is bad faith on the other side, and I’m not talking about the two lawyers before you here. The AG would have brought evidence before - they had seven weeks to prepare. So why now, at the eleventh hour, are they raising this? It is a red herring. I am morally convinced that they are not in good faith.”

Soler attempted to assure the court that there was no bad faith and that it was not the eleventh hour, but Azzopardi interrupted. “I invite the court to consider the implication, which is only just sinking in as I speak… the State is saying here that it wants the court to be its accomplice in muzzling civil society.”

The judge explained that as he understood it, the point of the State’s request was that if anything was said behind closed doors, the lawyers wouldn’t leak it to the public.

“So, we are going to see if Ali Sadr can tie the hands of a Maltese judge. The AG is an accomplice with a corrupt criminal, on the run from the USA, who wants to shut the court’s mouth,” shouted Azzopardi, almost irate.

“If I am bound, I will be bound by an international body,” said the judge.

Azzopardi said he would not object to the court’s suggested compromise, as he was sure of the court’s good faith.

State Advocate Chris Soler repeated that the defendants could not even bind themselves to exhibit evidence of the decision given by ICSID - which was described as a procedural order - as it required that court’s permission.

The judge therefore ruled that the proceedings would temporarily take place behind closed doors until the court issues a decision on the request, and that the lawyers and parties present during the sitting cannot reveal what was said.

Earlier

Buttigieg and FCID Police Inspector Pauline D’Amato had been ordered to testify today by the judge, after a last-minute exchange of applications and decrees in which the AG accused Repubblika of ‘hiding behind’ irrelevant sections of the Media and Defamation Act to conduct a “fishing expedition” for documents which they could not prove even existed.

Any order to reveal the contents of a criminal investigation would “breach the presumption of innocence” as protected by the Constitution and the European Convention on Human Rights, argued the AG. This argument, together with objections raised by the defendants, had been roundly rejected by the judge in a decree issued yesterday afternoon.

Repubblika, through its lawyer Jason Azzopardi, is alleging that AG Victoria Buttigieg had issued what is known as a nolle prosequi - an order not to prosecute- vis a vis Pilatus Bank owner Ali Sadr Hasheminejad, its operations supervisor Luis Rivera, the bank’s director Ghambari Hamidreza and bank official Mehmet Tasli.

On October 10, Mr Justice Christian Falzon Scerri had upheld Repubblika’s request to order police inspector Pauline D’Amato to testify and exhibit all instructions, as well as any correspondence exchanged between the FCID and the Attorney General’s Office regarding claims that Attorney General Victoria Buttigieg had issued an order not to prosecute senior Pilatus Bank officials.

The court had ordered the FCID Inspector to appear in court to give background and context behind the requests for international and European Arrest Warrants that she had filed before inquiring magistrate Ian Farrugia in February 2021. The court had also ordered her to exhibit copies of the international or European Arrest Warrants and give the court a first-hand account of the actions taken by the FCID from December 2020 to June 2022, following the conclusion of the magisterial inquiry into the bank.