Issue link: https://maltatoday.uberflip.com/i/1503368
10 NEWS maltatoday | SUNDAY • 9 JULY 2023 THE American lawyer representing Eliz- abeth McCaul, the MFSA-appointed con- troller for the now-shuttered Pilatus Bank, has highlighted a US court ruling that deci- sions by the ICSID tribunal do not possess governmental authority. This emerges from court documents filed in January by McCaul's counsel, Attorney Michael C. Keats, in which he asked the U.S. District Court of the Eastern District of New York to quash a request by Alpene Ltd, which is in turn, owned by Ali Sadr Hasheminejad, Pilatus' chairman. Alpene had applied to the court, asking to be allowed to question McCaul, who had assisted in the bank's controllership when it was shut down by the European Central Bank in February 2018. Alpene's owner Ali Sadr Hasheminejad claims that controller Lawrence Connell, who was appointed by the MFSA to take over the bank after Hasheminejad's arrest in the United States, had a conflict of inter- est, by engaging a law firm founded by in- coming MFSA chairman Prof. John Mamo to represent him. Alpene has accused Connell of having "drained the bank of its assets and funnel substantial portions of those assets into Mamo TCV." Alpene's lawyers had insisted that they needed to question McCaul for its arbitra- tion case against Malta in the World Bank's International Centre for the Settlement of Investor Disputes (ICSID), about a bilateral investment treaty between the People's Re- public of China and Malta. Alpene argued that ICSID tribunals are "clothed in governmental authority" being run by States to act as a "permanent, State- backed institution for the resolution of in- vestor-State disputes", and that its decisions could not be ignored by a member state's domestic courts. In August 2021, Alpene had filed an ap- plication to the U.S. District Court East- ern District of New York, requesting an expedited order that would authorise it to subpoena documents and testimony from McCaul in aid of the proceedings before ICSID. On September 9, 2021, the court referred the application to Magistrate Judge Robert M. Levy, who granted the application on September 20. The following November, McCaul had filed a motion to overturn the granting of Alpene's application, and hav- ing analysed a recent decision by the US Supreme Court, Magistrate Judge Levy had upheld McCaul's motion on October 27, 2022. In January 2023, while that court was deal- ing with Alpene's objection to the October 27 order, McCaul's lawyer wrote to the court, to inform it that a month before, on 19 December 2022, U.S. District Judge Lew- is A. Kaplan of the Southern District of New York had issued a Memorandum Opinion stating that an ICSID tribunal "does not qualify as a 'foreign or international tribu- nal,' imbued with 'governmental authori- ty,'" within the meaning of the same section of the law being cited by Alpene, in a similar case between Panama and Italy, . In that decision, Judge Kaplan had con- cluded that that "Italy and Panama did not intend to imbue the ICSID Panel with gov- ernmental authority, and therefore [the IC- SID Panel] does not constitute a 'foreign or international tribunal,' upholding the mo- tion to vacate and quashing the subpoena in question, closing the case. McCaul's lawyer asked the court to do the same in the case filed by Alpene. US court ruling may have bearing in Malta The decision may have a bearing on Con- stitutional proceedings filed in Malta by Repubblika who are alleging that Attorney General Victoria Buttigieg had issued a no- lle prosequi – an order not to prosecute – in respect of Ali Sadr Hasheminejad, Pilatus Bank's operations supervisor Luis Rivera, the bank's director Ghambari Hamidreza and bank official Mehmet Tasli. When ordered to testify about the order, Buttigieg and FCID police inspector Paul- ine D'Amato both said they were unable to comply with the order, citing amongst oth- er things, the confidentiality of the pending ICSID proceedings. The court had rejected that argument, but allowed the two witnesses to testify behind closed doors in view of the "privileged" na- ture of the ICSID arbitration proceedings. JAMES DEBONO AN additional 59 apartments are being proposed at the Lay Lay complex in Marsaskala by in- creasing the building height from the current four floors to eight. The stand-alone 2,600sq.m complex is composed of a series of blocks and is in a densely pop- ulated area of Marsaskala. It is surrounded by Triq in-Na- dur, Triq l-Orangjo,Triq l-Ghas- sies and Triq Vittorio Cassar. The application has been pre- sented by developer Michael Axi- sa, the owner of Lay-Lay Compa- ny Limited. The local plan sets a height lim- itation of four floors plus semi basement in this area which translates into a building height of 22m according to Annex 2 of the Development Control Policy approved in 2015. But the application of this build- ing height is not automatic as the PA must take into consideration the predominant height of build- ings in the area, according to the same policy. The current building was orig- inally approved in the 1980s as a summer residence complex. A permit was issued in 1999, allowing for the conversion of the 84 semi-finished, two-bed- roomed apartments into 40 three-bedroomed ones. A re- quest to add an extra floor was turned down in 2002. An under- ground supermarket on the same site was also approved in Septem- ber 2013. This permit was last re- newed in 2019. Marsaskala is one of the locali- ties where developers are also al- lowed to apply the floor area ratio on any site surrounded by four streets. This mechanism oblig- es developers who go above the height limitation to create a public open space around their projects. In most other localities in Malta this is only allowed on sites great- er then 4,000sq.m. But in this case no such obli- gation exists as the eight-storey development will still respect the height limitation foreseen in the local plan, as re-interpreted in the 2015 policy annex. Court filings show that in December 2022, a US court held that rulings by an international tribunal dealing with investment disputes did not possess government authority. This matters for the Pilatus Bank case underway in Malta. MATTHEW AGIUS reports. US court ruled secretive ICSID tribunal not 'imbued with governmental authority' Lay Lay complex in Marsaskala could rise to eight floors The ICSID tribunal