Issue link: https://maltatoday.uberflip.com/i/244624
17 Opinion maltatoday, SUNDAY, 19 JANUARY 2014 Jeremy Cassar Torregiani What is good for the goose is good for the gander T he judgement given by Mr Justice RJ Micallef has finally established for a fact that in taking over the National Bank of Malta and passing over its business assets and liabilities to the now Bank of Valletta through ACT XLV 1973 and its subsequent LN 27 of 1974 violated the human rights of the shareholders and in so doing expropriated their property without compensation. So, now at long last – 40 years after the act took place – we have a judgement. Yet while it settles the more important question by establishing expropriation of private property without compensation, it opens the question as to what would be just compensation. Without sounding simplistic, we need to understand that the overriding principle of compensation for expropriation is to reinstate the position of the person that has suffered a loss so as to bring him/her back to the position he/she was in if the loss never took place. More simplistically, it means that should I suffer the loss of a goose I should be compensated with a similar goose. The principle applies across the board, so that if the expropriation relates the loss of a car, a house or a business, then the person or persons who suffered the loss should be reinstated such that his position would be the same as if the loss never took place. For those of you that know the details of the case it is perhaps ironic that Dom Mintoff – the same person who was instrumental in the abuse of power in the expropriation of the National Bank of Malta shareholders – also carves out a way forward by the application of the law on this very issue in a similar case that involved an indirect expropriation of his In the simplest terms possible: if I suffer the loss of a goose, I should be rewarded with another goose own property. The story goes like this: Mintoff's house was at the centre of controversy when it acquired an unwanted neighbour in 1987: the Delimara power station. The power station lies just across the road from L-Għarix, fuelling speculation that the site was deliberately chosen by the Nationalist government of the day to spite its political rival. Mr Mintoff had objected to the plans, and had even submitted proposals for a number of alternative locations and suggestions on how the power station could be built to minimise the impact on his property. But these proved to be futile. While L-Għarix continued to serve as Mr Mintoff's primary residence while the power station was being built, he ended up moving to his other home in Tarxien soon after it started operating in 1992, citing the resulting noise and pollution as the reason. In any case, the decision led Mr Mintoff and his wife Moyra to open a constitutional case in 1994, in which they claimed that their fundamental human right to enjoy their own property had been violated by the construction of the power station. The First Hall of the Civil Court upheld their claim in 1995, although it did not decide on compensation at this stage. The government appealed the ruling, but in 1996, the Constitutional Court ruled that the construction of a power station a few metres away from L-Għarix was tantamount to the expropriation of the property. The court argued that the property had effectively been rendered worthless, and that it also lost any subjective value for the Mintoffs as they could no longer use it as their residence. The courts eventually decided on compensation in 2004, awarding the Mintoffs Lm360,000 (€838,574). But Mr Mintoff insisted that this compensation was not adequate, and took the case up to the European Court of Human Rights. However, the ECHR dismissed his claims, noting that the award not only covered the entire value of the property, but also exceeded it by some Lm140,000, apparently as compensation for the inconvenience caused since 1992. Mr Mintoff continued to live in his Tarxien residence, where he died, at the age of 96, on 20 August of last year. With regards to the National Bank of Malta, I am not going to go into what will be or should be awarded by the court now that the expropriation has been established as that is for the court to decide however I will say what path I think we should take once the compensation is established. If the verdict is fair insofar as it reinstates the shareholding to the same position we were in before the expropriation took place we will be wise to put the matter to rest. If, on the other hand, it does not we should appeal to the European court such that the amount of compensation is in harmony with the "thing" that was taken. If the principle applies to Mintoff and his house in Delimara when the actual property was never even taken away from him, how much more should it apply in this case, when the property in question was taken by an act of parliament and the court case was protracted over a period of 40 years? I think it would be fair to say that what is good (sauce) for the goose is good for the gander. Given the facts as explained above, I think it is only fair that government transfers its remaining shareholding in the Bank of Valletta to the former shareholders. To do so it must reinstate the company – National Bank of Malta Ltd that currently lies in suspended animation following act XLV of 1973. In so doing, it will allow the company to appoint its directors according to its statute and formalise the compensation to avoid any further claims or possible disagreement among the shareholders as to what they own or should own. Once the company board is reinstated they should meet with government to iron out the transfer of the shares owned by government in the Bank of Valletta to the National Bank of Malta Ltd so that the former shareholders in the National Bank of Malta will be able to settle their issues independently once the compensation is agreed to by its board. In this way, the Bank will continue to operate as usual such that the new shareholders who bought shares in the Bank of Valletta following the public offering in 1993 will remain untouched and the original owners of the bank will have, in part, their property returned to them and although impossible to quantify exactly, have an element of reinstatement towards their former position. On the argument that the goose has grown considerably over the past 40 years, receiving 25% of this larger bank would perhaps be seen as "equal" to the 100% of the smaller bank had the expropriation never took place. The remaining 75% could, as far as I can reason, be left untouched and traded against a dignified apology by government to the abused shareholders in the National Bank of Malta. Although not quite the same as having the whole bank returned, this alternative is in my view the best way forward and will show retribution for the foul act committed by government as it would be government itself that would be divesting itself of the same property, it will give the shareholders part ownership of the Bank of Valletta that was created at their expense, thereby reinstating them also, and it would allow the impoverished many the opportunity to liquidate their shareholding at market prices. Moreover, it will be clean and seamless, and send the right message about our financial services to the international community. It will also generate money in the economy, lift the serious concerns that the Bank of Valletta shareholders and directors currently face over this issue and send the right message to the international financial community that we are a progressive state where shareholder rights are safeguarded and protected and open for business in the financial services sector. If not, we run the risk of this problem swelling out of proportion to the detriment of not only the shareholders of the National Bank of Malta – who have already waited for 40 years for justice to be served – but to those in the Bank of Valletta who are concerned about a possible court ruling against them as well as to each and every one of us that operate a company in Malta.