Issue link: https://maltatoday.uberflip.com/i/741600
maltatoday, SUNDAY, 23 OCTOBER 2016 10 News MATTHEW AGIUS A court has upheld a request to suspend the judicial sale by auc- tion of the Mistra Village Holiday Complex, after it was shown evi- dence of bad faith in the assigning of the debt. Developers JPM Brothers Ltd are a minority shareholders (42%) in Gemxija Crown Ltd, an entity Montebello formed together with Kuwaiti company Al Massaleh Re- al Estate Co (AML) to develop land in the Mistra area. The land was bought in 2005, with €42 million of finance provid- ed by Bawag Bank. That loan fell due in 2010 and Gemxija Crown, together with its guarantors were served with a judicial letter de- manding payment. JPM is a guar- antor of €21 million of that debt, AML the other €21 million. But the €42.2 million credit and associated rights were later as- signed by Bawag to BVI-registered GCC Financial Instruments Lim- ited for €29 million. In 2013, another judicial letter was sent to Gemxija Crown, JPM Brothers Ltd and AML, informing them that Bawag Bank's credit had been assigned to GCC. In September 2015, Mistra De- velopments plc (a company formed by AML to develop the land at Mistra) informed Gemxija's other owners that it was not going to be able to pay the price agreed in the promise of sale. JPM argued that GCC had been incorporated by AML with the singular aim of taking over Bawag Bank's credit. It was suggested that GCC's purchase of Bawag's credit had been made in bad faith and in breach of AML's obligations towards Gemxija, namely that of putting the collective interests of the partners first. GCC submitted that JPM had known about the 2013 contract of assignment of credit between Bawag and GCC for several years and had taken several measures to prevent the judicial sale. JPM succeeded in preventing the auction at the last minute on four occasions, actions perceived by GCC to be "nothing but another attempt by JPM to stultify the ex- ecution of an executive title for the recovery of a debt." JPM are guarantors of €21 mil- lion of Gemxija's debts, whose property is valued at anything be- tween €50-€75 million. The Mistra Village Holiday Com- plex, owned by Gemxija Crown, is worth €5.6 million. JPM alleged that AML had acted in bad faith towards it and this merited that it be released from its guarantee, be- cause it had acquired the debt from Bawag by virtue of assignment and not through subrogation. The court was told that part of the consideration paid to Bawag Bank in return for the assignment of its credit to GCC, was paid by money held by Al Massaleh in a pledged bank account – so in ef- fect Al Massaleh paid part of the price. JPM told the court that AML and a Dutch company Marem BV were equal shareholders in Gemxija – Marem BV being a subsidiary of AML and the com- pany holding AML's shares in Gemxija. The court also noted that AML's legal consultants had been present during a relevant Gemxija board meeting, saying that this indicated a link between Marem BV and AML. The court said it was of the opin- ion that the plaintiff company had tendered evidence pointing to bad faith in the actions of the other companies when Gemxija Crown's debt was acquired, and the defendants had not produced any evidence to the contrary. These were "a legitimate impedi- ment to the continuation of the judicial sale by auction in ques- tion." Ms Justice Jacqueline Padovani Grima ordered that the judicial sale be suspended until a related case, filed earlier this year by JPM Brothers Ltd against Gemxija Crown Ltd, is decided to avoid the risk of serious prejudice being suffered by the guarantors as well as because the creditor could eas- ily have obtained payment from Gemxija Crown, whose property, the court noted, was worth over ten times more than the credit it secured. JAMES DEBONO A €307,810 direct order was award- ed to the UK consultants Mott MacDonald and Broadway Maylan for the preparation and finalisation of a new local plan for Paceville, the Planning Authority told MaltaTo- day. The direct order was preceded by a call for expressions of interest. The two global UK-based consul- tancies have drafted a master plan for Paceville which also "incorpo- rated" proposals made by landown- ers and business groups to the gov- ernment on nine sites earmarked for high-rise development, includ- ing a land reclamation proposal from the Tumas Group. The Paceville master plan also proposes transport solutions, pub- lic pathways and open spaces in the area and integrates 18 high-rise towers in the landscape. While Mott MacDonald's mis- sion statement affirms its commit- ment to "respect the environment and the communities in which it works", the PA has so far been criti- cised by the St Julian's local council for failing to consult Paceville and St Julian's residents when the mas- ter plan was being drafted – indeed Mott MacDonald barely mentions the community living in Paceville. The PA has insisted that resi- dents will have the opportunity to present their proposals during the public consultation stage, which has been extended by another three weeks, and during the Strategic En- vironment Assessment of the plan, which also includes public consul- tation. Asked whether the consultants are contractually bound not to pro- vide advice to any of the developers in the area covered by the master plan, the PA spokesperson replied that "confidentiality and ethical conduct of the parties is regulated by a consultancy agreement signed with Mott MacDonald". Mott MacDonald has a long his- tory of advising public authorities in Malta, having carried out the studies on wind energy generation in Malta and proposing the Sikka l-Bajda site for the development of an offshore wind farm which was shelved by the present administra- tion. In 2011 it was appointed to carry out a preliminary analysis of road tunnel link options between Malta and Gozo, which concluded that a detailed geological and geotechni- cal investigation was required to determine the optimum tunnel alignment. Mott MacDonald was also part of a consortium that was awarded the rights to develop White Rocks into a sports village by the previous administration. However the pro- ject did not materialise with former Prime Minister Lawrence Gonzi re- tracting from the project by saying that his government "was not pre- pared to go ahead with the agree- ment at all costs". Mott MacDonald boasts of being the first consultancy firm to achieve certification to the new anti-brib- ery management system standard, BS10500. In 2008 it was accused of having paid commissions to former senior officials of an $8bn (£5.1bn) hydroelectric project in the south- ern African state of Lesotho over a period of six years in the 1990s. But the UK's Serious Fraud Office concluded that it could not proceed with a formal investigation into Mott MacDonald, as there was "no realistic prospect of a conviction". Mott MacDonald denied the charges insisting that it has never been accused of corruption by any authority in Lesotho. Architectcs Broadway Maylan's portfolio includes the grandiose 9,000 seat National Gymnastic Arena in Baku, Azerbaijan, a Car- refour shopping centre in Majorca, a headquarters for the Church of Scientology in Birmingham and a $100m cruise terminal in Miami. Mistra land auction suspended again after Montebellos claim Kuwaitis showed bad faith Paceville consultants paid €307,000 direct order JPM are guarantors of €21 million of Gemxija's debts, whose property is valued at anything between €50-€75 million. The Mistra Village Holiday Complex, owned by Gemxija Crown, is worth €5.6 million Paceville vision: Mott MacDonald's €307,000 direct order was preceded by a call for expressions of interest