Court dismisses AG’s Ali Sadr World Bank tribunal excuses as ‘not binding’

The courts have thrown out the Attorney General’s argumentation that a letter from the World Bank’s International Centre for Settlement of Investment Disputes means Repubblika’s case against the Commissioner of Police over the corps’ failure to arraign a number of key Pilatus Bank officials must be heard behind closed doors.

In a ruling on Tuesday, Madam Justice Doreen Clarke revoked an earlier decree and ruled the case could continue in public because, contrary to the Office of the Attorney General’s contention, the ICSID’s letter was “not binding” and that the tribunal had not even requested the case be heard behind closed doors in the first place.

Wholly dismissing the AG’s argument for behind-closed-doors hearings, the court ruled, “…in this letter, it seems that clarification is being made about how, and by whom, publicity should be given to the eventual decision of the tribunal in the arbitration which is being referred to.

“This letter, however, is neither a decision of the ICSID tribunal nor can it be considered as a decision that is binding on the Maltese Courts on how it should regulate the hearing.”

The judge upheld Repubblika’s contention that the AG was mistaken in the interpretation it had given the letter and upheld arguments to the contrary by the NGO’s lawyer Jason Azzopardi.

The case had been initiated in December 2020 after a magisterial inquiry concluded criminal charges should be pressed against a number of high-ranking Pilatus Bank officials.

Elaborating on the ruling today, Repubblika noted how the Attorney General had received the letter from the international tribunal in December but had “kept it hidden” until it was presented in court months later on March 16.

The Shift first reported the ICSID case on 17 September, revealing how Pilatus Bank owner Ali Sadr Hashemi Nejad had launched a counterattack on an international level in an attempt to fend off court action in Malta against himself and other bank officials.

An urgent request had been filed through Alpene Ltd, a Hong Kong-based company owned by Ali Sadr, before the ICSID, which, among other matters, asked for Malta’s proceedings against him and the other related parties, including criminal proceedings, to be suspended.

The extraordinary request forms part of a wider ongoing case taking place behind closed doors, brought by Ali Sadr-owned Alpene against Malta, where the company is claiming millions of dollars in damages.

The case was filed 13 days after Police Commissioner Angelo Gafa announced in early August 2020 that the force was close to “solving a big case … which people thought we were doing nothing about”.

On 20 August 2020, Alpene sent a letter through US law firm Steptoe & Johnson notifying Malta of the existence of a ‘dispute’ and its intention to eventually bring proceedings under the bilateral investment treaty between Malta and China.

A year later, in June 2021, noting that Malta had ignored its letter, Alpene filed a formal request for arbitration against Malta before the ICSID.

The ICSID is an international arbitration institution established in 1966 for legal dispute resolution and conciliation between international investors and States, known as investor-state dispute settlement, or ISDS.

The choice of using his Hong Kong company Alpene and dragging in Malta’s 2009 Bilateral Investment Treaty (BIT) with China not only offers Ali Sadr protections but also potentially places Malta at odds with China, a country Malta has been increasingly courting for large investments.

A breach of Malta’s BIT with China would place such investments in jeopardy.

Alpene claimed that Pilatus Bank was effectively expropriated and that Malta was “engaging in malicious investigations and harassment”.

Alpene also claimed that threats of criminal prosecutions against Ali Sadr or even leaks of conclusions of criminal inquiries represent continued forms of harassment “in retribution” for bringing the ICSID arbitration against Malta.

On 14 September, the ICSID accepted Alpene’s arguments and ‘recommended’ a suspension of all proceedings by Malta, including criminal proceedings, that could affect Alpene’s rights under the relevant treaty, including its right to call witnesses such as Ali Sadr, until the tribunal has conclusively decided the case.

Malta’s courts have now rejected the arguments made by the AG’s Office, which appears to be throwing spokes in the wheels of justice at every fork in the road and the case continues in full public view.