Court dismisses Steward’s appeal, finds ‘collusion’ between company and Government officials

Steward Health Care Malta’s (SHCM) contract to run three state hospitals in Malta and Gozo has been declared null once again after a court of appeal dismissed the company’s arguments. It also found a “collusion” between the company and “high Government officials or its agencies”.

The decision, taken on Monday (today), confirmed a judgement earlier this year to cancel contracts related to the privatisation of St Luke’s Hospital, Karin Grech Rehabilitation Hospital and Gozo General Hospital. This was done on the basis that SHCM had not fulfilled its contractual obligations, with the court concluding that the hospitals deal appeared to be fraudulent.

The court, presided by Chief Justice Mark Chetcuti, joined by Judges Giannino Caruana Demajo and Anthony Ellul, confirmed the original judgement by Judge Francesco Depasquale. It only amended the fact that the costs of the case were to be shared between Government and SHCM, and not solely incurred by SHCM.

The deal had initially been reached in 2015 with Konrad Mizzi at the head of negotiations, as Minister for Health. Nonetheless, he continued with the negotiations himself, even though he was later named Minister of Tourism. The hospitals were given to VGH, yet just two years after, the concession was sold to SHCM together with €55 million in debts for the nominal price of €1.

The February judgement was then appealed by SHCM, with the company requesting a preliminary ruling by the European Court of Justice. The company had said that it “emphatically rejects the narrative of the judge’s findings in relation to SHCM, an assessment that was made with no basis in evidence”.

The original court decision had placed the blame for the “fraudulent” deal on SHCM, yet the court of appeal today stated it also believed that there was a “collusion between SHCM and high Government officials or its agencies”.

The court said that the aim of this was to “draft contracts” which are not intended to deliver a “quality medical service, but other things”. It also remarked that Government failed to protect national interest by defending SHCM.

Following today’s decision, Government has said that it “did not wait” for the ruling to take control of the hospitals. It said that back on 21st March, it informed SHCM that it is making a “controlled step-in” and on 4th April it took control of the three hospitals.

“Government had made it clear that the controlled step-in and the termination were to be done with conditions listed by Government, and Government has controlled the hospitals for various months and has started implementing a number of initiatives,” Government’s statement read.