Government Claimed Steward Fraudulently Misrepresented Its Financial Position
The Maltese government has published a 212-page document outlining the conclusions of its international arbitration case with Steward Healthcare.
The case, heard before the International Chamber of Commerce (ICC), was originally filed by Steward, but the government lodged counterclaims of around €760 million in response.
The government’s main defence initially centred on the argument that the hospital concession contracts were null and void because they constituted illegal state aid under EU law.
It also accused Steward of fraudulently misrepresenting its financial position when taking over the concession, acting in bad faith, and failing to deliver promised investments in the hospitals and medical tourism projects.
Government lawyers further argued that discounts should be applied to any benefits received by Steward, citing unmet hospital investment targets, excessive director salaries, questionable expenditures, and even alleged misuse of funds for surveillance activities targeting government officials.
However, the Tribunal rejected these claims.
It found that the government’s payments to Steward were made for health services, not hospital upgrades, meaning that Steward itself was responsible for securing funding to improve the hospitals before claiming further payments under the concession.
The company, however, failed to carry out these improvements.
After the Court of Appeal’s final judgment in the case filed by PN MP Adrian Delia, the government added a new line of defence, arguing that the contracts were rescinded for breaching the Government Lands Act, a point which became its primary defence.
Steward, on the other hand, filed claims totalling around €148 million, including a €100 million termination payout it argued it was owed.
The Tribunal upheld the government’s position on the Government Lands Act breach and rejected Steward’s €100 million claim.
On this basis, it dismissed both Steward’s and the government’s broader financial claims.
It then assessed the benefits each side received over the duration of the concession, concluding that the government must pay Steward €4.8 million, the difference between what each side had gained. Both parties were ordered to cover their own legal and expert costs.
The Tribunal did not rule on the allegations of fraud, interpreting the Court of Appeal’s judgement as having found collusion and simulation, rather than fraud. It said the contracts were null and void because they breached the Government Lands Act.
Although the award ordered the government to pay €4.8 million, officials said they are still reviewing the full decision with its legal team to determine the next steps.
The arbitral tribunal was chaired by Michael Bühler, with David Kavanagh (nominated by Steward) and Cecilia Carrara (nominated by the government of Malta) serving as co-arbitrators.
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