Malta’s iconic film facilities in Rinella, built in the 1970s, will be returned to the government after a nine-year court battle over unpaid rent which has left the Land Department out of pocket by €1.4 million.
In a final decision by the Court of Appeal last week, Mediterranean Film Studios Limited, the company managing the facility, was ordered to vacate the premises within 40 days.
The company had been given a 65-year lease in 1995. But it failed to pay most of the rent due, running up a debt of some €1.4 million.
Court records also show the company was massively in debt to other creditors, including some €5.4 million owed to Bank of Valletta and Vassallo Builders.
The Land Department started legal action against the company in 2005 after its failure to pay the annual rent since 1998.
The company, controlled by German entrepreneur Jost Merten, had appealed a 2012 court order to move out of the facilities and return the studios to the department.
However, it took another two years of litigation before the appeal court confirmed the decision and gave the company 40 days to vacate the premises.
The court condemned the company for not respecting the conditions of its agreement with the government and never showing any goodwill by refusing to pay its annual rent even during procedures in court over the issue.
The court also declared that the lease contract signed in 1995 was null and ruled that the property, which spans more than 100,000 square metres, should revert back to the government within two months.
Contacted by Times of Malta, Mr Merten said he was abroad and asked for questions to the sent by e-mail. However, no reply was received by the time of going to print.
The government welcomed the judgment, saying the facility had been neglected and a lot of business had been lost as a result. The property would now be turned into a “city” for the film industry, offering all the services and contributing to economic growth.
Film Commissioner Engelbert Grech said the commission had been awaiting this court ruling. “A government decision is now expected to be taken in the coming weeks on the future direction of the facilities,” he said.
Sources close to the film industry told this newspaper that the facility had continued to be used by the international film industry while the company was in court with the government.
The last time the facility’s tanks – which are among the largest in the world – were used was last year for a BBC production called The Whale.
They have hosted major productions in the past including Raise the Titanic, Christopher Columbus, U-571, Troy and more recently Pirate Pete and the Sea Monster.
However, it was shown in court that the facilities failed to attract enough commercial activity to make running the studios feasible.
“The private company had invested millions in a new attraction called the Rinella movie park in 1998 to try to create alternative business for the studio’s film facilities. This was a flop and it had to close down just two years later,” sources said.
“This was the beginning of the end for the company running the facilities.”
Cornelia Azzopardi Sherman, a top official running Mediterranean Film Studios, had told the court that negotiations were under way with third parties to take over the facilities and pay the outstanding debts.
However, the prospective investor, a Russian company, got cold feet when it failed to acquire a government guarantee that the court case against Mediterranean Film Studios would be cancelled.