Eighty-two shareholders of the National Bank of Malta can finally start negotiating damages due to them after the Constitutional Court confirmed their rights were breached when they were forced to surrender their stakes without compensation 40 years ago.

“This is not only a legal victory. It is a moral victory for all those stakeholders who are still alive and the heirs of those who have passed away.

“It has been 40 years since the government expropriated the bank,” Milica Micovic, one of the main shareholders, told Times of Malta yesterday.

The saga started in November 1973 when the Dom Mintoff government took over the bank.

This is a moral victory for all those still alive and the heirs of those who passed away

A few months later, Bank of Valletta was set up and took over the business of the National Bank of Malta. During the process, shareholders were not given any form of compensation, triggering a drawn-out legal battle.

This week’s Constitutional Court decision means that shareholders can start the process to liquidate the damages they suffered as a result of their breach of human rights.

Ms Micovic, a director of the largest corporate shareholder B. Tagliaferro and Sons Ltd, described the judgment as “very positive”.

On Tuesday, the Constitutional Court  presided by Mr Justice Tonio Mallia, Mr Justice Noel Cuschieri and Mr Justice Joseph Azzopardi  confirmed two judgments handed down earlier this year by Mr Justice Joseph Micallef.

The two judgments concerned two groups of shareholders: 33 who had not signed their shares away to government and 49 who had signed to release their shares.

The judge ruled that the shareholders’ fundamental human rights had been breached when they were made to surrender their stake without compensation.

This applied also to the 49 who signed off their shares as they also should have been compensated.

The court cases had been instituted by shareholders or their heirs in 1992 against the Prime Minister, the Finance Minister and the Administration Council which briefly ran the bank in 1973.

During the proceedings, some shareholders claimed the share seizure was part of a plan by the then government to have dominance over the economic sector.

They implied that this was part of a strategy orchestrated by the government to take over the bank.

In the two separate preliminary judgments  handed down in January and February – the court upheld the claim that their constitutional rights had been breached.

The court said it was clear shareholders were forced to give up their shares, even though it might have been in the national interest or to avoid the bank’s financial collapse.

Mr Justice Micallef had said that, even if the takeover of the bank had been a “salvage operation”, this did not give the government the right not to compensate the shareholders for their losses.

The next step was for the judge to hear submissions over the value of the shares in question and the liquidation of damages. This was delayed when the preliminary decision was appealed in the Constitutional Court – which this week upheld the original decision and ordered the case be sent back to the first court for continuation on the liquidation of damages.

The former Nationalist government had unsuccessfully tried to negotiate an out-of-court settlement with shareholders. Sources said the government had offered about €20 million in compensation but this was not accepted.