Attorney General Peter Grech has told Finance Minister Tonio Fenech that any legal action against BWSC, the Danish firm awarded the contract for the extension to the power station at Delimara, would likely fail because the company made no false statement in its tender.
The AG’s legal opinion was tabled by Mr Fenech in Parliament yesterday.
The minister had asked the AG for legal advice as to whether the facts were likely to form the basis of a successful civil action by the government against Burmeister & Wain Scandinavian Contractor A/S (BWSC) as a result of a statement of excluding circumstances made by the company on March 4, 2008, in the context of its submission of a tender for the supply of electricity generation capacity to Enemalta Corporation.
The Attorney General observed that the wording of the statement was specifically addressed to the tenderer and included the application of contractual penalties together with exclusion as a sanction following a false declaration.
The tender document had made it clear that tenderers who had been found guilty of making a false declaration would incur financial penalties representing 10 per cent of the total value of the contract being awarded.
It had been alleged that BWSC had signed the statement knowing, or in circumstances where it reasonably ought to have known, that some of its suppliers and/or sub-contractors had previously been found guilty by a foreign court of bribery and corruption.
The AG said that if the case were to be taken before a court of civil jurisdiction in Malta that allegation would have to be proved up to the level of probability required for the discharge of the burden of proof demanded of the plaintiff in a civil action.
His advice left the question as to whether the allegations of fact about the situation of the sub-contractors were capable of being proved up to the level required by a court of civil jurisdiction unpre-judiced, but assumed the allegation to be capable of such proof for the purposes of legal analysis.
The tenderer was BWSC and nobody else. It was the company which had submitted the tender and which eventually took on the obligations of the con-tract towards Enemalta Corporation when it had signed the contract.
It therefore followed that if the company made no false or misleading declarations about its own situation in the statement, any action filed against it on the basis of allegations to the effect that one or more of its sub-contractors did not meet the standards required by the statement was most likely to fail.
The contract had been signed only between Enemalta and BWSC, not a consortium. It was not at all likely that a court would consider any person who did not appear as a party to the contract to have in fact been a party. In the contract, sub-contractors had been specifically listed as sub-suppliers and sub-contractors.
Any action alleging that the contract had been concluded with a consortium, and that BWSC was therefore obliged to take the situation of all members of the “consortium” into account when making its statement of excluding circumstances, was very likely to fail.
In order that the company could reasonably be held to have made a false declaration in terms of the statement, it would have to be shown either that it had actually made a statement which referred to the situation of its sub-contractors or at least that it was asked questions which implied that a truthful answer should have given the said information and it had failed to do so.
Such litigation based on the alleged making of a false statement by the company would not be at all likely to succeed, the AG wrote.