Fimbank, which is battling a €20.4 million claim, said yesterday it had “a strong case backed by robust arguments”.

In a company announcement issued after The Times broke the story yesterday, Fimbank confirmed that the bank had appealed a garnishee order issued by a judge on the request of a Maltese turnkey contractor, Azrow International Trading Company Ltd, which is expecting the bank to honour a letter of credit it had approved.

The garnishee order was temporarily suspended, giving the company time to make its representations on the bank’s request for a revocation of the warrant. A reply was filed yesterday but the documents are not yet accessible.

The bank said the case was a “commercial litigation” before the courts so it was not in a position to make public statements about the details or merits of the case. It also confirmed that the court had temporarily suspended the garnishee order it had issued following its request to have it revoked.

In its application for the warrant, the company said it had entered into a business deal to take charge of the construction of a motor vehicle recycling plant in Libya. The other party to the contract undertook to pay the company, through a letter of credit for the full value of the project, €29 million. The letter of credit was issued by the National Commercial Bank of Libya and received and confirmed in Malta by Fimbank.

The first claims made by Azrow against the letter of credit were honoured by Fimbank. Then, Azrow was informed by Fimbank that the National Commercial Bank of Libya claimed there was some default in their internal procedures.

In turn, Fimbank stopped honouring the letter of credit and this gave rise to a lawsuit by the company against Fimbank in the First Hall of the Civil Court.