The European Commission has dropped a court case against Malta after the Government reached a €5 million out-of-court settlement with petroleum giant Shell.
A Commission spokesman said it had been informed by the Maltese authorities last year that the issue had been settled and so Brussels decided not to pursue the issue in the European Court of Justice.
A spokesman for the Office of the Prime Minister did not wish to give details on the deal brokered between the previous Administration and Attard Services Limited, the local representatives of Shell.
He would only say that, while the Government was looking into the matter, “those who took the political decisions should answer and shoulder responsibility”.
In 2011, after years of warnings to the island, the Commission decided to refer Malta to the ECJ for incorrect application of the rules on airport ground handling.
It had argued that the incorrect application of the EU directive by the Government resulted in the lack of effective competition for the supply of fuel at Luqa airport, possibly leading to additional costs to airlines and, ultimately, passengers.
Local court documents show that the issue had been going on for years.
In 2005, Attard Services had started legal proceedings against Enemalta and the Malta Resources Authority for denying it access to Enemalta’s infrastructure to supply aviation fuel at the airport.
Despite winning a competitive tender aimed at opening the market, the private company was effectively barred from competing with Enemalta in the lucrative business for seven years as the State-owned company charged exorbitant prices for fuel supply infrastructure while maintaining its monopoly.
Enemalta was legally bound, under EU rules, to provide its infrastructure to other operators. Ironically, the infrastructure was previously owned by Shell, prior to the sector’s nationalisation in 1979.
The situation effectively meant that Enemalta continued to be the sole supplier of aviation fuel at the airport while keeping its potential competitor out.
Attard Services was originally asking for about €30 million in compensation.
Following years of court battles and cases filed before the Office for Fair Trade, the Government decided to change its position and start out-of-court negotiations with the private firm to solve the issue amicably.
Sources said that after months of discussions between technical teams from the Government and Attard Services, a deal was struck in November and formalised by the Cabinet in January during the electoral campaign.
The Government agreed to a €5 million settlement in exchange for Attard Services dropping all pending cases against it and its entities.
Representatives of Attard Services refused to comment, citing confidentiality and commercial interests.
Speaking in Parliament earlier this week, Energy Minister Konrad Mizzi said that, without entering into the merits of the case, it was a scandal that the former Cabinet had decided on this payout during the electoral campaign.
The Government agreed to the settlement if Attard Services Ltd, local representative of petroleum giant Shell, dropped legal action. Photo: Reuters