Enemalta was given unequivocal legal advice to settle its differences with Danish power company BWSC, The Sunday Times of Malta has learnt.
Clearly, Enemalta was in a stronger position to pursue its claim
Legal firm Camilleri Preziosi told the State-owned company that its interests would be best served by settling on the terms announced earlier this week which saw both companies withdrawing their claims, according to Government sources.
Meanwhile, auditing company RSM Malta told Enemalta that it would not be beneficial to push for arbitration and it “may be better” to seek some form of negotiated settlement, according to documents seen by this newspaper.
The decision to settle the various claims was taken by Enemalta’s board and sources confirmed that the Government did not feel the need to seek the advice of the Attorney General on the matter.
The settlement is expected to be tabled in Parliament in the coming days, sources said.
Energy Minister Konrad Mizzi came under fire earlier this week in Parliament where former Finance Minister Tonio Fenech accused him of giving up Malta’s claims too easily.
When contacted, Mr Fenech said the information he was given when he was still minister was that Enemalta’s position was “very strong compared with that of BWSC”.
“I have not seen the legal advice. But I have seen the report by RSM which shows that the position of Enemalta was stronger than that of BWSC. I believe there shouldn’t have simply been a settlement of not pursuing each other’s claims. Clearly, Enemalta was in a stronger position to pursue its claims,” said Mr Fenech.
“I am sure that if they went into negotiations to insist on Malta’s stronger position, Enemalta would have got a better deal.”
Dr Mizzi said in Parliament that BWSC had withdrawn its claims of more than €13 million compared with the €8 million withdrawn by Enemalta. Both the legal and commercial advice given to Enemalta was unclear about BWSC’s claims since most of the claims had not been substantiated by the company.
Camilleri Preziosi said the claims appeared to be valid while RSM said “there is no denying the fact that BWSC are owed a degree of these claims but this is very difficult to quantify in the absence of factual and substantiated information”.
Both RSM and Camilleri Preziosi also raised doubts on most of Enemalta’s claims but RSM said it should be able to recover the greater part of €1.6 million for “other negative variations” and “the use of reagents”.
The settlement was reached after negotiations following correspondence initiated by both sides, Government sources said.