The Court of Appeal this morning confirmed an award of damages in excess of $20,000,000 in a case involving the sale of shares in ship owning companies.
The judgment was delivered in a case filed by Taljana Finaval Spa against Scorpio Ship Management SAM, Ferentrino Shipping Co Ltd and Ilario Co Ltd. The latter two companies were struck off the register in 2004.
Taljana Finaval Spa, represented by Dr Ann Fenech, filed its action to enforce a promise of sale of shares from Scorpio Management SAM. According to Dr Fenech Scorpio Management SAM had bound itself to sell its shares in Ferentino and Ilario to Taljana Finaval. But the transaction did not take place and Scorpio had sold its shares to a third party.
Dr Fenech requested the court to order the transfer of shares and, if this was no longer possible, to award her clients damages.
The First Hall of the Civil Court had found in favour of Taljana Finaval and had awarded this company $22,200,000 in damages together with interest from the date of the filing of the lawsuit, namely February 2004.
Scorpio appealed from this judgment to the Court of Appeal composed of Chief Justice Vincent Degaetano, Mr Justice Joseph A Filletti and Mr Justice Geoffrey Valenzia.
The company, represented by Dr Louis Cassar Pullicino, submitted that the first court had incorrectly declared that the Maltese courts had jurisdiction to hear and decide the case. The company also appealed from the award of damages and interest.
On appeal the court ruled that the scope of the agreement between the parties was the transfer of shares in a company to be registered in Malta. As a result, the shares were in Malta and the local courts had jurisdiction to hear and decide the case.
The Court of Appeal also confirmed the first court’s judgment and ruled that there existed a promise of sale between the parties. As Scorpio was in default of this agreement, Taljana Finaval was entitled to receive damages
The first court had based its award of damages on the findings of the court appointed experts and the Court of Appeal declared that it concurred with this award. However, on appeal the court varied the date on which interest on the damages award was to commence.
Taljana Finaval had commenced its action with a request for the transfer of shares and it was only when this option was no longer possible had it requested the court to liquidate the damages sustained. The award of damages was delivered by the first court on July 5 2007 and the Court of Appeal ruled that interest on the sum of $22,200,000 was to commence running from such date.