Shareholders of the National Bank of Malta have filed a case before the European Court of Human Rights (ECHR), arguing that the compensation recently awarded to them by Maltese courts is “manifestly inadequate”.
The application, filed last week, marks the final legal hurdle in a 53-year battle that began when the Dom Mintoff government took over the bank in 1973.
The shareholders are challenging a Maltese court decision that slashed their compensation from €111 million to roughly €71 million last year.
They argue the Maltese courts used a “fundamentally flawed” formula that treated their thriving business like a piece of empty land rather than a profitable, multi-billion-euro bank.
A ‘totalitarian’ struggle for freedom
The legal move follows decades of domestic litigation over the forced takeover of the bank, which was eventually replaced by Bank of Valletta.
Jeremy Cassar Torregiani, great-grandson of the bank’s founder and a lead figure in the legal fight, told Times of Malta and all shareholders last week that the case before the European court is a stand against state overreach.
“It’s been a long journey 53 years since the taking. A miracle to have got this far and now the final hurdle,” he said.
“We resist the forces of collective totalitarians and fight always for the rights and freedoms of the individual. As a new dawn approaches let this remain our overriding awareness – freedom above all else even before life itself.”
‘Flawed’ math and 50 years of lost profits
The core of the shareholders’ argument to the ECHR is that the Maltese courts wrongly applied rules meant for “property and land” to a “going concern”—a living, breathing business.
They argue the court only looked at the 25% stake the government still holds in BOV, ignoring the 75% already sold to third parties over the decades. They point out that the €71 million award is less than what BOV typically earns in just six months of operating profits.
They also argue the Maltese court applied a 30% discount to the value because of “market uncertainties,” a tactic usually reserved for stagnant real estate. They said this is illogical because BOV’s actual performance and its current €1.3 billion market value are proven facts, not guesses.
They are now asking the European Court to apply the principle of full reparation, essentially wiping out the consequences of the 1973 takeover by awarding a sum that reflects what the bank would be worth today had it never been seized.
A decades-long saga
The legal battle in the Maltese courts has been a two-stage process that ultimately confirmed that shareholders’ rights were breached but sharply divided opinion on what that victory is actually worth.
In March 2024, the Civil Court delivered what many considered a historic ruling. That judgment ruled that the 1973 takeover forced the shareholders to give up their property without receiving a single cent.
The court ruled the state had taken a valuable asset for free, and it had to pay back its fair market value at the time.
The judge ordered the government to pay €111 million in compensation to two groups of shareholders. While this was far less than the hundreds of millions the shareholders had initially claimed, it was seen as a massive acknowledgement of the injustice.
But the government immediately appealed and in November last year, the Constitutional Court delivered its final word. While the judges agreed that a constitutional breach had occurred, they fundamentally changed how the compensation was calculated, slashing the total from €111 million to approximately €71 million.
It limited the compensation to the government’s current 25% stake in BOV, rather than the bank’s total value.
The final figure was further slashed by two significant deductions: a 30% “public interest” cut to reflect the state’s role in saving the financial system in 1973, and an additional 20% deduction for “market uncertainties” regarding how the bank would have fared without state intervention.
But the shareholders have not accepted the figure. In their application filed last week, they told the ECHR that “confining damages to the present value of the State’s remaining 25% stake—while ignoring the value realised from the 75% sold to third parties over the decades—is illogical and distorts equitable valuation”.
“The domestic award of approximately €71 – 72 million (reduced from an initial aggregate figure approaching €111 million for all shares) is manifestly inadequate […]. It equates to less than six months’ typical operating profits of the going concern now under State influence—a glaring disproportion after 53+ years of continuing interference, during which the applicants lost use, enjoyment, dividends, and commercial opportunities that accrued exclusively to the perpetrator State.”