Shoreline owners battling garnishee over a €56 million pending bill

The owners of a large real estate project in Kalkara, Shoreline, are facing significant challenges after the court upheld a garnishee order related to an outstanding construction bill exceeding €56 million.

This issue arose from claims made by Turkish contractors Koray Global Malta Ltd, who allege that the Shoreline owners have not paid for the construction work they completed to develop the area into a substantial shopping mall and residential apartments for resale.

The land in question was originally public property that the government granted to Smart City to establish an information technology (IT) hub.

According to court documents, the litigation between the two parties has been ongoing since 2024.

However, according to the Malta Stock Exchange company announcements, Shoreline only reported the issue to the market last week, months after the contentious issue was taken for arbitration.

Admitting the serious problems it has with its main contractors, Shoreline refuted the claims made but acknowledged that it is still battling the revocation of precautionary warrants and the garnishee order initiated by the Turkish contractors to protect their claimed outstanding payments.

So far, Shoreline’s legal action to revoke the garnishee order has been unsuccessful.

According to its announcement, Shoreline stated that it “will continue to defend its position in arbitral proceedings.” The company reassured its bondholders and clients that its “mall will continue to operate normally” and that it did not anticipate any operational changes.

Currently, several companies associated with the controversial project are owned by South African national Ryan Edward Otto, who also serves as the project’s Chair and CEO.

Other shareholders include lawyers Kevin Deguara and Jean Carl Farrugia. Both lawyers are currently facing criminal charges related to corruption and falsification of documents in connection with the fraudulent hospital deal with Vitals Global Healthcare and later Steward Health Care. They refute the charges.

The deal to acquire 55,000 square metres of land at Smart City was negotiated by Shoreline during the Muscat administration when Keith Schembri, Muscat’s former Chief of Staff, was on the board of Smart City representing the government.

The public land was sub-leased to Shoreline for 99 years for €32 million to build a 350 luxury apartment block over a shopping mall. The shopping mall opened in 2024, but the apartments are still under construction.

The government had given the land to Smart City through a concession in 2007 for €5 per square metre, with the precise intention of building an IT hub and creating approximately 5,000 jobs.

The concession was breached on various fronts, but no action was ever taken to impose fines or rescind the contract.