Shoreline Mall sister company initiates €24m arbitration claim against Turkish contractor

Shoreline Contracting Limited (SCL), a sister company of Shoreline Mall plc, has initiated international arbitration proceedings against the Turkish-linked Koray Group, escalating a longstanding dispute over construction delays and alleged contractual breaches related to the Shoreline development project.

In an announcement issued on 14 November, Shoreline Mall confirmed that SCL has executed the Terms of Reference for proceedings before the International Chamber of Commerce (ICC), registered as Case No. 29243/ELU.

The arbitration names seven entities and individuals associated with Koray Global Malta Limited (KGML), the contractor initially engaged to deliver core elements of the Shoreline project.

Among those cited are three Turkish construction and property firms within the Koray Group, as well as Orhun Kartal, identified as the group’s ultimate beneficial owner. The remaining respondents include energy and real-estate entities tied to the group’s broader corporate structure.

SCL is seeking damages, interest and costs exceeding €24 million, alleging that the respondents bear direct or indirect responsibility for KGML’s failure to meet its contractual obligations. Two of the respondent companies are said to have acted as guarantors for the timely performance of the works and the fulfilment of all commitments undertaken by KGML.

The company stated that SCL has already taken steps to safeguard its position and will continue to pursue precautionary measures against KGML and the listed respondents in Malta and other relevant jurisdictions as it seeks to secure its claims.

A dispute years in the making

The arbitration marks the latest phase of a dispute that dates back to March 2024, when SCL terminated its contract with KGML, citing material breaches and significant construction delays.

At the time, SCL claimed it had paid roughly 80% of the contracted amount. Yet, works remained incomplete, and the contractor allegedly refused to hand over access to key areas of the development.

KGML has consistently rejected these assertions and mounted its own legal actions. The company secured a precautionary garnishee order in Malta for an amount understood to have initially totalled around €56 million, freezing various bank accounts connected to the wider Shoreline group. Although parts of the order were later modified, attempts by Shoreline to have the measures lifted entirely have so far been unsuccessful.

The dispute has since broadened beyond Malta’s courts. With the ICC process now underway.

The confrontation unfolds during a challenging period for Shoreline Mall. In its interim results to 30 June 2025, the company reported a loss of €1.6 million despite generating €2.4 million in rental income from commercial tenants. The company faces maturity of its secured bonds in August 2026, but despite concerns, it has assured shareholders it will meet its commitments.

Despite these pressures, the company has maintained that operations at the Shoreline Mall remain fully functional and unaffected by the dispute with KGML.

Both sides face significant financial and reputational stakes, while Shoreline’s bondholders and commercial tenants will be watching for signs of resolution in a dispute that has already cast a long shadow over one of Malta’s highest-profile developments.