HSBC refuses to pay €2.2 million to a Maltese company despite court judgment

HSBC Bank Malta has still not paid more than €2.2 million owed to a Maltese company despite a final court judgment, followed by an unusual garnishee order against the bank.

The Shift is informed that Tyre Services Ltd has not yet received the money awarded to it, despite winning its case against the bank.

Instead of paying the company upholding the court’s orders, The Shift is informed that HSBC deposited the funds in court and will remain there pending the outcome of new legal proceedings between the two parties. Sources said that HSBC is now claiming that the company still owes it payments on the original loan going back decades.

HSBC did not reply to questions by The Shift as it maintains that it does not comment on pending court cases.

The latest development extends a legal saga stretching back more than two decades over a prominent showroom on Old Railway Road, Santa Venera.

HSBC had acquired the property in 2005 as part of a debt settlement.

However, the courts later found that the acquisition was flawed because prior-ranking hypothecary creditors had not been honoured. Legal title consequently reverted to Tyre Services, although HSBC retained possession of the premises.

In February 2020, the Civil Court confirmed Tyre Services as the property’s rightful owner.

The company subsequently sued HSBC for damages, arguing that an injunction obtained by the bank during the litigation had prevented it from leasing the property and earning rental income.

The Civil Court awarded Tyre Services €851,884 in December 2023.

HSBC appealed, but the Court of Appeal dismissed the bank’s arguments and increased the damages to €1.44 million, excluding interest and costs.

With legal interest accruing since June 2020, the amount due rose to more than €2.2 million.

When HSBC did not pay, Tyre Services filed an executive garnishee order against the bank, targeting funds held through the Central Bank of Malta.

HSBC then sought to have the garnishee order revoked, arguing that the amount owed to Tyre Services should be offset against debts which it claims remain outstanding from the original loan.

That argument was rejected by the First Hall of the Civil Court in May.

In July, the Court of Appeal also dismissed HSBC’s appeal and ordered the bank to pay all related legal costs.

A separate case now remains ongoing, with HSBC maintaining that Tyre Services still owes money on the original loan.

HSBC has therefore secured the €2.2 million by depositing it under the court’s authority, but Tyre Services remains without the compensation awarded under the final judgment while the latest round of litigation continues.