The Court of Appeal, presided by Madam Justice Joanne Vella Cuschieri, has confirmed a judgment condemning The Malta Independent on Sunday and its online edition to pay €5,000 in libel damages to Keith Schembri and Malcolm Scerri.

Just last week, the same court, presided by Mr Justice Anthony Ellul, had overturned a sentence imposed on the newspaper in an identical case filed by Brian Tonna and Karl Cini, saying the fact that the press was commenting and asking questions was “beyond legitimate.”

The case had been filed after two articles entitled ‘Panama Papers: HSBC investigation expected into alleged fraudulent documents vouching for Keith Schembri and Malcolm Scerri’ and ‘Probe expected into alleged fraudulent documents vouching for Keith Schembri, Malcolm Scerri’ were published in May 2016.

The libel suits were filed against The Malta Independent on Sunday’s former content director Pierre Portelli, as well as editors David Lindsay and Stephen Calleja, arguing that the articles were defamatory.

Judge Joanne Vella Cuschieri


The articles had been follow-ups to a story published by the same newspaper’s then-columnist, Daphne Caruana Galizia, claiming that HSBC Bank Malta was expected to launch an investigation into the possible fraudulent presentation of documents concerning Mr Schembri and Mr Scerri.

The newspaper had said an investigation was expected to be carried out by the bank after two reference letters issued to Keith Schembri and Malcolm Scerri carried the letterhead of the Attard branch, which had been closed for some time.

After the publication of the report, the bank had confirmed the authenticity of the documents, saying that the use of the Attard branch letterhead was the result of an administrative error.

In October last year, Magistrate Francesco Depasquale had awarded €5,000 in libel damages, ruling that the defendants had opted to publish, almost in its entirety, a blog post by Daphne Caruana Galizia, who had originally made the allegations..

In a judgment upholding the magistrate’s decision, Madam Justice Joanne Vella Cuschieri wrote that “The court notes that readers…were led to believe that the mentioned ‘investigation’ went far beyond the verification as to why one address and not another were printed on the letters of recommendation, so much so that even the comments showed that the reader had ‘conveniently’ been led to believe much more than this – and the fault for this lies solely with the appellants who made Daphne Caruana Galizia’s article their own, by giving an appearance of confirmation of the allegations mentioned in it without giving all the acts known to them particularly the information that it was probably just an administrative error.”

Keith Schembri 


The online portal had also allowed third parties – who were difficult to identify – to post comments on the article, some of which were defamatory, “without being in any manner controlled or censored prior to publication,” the first court had held. This, too was upheld by the Court of Appeal, which said that the editors had failed to remove comments which were making inferences about Schembri and Scerri’s character.

Ruling that the amount of damages awarded was also justified, the court said that the imposition of such high damages should serve as an “eye opener” to all those in the appellant’s position. “Nothing justifies the bad and malicious use of the services which they offer, including the comments which are left online (even if written by third parties).”

The principle of freedom of expression is not to be interpreted as an unlimited licence to sully reputations “without any factual basis”, said the court.

In contrast, Mr Justice Anthony Ellul found, in an identical case institute by Brian Tonna, that the report was not defamatory, and that the bank had only informed the newspaper about the administrative error after the report was published. It also noted that, the online version of the report was updated with the bank’s reply shortly after it was received.

The first court had been wrong when it said that Portelli had been notified that the issue was an administrative error but had omitted to include it in the article, said the judge. From his testimony, it emerged that Aloisio had spoken to Portelli after the publication of the article.

Malcolm Scerri


The plaintiffs had argued that professionalism required that the journalists check with HSBC first before publishing, but it was obvious that the bank was not going to give information about its clients to the press, noted the court.

That a newspaper comments and asks questions is beyond legitimate, Judge Ellul said. “Defamation would subsist had the newspaper taken the position that they had falsified the documents in the article. This is not the case.”

The court also said the issue should be taken in the context of the Panama Papers revelations which were all over the news at the time.

With Keith Schembri being the Chief of Staff at the Office of the Prime Minister and therefore one of the PM’s closest aides, it would be “obvious to everyone” that his mention in the Panama Papers and his companies in the BVI would draw the press’ spotlight on matters such as these. The same applied to Tonna and Cini who not only serviced Schembri but were also mentioned in the Panama Papers themselves.

“An important duty of the media is to act as a watchdog on those in public life and report things which are of public interest,” said the judge, ruling that the material was of public interest.

The newspaper had not taken the position that the documents were falsified, said the judge, but were simply reporting what Caruana Galizia had written in her blog. The fact that the documents appeared to be issued by a long-closed branch of the bank raised a legitimate question as to their authenticity.