Understanding the ICC ruling on Steward vs Malta

In 2015, the Government awarded a concession to Vitals Global Healthcare for the redevelopment, management, and operation of the Gozo General Hospital, Karin Grech Rehabilitation Hospital, and St Luke’s Hospital. After Vitals failed to meet its obligations and secure the necessary financing, the concession was transferred to Steward Health Care in early 2018. Steward likewise did not deliver the promised redevelopment works. In 2023, the Maltese courts annulled the concession, citing serious shortcomings in its award, and in November 2025 an international arbitral tribunal confirmed that the claim by Steward for a termination fee of €148 million was not valid, with the tribunal accepting Malta’s defence that the contracts were already null and void under Maltese court judgments. The tribunal did not assess fraud allegations or rule on the merits of the concession’s validity.

The public discussion surrounding Malta’s hospital concession to Vitals Global Healthcare (VGH) and Steward Health Care has been dominated by one number: €400 million. It has been repeated so often that it has become shorthand for the entire saga. Yet, the reality is far more complex.  In this article, we will make reference to the National Auditor’s Office (NAO)’s three reports on the VGH Concession, the Maltese courts’ civil judgements and the International Chamber of Commerce (ICC) arbitration award, to piece together what the numbers quoted are and what they actually mean. 

Did Malta pay for services that we didn’t get?

The truth is that Malta did not “lose” €400 million. The country paid for hospital services, and those services were delivered. What failed was not the flow of money or the provision of healthcare, but the promise of investment and infrastructure upgrades that never materialised.

According to the NAO’s three reports, Malta had paid around €456.1 million up to 2021. These reports covered the payments made to both VGH and Steward up to that year. After 2021, payments continued until the courts forcefully terminated the concession. When the ICC tribunal referred to €889 million, it was not quoting cash transfers but calculating the “value” of services delivered and received, which included operational, staffing, and investment components.

Breaking down the NAO’s figures helps explain the confusion. Around €267.6 million were paid for operational services under the Health Services Delivery Agreement. These payments covered the day-to-day running of the hospitals, including clinical, diagnostic, and non-clinical services. Another €188.5 million were government staff salaries for public employees who continued to work at the hospitals even after the concession began. These staff remained government employees, and their wages were paid directly by the State. The total public outflow up to 2021 therefore reached around €456 million.

Item	Description	Cost
Operational Services	Day-to-day running of the hospitals, including clinical, diagnostic, and non-clinical services	€276.6M
Salaries	Government staff salaries for public employees who continued to work at the hospitals even after the concession began	€188.5M
Total	Payments by Government to Vitals and, subsequently, Steward between 2016 and 2021	€456.1M

Beyond 2021, budget allocations continued. The 2022 national budget included €69 million for Steward’s operations, and the 2023 budget added a further €80 million, divided between Gozo General Hospital and Karin Grech Rehabilitation Hospital. This means that total public allocations from 2016 to 2023 exceeded €600 million in real cash terms, not counting smaller residual payments near termination.

So what did Malta receive for all this money? The hospitals remained open and operational throughout. Healthcare services continued, staff worked as usual, and patient care did not stop. This is why the ICC tribunal concluded that Malta had received value for the payments made: the country did get the healthcare services it paid for. However, the infrastructure transformation that justified the concession’s existence in the first place never materialised. St Luke’s Hospital was never redeveloped, upgrades to Karin Grech were minimal, and the expansion of Gozo General Hospital was left incomplete. The ICC tribunal estimated that only €41.48 million worth of capital investment was actually delivered, a fraction of what had been promised.

The Maltese courts went further. In their 2023 judgments, they found that the concession was “simulated”, a term in civil law meaning that the contracts were not genuine. The courts concluded that there had been collusion between government officials and VGH, that payments continued despite non-compliance, and that the entire agreement was fraudulent in the civil sense, rendering it null and void from inception. This annulment was crucial in shaping the ICC tribunal’s decision.

The Arbitration

Steward entered arbitration claiming that Malta had wrongfully terminated the contract and demanded a termination payment of around €100 million, alongside damages that brought its total claim to nearly €150 million. It argued that government delays and land-related issues had prevented it from fulfilling its investment obligations. The Government countered by asserting that the contracts were already void and by lodging counterclaims of approximately €488 million, arguing that Malta had overpaid for services given the lack of investment.

The ICC tribunal rejected both sides’ claims. For Steward, the tribunal ruled that once the Maltese courts had annulled the concession, there was no valid contract left to enforce or terminate. Without a valid contract, there could be no termination payment. Steward also failed to prove that government actions caused its investment failures. Its argument that Malta’s alleged “non-rectifiable defaults” justified compensation was dismissed outright.

For the Government, the tribunal rejected its counterclaims as well. Since the contracts were null and void, there could be no claim for breach of contract damages, in legal terms, one cannot be compensated for a contract that never existed. The tribunal also found that the Government had failed to quantify its alleged losses in a concrete, measurable way.

Instead, the ICC tribunal applied Article 1209 of the Civil Code, which requires the restoration of both parties to their pre-contractual state once a contract is annulled. This meant calculating the total value each side had received over the life of the concession. The tribunal found that the Government had received approximately €889.4 million in value, including €604 million in healthcare services, €234 million in staff services, €41 million in capital investment, and €11 million in miscellaneous items. Steward, meanwhile, was found to have received €884.6 million in value, including cash payments, staff-related value, and other benefits. The difference between these figures, represents the residual balance the Government owes Steward under the legal principle of restoration, not as compensation or damages.

From a legal standpoint, the ICC ruling means that Malta was not robbed of €400 million. The services were delivered, and the payments matched their operational value. However, the oversight failures, weak enforcement of contractual clauses, and the political reluctance to terminate the deal early all contributed to what can fairly be described as one of Malta’s most serious public administration failures in decades. 

The public’s frustration is understandable. Had the concession worked as promised, Malta would likely have seen vastly improved hospital facilities and reduced waiting times. The people were promised a modern solution, partnering the government and the private sector together towards progress. Instead, from day one, the deal faltered and ultimately failed. Good intentions don’t replace good contracts and good governance. 

In the end, the Steward hospitals case is not a story of stolen funds but of governance failure. The hospitals continued to function, but the transformation that was supposed to redefine Malta’s healthcare system never happened. The country did not lose €400 million in cash, but it lost time. Time in which its healthcare system could have been rebuilt for the future.