Shoreline Contracting begins ICC arbitration in Malta

Shoreline Contracting Limited (SCL), the construction arm and sister company of Shoreline Mall plc, has entered a new and highly formal phase of an ongoing international commercial dispute, initiating arbitration proceedings against entities linked to the Turkish-associated Koray Group. The confrontation, which has evolved significantly over the past year, concerns allegations of construction delays, contractual non-performance, and disagreements surrounding the delivery of key components of the Shoreline development project in Malta.

The arbitration—filed before the International Chamber of Commerce (ICC)—reflects the deepening legal and commercial tensions between the parties and signals SCL’s intentions to pursue structured remedies through one of the world’s most authoritative dispute-resolution forums. While both sides have publicly asserted contrasting claims, the matter remains legally sensitive, and neither party has been found liable for wrongdoing by any court or tribunal at this stage.

This expanded analysis examines the background of the dispute, the nature of the arbitration, the corporate implications for Shoreline Mall plc, and the broader significance of the conflict for Malta’s development sector and the parties involved.

Background of the Shoreline development and the contractual relationship

The Shoreline project, located within a prominent area on the island, has been positioned as one of Malta’s most substantial mixed-use developments of recent years. Its construction phases have involved cooperation between Maltese corporate entities and foreign contractors, including Koray Global Malta Limited (KGML), a company associated with the wider Turkish-linked Koray Group.

Shoreline Contracting Limited originally engaged KGML to undertake core construction works on the project. These included major structural phases, finishing works, and other operational tasks that would support the timely delivery of commercial and residential components.

However, by early 2024, disagreements emerged over alleged delays, timing discrepancies, and the fulfilment of contractual obligations. The situation escalated in March 2024 when SCL terminated its contract with KGML, citing what it described as material breaches and significant construction delays. SCL indicated at the time that it had paid approximately 80% of the contracted sum to KGML. Nevertheless, it claimed that substantial works remained incomplete, and access to certain areas of the development had not been handed over in accordance with the contract.

KGML denied these assertions and advanced its own legal measures, indicating its disagreement with SCL’s position. Each party has maintained distinct interpretations of the events, with the matter ultimately transitioning into formal legal and arbitral avenues.

ICC arbitration and the execution of Terms of Reference

On 14 November, Shoreline Mall plc issued an announcement confirming that SCL had executed the Terms of Reference required for ICC proceedings, marking the official commencement of Case No. 29243/ELU. The Terms of Reference serve as the governing document that frames the dispute, defines the claims and counterclaims, and establishes the procedural framework under which the arbitration panel will operate.

The arbitration names seven entities and individuals associated with Koray Global Malta Limited. These include construction and property firms within the Koray Group as well as Orhun Kartal, identified by SCL as the Group’s ultimate beneficial owner. Additional respondents include corporate entities linked to energy and real-estate interests aligned with the Group’s broader network.

SCL claims damages, interest, and costs exceeding €24 million. These claims relate to what SCL alleges were failures by KGML and related entities to meet contractual obligations during the execution of the project. According to SCL’s position, two of the respondent companies acted as guarantors responsible for ensuring timely performance and compliance with the obligations undertaken by KGML. SCL maintains that these guarantees, combined with the contractual documentation, support its claims for compensation.

It is important to note that the ICC arbitration process does not assume the validity of any allegation unless formally upheld by the tribunal. All respondents retain full rights to defend their interests, present evidence, and contest SCL’s claims throughout the proceedings.

Precautionary measures and Malta-related legal actions

Parallel to the ICC arbitration, the dispute has already generated significant litigation and precautionary measures within the Maltese jurisdiction. Earlier this year, KGML obtained a precautionary garnishee order in Malta, initially understood to total approximately €56 million. This measure provisionally froze various bank accounts associated with entities within the broader Shoreline group.

Such precautionary actions do not represent a final determination of liability. Rather, they are legal tools designed to provisionally secure potential claims until underlying disputes are resolved. Parts of the order were subsequently modified, though attempts by the Shoreline group to have the measures entirely lifted were not successful at the time of reporting.

SCL recently confirmed that it intends to continue taking steps to safeguard its legal and financial position both in Malta and other relevant jurisdictions. Precautionary measures remain a common strategy in complex cross-border disputes where parties seek to protect their potential claims during ongoing litigation or arbitration.

The significance of international arbitration for both sides

The decision to proceed through the ICC indicates the seriousness and international dimension of the dispute. ICC arbitration is widely regarded as a prestigious and neutral mechanism for resolving commercial conflicts, especially those involving multinational parties or complex contractual frameworks.

For SCL, the arbitration serves as a structured platform through which it can seek financial remedies and enforce what it believes to be valid contractual rights.

For the Koray-linked respondents, the ICC process provides an opportunity to respond to the claims, contest the allegations, submit counter-arguments, and present documentation demonstrating their position.

While the outcome remains unknown and may take considerable time, both sides face significant financial, professional, and reputational impacts linked to the eventual determination of the dispute.

Shoreline Mall’s financial position and operational continuity

The dispute has arisen during a period of financial pressure for Shoreline Mall plc. According to its interim results for the period ending 30 June 2025, the company registered a loss of €1.6 million, despite generating €2.4 million in rental income from its commercial tenants.

The financial performance has been affected by broader economic conditions, sector-specific challenges, and development-related expenditures. Additionally, the company faces the approaching maturity of its secured bonds in August 2026, a factor that has drawn attention from analysts and bondholders.

Nevertheless, Shoreline Mall plc has expressed confidence in meeting its obligations. Public statements from the company have emphasized that daily operations continue unaffected and that the retail and commercial elements of the mall remain fully functional. The company has also reassured stakeholders that the dispute with KGML has not impaired its ability to service tenants or maintain operational continuity.

Wider implications for Malta’s development sector

The conflict between SCL and KGML highlights the complexities of large-scale development projects involving cross-border contractors. Malta’s construction and property sectors often rely on partnerships between local project developers and international firms, creating multifaceted legal frameworks that can become contentious when disagreements arise.

Disputes of this nature can introduce delays, cost increases, and administrative burdens for stakeholders. At the same time, they underscore the importance of robust contractual design, transparent performance guarantees, and strong risk-management strategies in international development projects.

The initiation of ICC arbitration may also be observed closely within the industry. It signals the willingness of Maltese companies to escalate disputes to international tribunals when contractual disagreements cannot be resolved domestically.

Stakeholder interests and reputational considerations

Beyond the direct legal and financial implications for SCL and the Koray-linked entities, the dispute carries relevance for several stakeholder groups:

• Bondholders: Given the upcoming bond maturity in 2026, bondholders are expected to monitor any developments that could impact the financial stability of Shoreline Mall plc or associated entities.
• Commercial tenants: Retailers and occupiers within the Shoreline Mall complex rely on operational stability. The company’s assurance that operations remain unaffected is an important element in maintaining commercial confidence.
• Regulators and policymakers: Large disputes involving international contractors contribute to broader discourse about regulatory oversight and contract enforcement in Malta’s construction sector.
• Industry observers: The arbitration may serve as a case study on how cross-border disputes in development projects are managed, particularly when multiple jurisdictions and guarantor companies are involved.

While the arbitration process will unfold privately, the commercial implications are likely to remain a subject of interest.

Looking ahead: potential outcomes and timelines

ICC arbitration proceedings can take many months or even years, depending on the complexity of the claims, the volume of evidence presented, and procedural decisions taken by the tribunal. Potential outcomes range from complete dismissal of claims, to partial awards, to full awards in favour of one party. In some cases, settlements may occur before the tribunal delivers a final decision.

Whatever the result, the tribunal’s determination will be enforceable under international arbitration conventions, which provide mechanisms for recognition and enforcement across numerous jurisdictions.

Until the tribunal reaches a decision, SCL and the respondents will continue to navigate the parallel legal processes within Malta, alongside the international proceedings before the ICC.

Conclusion

The dispute between Shoreline Contracting Limited and the Koray-linked entities has evolved into a complex, multinational legal matter that now sits before one of the world’s most reputable arbitral institutions. With ICC arbitration officially underway, both sides are committed to pursuing their respective positions through formal channels that prioritize procedural fairness and legal rigor. While the claims and counterclaims remain unproven at this stage, the case underscores the importance of clearly defined contractual obligations, transparent performance guarantees, and effective cross-border risk management in major development projects.

For Shoreline Mall plc, the arbitration unfolds during a period marked by financial pressures and operational scrutiny. Yet the company has maintained that its commercial activities remain stable and unaffected. Stakeholders—including bondholders, tenants, and industry observers—will continue to monitor developments closely, particularly given the potential implications for Malta’s wider construction sector and for international contractors engaged in local projects.

Ultimately, the outcome of the arbitration will depend on the evidence presented and the tribunal’s independent assessment. Regardless of the final award, the case serves as a reminder that large-scale developments require strong governance, careful oversight, and preparedness for unforeseen disputes. As proceedings advance, a resolution—whether through a tribunal decision or a negotiated settlement—will be essential to restoring clarity and providing closure for all parties involved.

Frequently asked questions

What is the nature of the dispute between SCL and Koray-linked entities?
The dispute concerns allegations of construction delays, contractual disagreements, and non-performance related to the Shoreline development project in Malta. Both sides present differing interpretations of the events, and no liability has been established.

Why was ICC arbitration chosen for this case?
ICC arbitration provides a neutral, internationally recognized forum for resolving complex commercial disputes involving multinational parties. It allows both sides to present evidence and arguments under a structured legal process.

Are the claims made by SCL against the Koray-linked entities proven?
No. The claims form part of the ongoing arbitration process. The ICC tribunal will assess the evidence and determine whether any claims are valid.

What is the significance of the €24 million claim?
SCL is seeking damages, interest, and costs exceeding €24 million. The claim reflects SCL’s view of its alleged losses, although the tribunal may ultimately accept, modify, or reject these amounts.

How does the garnishee order issued in Malta fit into the broader dispute?
The precautionary garnishee order is a provisional legal measure designed to secure potential claims. It does not indicate liability but forms part of the wider litigation landscape.

Is Shoreline Mall plc’s daily operation affected by the dispute?
The company has stated that its operations remain fully functional and unaffected. Retail and commercial activities within the mall continue as normal.

What impact might the arbitration have on bondholders?
Bondholders are likely to monitor developments due to the upcoming bond maturity in 2026. However, the company has expressed confidence in meeting its obligations.

Could the parties reach a settlement before the arbitration concludes?
Yes. It is possible for parties in ICC arbitration to settle privately at any stage, provided both sides agree to the terms.

How long does ICC arbitration usually take?
Timelines vary widely. Complex commercial cases can take months or years, depending on procedural decisions, evidence volume, and the number of parties involved.

What could be the broader implications for Malta’s development sector?
The dispute highlights the importance of strong contractual frameworks in large projects. It also shows how Maltese companies may use international arbitration to address cross-border disagreements.