While primarily introduced to amend and update the Aircraft Registration Act and other ancillary-related laws, Act LII/2016 also promulgated particular amendments which go beyond aviation law into the realm of shipping. These recent changes are making Maltese law an ideal legal regime to govern and regulate disputes which may arise under certain types of shipping contract – namely, ship sale and purchase agreements, promise of sale agreements and charterparties.
At the start of 2017 Transport Malta, the authority responsible for the administration of the Malta flag, introduced new guidelines that allow more than 12 persons on board privately registered yachts. The new guidelines stem both from a recognition that there is a gap in the superyacht market and the administration's continued effort to remain at the forefront as a leading yachting flag.
Following the issuance of a provisional arrest warrant at the request of a physical bunker supplier, the Maltese court determined that it was not vested with jurisdiction in rem and accordingly lifted the arrest. This judgment sheds important light on the onus of proof with which an arresting creditor is burdened. The court held that it was insufficient merely to procure evidence of knowledge of the supply or proof of acceptance of the product from the supplier.
The term 'Maritime Malta' perfectly describes Malta – a country which has always had close connections with the sea and maritime sector. In addition to its strategic position, Malta has a stable and reliable legal regime and laws which give investors and their financiers a high degree of confidence. These achievements are a direct result of careful planning, a strong workforce that is prepared to deliver value for money and a 'can do' attitude.
The Maltese Civil Court recently held that underwriters need not make payments under an insurance policy when the loss or damages occurred due to a fault or negligence on the part of the assured and where the assured's behaviour constitutes a breach of policy. This judgment highlights the importance of ensuring that owners are familiar with the content of their insurance policies – in particular, with the responsibilities arising thereunder.
In a recent court-approved private sale, the Maltese Civil Court unprecedentedly permitted a mortgagee to purchase a vessel animo compensandi, meaning that rather than paying the purchase price from its own pocket, the amount was offset against the existing debt owed to the mortgagee. This judgment is significant, as it offers mortgagees more flexible enforcement options.
While the arrest of vessels is an exceptionally effective and powerful tool which genuine creditors have every right to use, it is paramount that the rule of law is observed and the law's high standards are maintained. Otherwise, there is a risk of increased lawlessness. The Maltese courts have addressed arresting parties' failure to follow the law in several cases, taking immediate action to correct any misinformation.
A Maltese civil court recently considered whether the penalty proceedings under Article 865 of the Code of Organisation and Civil Procedure can be brought against a vessel in rem. The court found that such proceedings can be commenced only against the person or persons that removed the vessel from Maltese waters in violation of the court order, not against a vessel in rem.
Over the last few years, the government has sought to promote the development of the aviation sector through the introduction of legal and administrative infrastructure modelled on the common law system and international conventions, including the adoption of the Cape Town Convention, the creation of a dynamic aircraft and mortgage register and the introduction of comprehensive laws on trust.
A recent case has highlighted a weakness in Maltese law in relation to the right to claim damages resulting from an illegal arrest. Despite finding that the arrest was illegal, the court stopped short of ordering reparations because it held that the defendants' failure to satisfy the criteria outlined in Article 742(D) Code of Organisation and Civil Procedure was not malicious, frivolous or vexatious and thus no damages could be sought.
The third annual Opportunities in Superyachts Conference was recently held in Malta. Over the past eight years Malta has enjoyed success within the superyacht sector, steadily increasing the size of its registered fleet and the number of yachts which benefit from the solutions offered by the jurisdiction. As such, the conference largely focused on what Malta offers owners and operators of private and commercial yachts.
In 2006 the Organisation and Civil Procedure Code was radically overhauled in relation to the provisions governing Maltese enforcement mechanisms, among other things. The changes to enforcement mechanisms included the introduction of court-approved private sales, under which mortgagees can source private buyers at the highest possible agreed price and, on court approval, sell vessels free and unencumbered.
The Civil Court recently upheld a request to have bunkers supplied to the defendant vessel excluded from a court-approved private sale on the basis that retention of title clauses existed, which governed the supply of the bunkers. The decision demonstrates that the inclusion of retention of title clauses can help to mitigate any possible losses in relation to bunkers.
With its centuries-old maritime tradition and as an EU member state, Malta has become the largest European maritime flag and also the seventh largest flag worldwide. Thanks to the unstinting efforts of the government and the maritime industry, Malta has developed into a reputable flag of choice and quality, which offers a wide array of international maritime services and fiscal incentives.
Following similar announcements recently made by France and Italy, the Maltese authorities published the Guidelines for the Value Added Tax Treatment of Short-Term Yacht Chartering. The guidelines address situations in which a short-term charter of a yacht with a crew (or on a bareboat charter basis) is entered into between the owner or operator and the charterer for a consideration.
Following an incident at sea, the master of a ship can make a so-called 'sea protest' in which he or she can declare the facts of the incident as known to him or her. Under Maltese law, a sea protest tends to hold significant probative weight in subsequent settlement negotiations or litigation, since it is often taken as being a correct statement of facts. However, failure to submit a sea protest properly can prove detrimental.
Following the recent increase in attacks on vessels travelling in the vicinity of Somalia, demand has grown for private maritime security companies that can provide professional armed guards on board a vessel to assist in anti-piracy measures. Malta has therefore recently taken steps to regulate the licensing of such companies to ensure that they meet appropriate standards and employ quality personnel of high integrity.
In a recent judgment the Maltese courts rejected a foreign liquidator's application to have a precautionary warrant of arrest lifted on the basis of the EU Insolvency Regulation. This judgment is to date the only judgment delivered by the Maltese courts in which the effects of the regulation on legal proceedings instituted in Malta to secure maritime claims in rem have been discussed.
A Maltese civil court recently further confirmed the rights of mortgagees granted by the law. Despite leaving a number of questions unanswered, this ruling should reassure international financiers of vessels registered under the Malta flag. Provided that the contracts into which they enter are in line with the provisions of the Merchant Shipping Act, financiers can rest assured that their rights will be fully upheld and safeguarded.
Legal history was made recently when a Maltese civil court granted an application requesting approval of a private sale. Court-approved private sales are intended to address the respective disadvantages of private sales and judicial sales by auction. Notwithstanding that this remedy has been on the statute book since 2006, this case represented its first test.