Maltese law Archives - Page 3 of 5 - Malta Maritime Law Association

Port notice 8/20 – Sulpher Content in Marine Fuels

May 28, 2020 Leave a Comment

The Ports and Yachting Directorate issued Port Notice Number 08/20 of 2020 entitled ‘Sulphur Content in Marine Fuels’, whereby attention was drawn to the provisions of the Quality of Fuels Regulations (S.L. 545.18). These regulations transposed the requirements of various EU directives regulating the quality of marine fuels that must be abided by all ships when calling in Maltese Ports and when traversing within Maltese internal and territorial waters.

The Port notice laid out a number of exemptions to the maximum sulphur (SOx) content to be used in marine fuels, noting that, amongst others, these limits were not applicable to fuels used by: war ships, ships in the process of securing the safety of a ship or saving lives at sea, ships that have been damaged where the owners or master have not acted with intent or recklessly, ships at berth for less than two hours using shore side electricity or ships using approved emission abatement methods. Exempted ships are to notify the Authority and REWS before entering Maltese territorial waters.

By means of the Port Notice, the Authority and REWS also notify its recipients that the trials of ship emission abatement methods may be approved. During these trials the use of marine fuels meeting the maximum SOx content shall not be mandatory subject to a number of conditions, including notifying the European Commission, the Authority and REWS in writing 6 months before the trial begins, having a maximum trial period of 18 months, having a proper waste management systems in place and conducting continuous environmental impact assessments in enclosed ports and harbours . Non-compliance with the conditions can result in enforcement action being taken against the vessel, including detention until such time as any non-compliance has been rectified or resolved.

The full port notice can accessed by clicking here.

by Dr Martina Farrugia, Fenech & Fenech Advocates

Source: Lexology

Port notice 7/20 – Dispute Resolution and Procedures under S.L 545.30

May 22, 2020 Leave a Comment

The Ports and Yachting Directorate within Transport Malta has issued Port Notice Number 07/20 entitled ‘Dispute resolution and procedures in connection with bunkering operations’ in order to remind its recipients about the provisions of the Dispute Resolution (Procedures) Regulation under subsidiary legislation 545.30 of the laws of Malta.

The port notice highlighted the availability of an authorised provider and a customer to bring forth a complaint to the Regulator in order to settle a dispute between them. This comes as a timely reminder in a period where local Courts have been closed due to Covid-19 measures.

In accordance with the Port Notice, the regulation is applicable to bunkering operations where a dispute has arisen between the bunkering fuel operator and provider and the receiving vessel. The procedure provides for an alternative dispute resolution mechanism (ADR) that is intended to be swift, economical, transparent and simple. Much of its attraction lies in the fact that disputes between authorised providers are to be settled within 4 months while disputes between an authorised provider and a consumer must be settled within 90 days, with extensions are only allowed in exceptional circumstances. Complaints and supporting documentation may be filed with the Regulator online and subject to certain conditions, the decisions taken by the Regulator are binding on the parties to the dispute, with administrative fines imposed for non-compliance. This procedure is however entirely voluntary and is an alternative dispute resolution mechanism which does not affect the parties’ rights to proceed to arbitration or to court should they prefer.

More details are available below.

SUBSIDIARY LEGISLATION 545.30 – DISPUTE RESOLUTION (PROCEDURES) REGULATION

THE INVOLVED PARTIES:

Taking a closer look at the Regulation, the involved parties are as follows:

The Authorised Provider:

The Dispute Resolution (Procedures) Regulation is not limited to bunkering operations and defines an authorised provider as any natural or legal person whether privately or publicly owned, who has a valid authorisation to operate, provide or carry out any activity or operation or to provide any service relating to energy and energy and water services.

The Consumer:

The consumer means any person who uses or requests a service or product the provision of which is regulated by the Act who is acting for purposes which are outside his trade, business, craft or profession. This definition raises questions as to who can qualify as a consumer, however the Port Notice explains that this shall be applicable ‘for bunker operations where a dispute arises between the bunkering fuel operator and provider and the receiving vessel’.

The Regulator:

The Regulator, established under the Regulator For Energy and Water Services Act, is composed of a Chairman and not less than four and not more than six members. Members are appointed by the Minister for a term of 5-7 years and may be re-appointed only once.

PROCEEDINGS BEFORE THE REGULATOR

The Regulation provides for two scenarios, dispute resolution where the parties are both authorised providers and dispute resolution where the parties are an authorised provider and a customer. The Regulation seeks to provide authorised providers and consumers with an alternative dispute resolution mechanism that is intended to be simple and transparent, offering binding decisions delivered in a swift and economical manner.

Where a dispute arises between authorised providers, The Regulator must initiate an investigation into the dispute as soon as possible and must seek to resolve the dispute within 4 months from the date when the dispute was notified to it. This time frame may be extended by a further two months where additional information is sought and the parties agree to such an extension.

Under the Regulation, the Regulator has the power to initiate an investigation of its own initiative. The jurisdiction of the Regulator is however, not automatic, and the Regulator may refuse to initiate an investigation where it is satisfied that other means of resolving the dispute in a timely manner are available to the parties. It may also refuse to initiate an investigation where the dispute is already subject to legal proceedings. Where a decision has been taken to refuse to initiate an investigation the Regulator must inform the parties as soon as possible. However, if within 4 months from such a decision, the dispute has not been resolved or the party seeking redress has not initiated legal proceedings, the Regulator may, at the request of a party, initiate an investigation.

Subject to possible appeal, the Regulator’s decision shall be binding on the parties and failure to abide by the decision shall be considered an infringement of the Regulation, subject to an administrative fine.

Under the Regulation, the Regulator shall also have jurisdiction in cases where a consumer alleges that an authorised provider has made an infringement of the Regulator for Energy and Water Services Act or subsidiary legislation made thereunder. When referring a dispute, a consumer must show on a prima facie basis that it has been affected by an act or omission of the authorised provider. In resolving the dispute, the Regulator may amongst other directives, order the authorised provider to effect reimbursement of payments received or to make compensation payments. Such payments may include the whole or part of the costs relating to the engagement of a lawyer or technical adviser engaged in submitting the dispute. Should a party fail to abide by an order given, the Regulator may impose an administrative fine of not more than €600 for each day of non-compliance.

Interestingly, the Regulator is not a compulsory dispute settlement mechanism for disputes arising between authorised providers and consumers. In fact the provisions of the Regulation make clear that ‘the provisions of this Regulation shall be without prejudice to the right of a consumer to have recourse to any other body in resolving any such dispute’.

As many other alternative dispute resolution mechanisms, the Regulator aims to be expeditious in its investigations, with the Regulation setting out a 90 day period within which disputes must be resolved. This time frame may only be extended in exceptional circumstances. The Regulator aims to increase efficiency by allowing complaints and supporting documentation to be submitted online. Official communication may also be made by electronic means or if applicable, by post.

When faced with a consumer complaint against an authorised provider, the Regulator may refuse to deal with complaint in the following circumstances:

Where consumer did not first attempt to contact the authorised provider in order to discuss his complaint and seek to resolve the matter with the authorised provider directly.
Where the dispute is frivolous or vexatious.
Where the dispute is being or has been considered by another dispute resolution entity or by a Court.
Where the Consumer did not submit the complaint to the Regulator within one year from the date upon which the consumer submitted the complaint to the authorised provider
Where dealing with the dispute would serious impair the effective operation of the Regulator.
Where the consumer has not submitted the complaint to the Regulator within 2 years from the date upon which the facts constituting the substance of the complaint have first arisen.

According to the Regulation, decisions are binding on the parties to the dispute. However, where the dispute is between an authorised provider and a consumer, it is only binding on consumer if has been informed of binding nature in advance and has specifically accepted this.

It is to be noted that though decisions are binding, they are not final and decisions taken by the Regulator are subject to appeal before the Administrative Review Tribunal within 20 days of the decision. Appeals may be filed on the following grounds:

(a) that a material error as to the facts has been made;

(b) that there was a material procedural error;

(d) that there was some material illegality, including unreasonableness or lack of proportionality

CONCLUSION:

The Regulation aims to provide for an alternative dispute resolution mechanism that seeks to increase consumer protection, in a timely and cost effective manner. In times where Courts are closed due to COVID-19 containment measures, authorised providers and/or consumers looking for quick settlement of a dispute may consider this mechanism as a valid alternative. Nonetheless, it is advised that disputes involving complex legal issues should continue to be referred before a Court so that one may make full use of all the legal mechanisms available therein.

The full port notice can be accessed here.

By Dr Martina Farrugia, Fenech & Fenech Advocates

Source: Lexology

Malta – Recent Changes to Laws Regulating Shipping Companies

May 13, 2020 Leave a Comment

The Merchant Shipping (Shipping organisations – Private Companies) Regulations (Subsidiary Legislation 234.42 of the Laws of Malta, “the Regulations”) have recently been amended by Legal Notice 31 of 2020 published in the Government Gazette on the 21st of February 2020.

Originally promulgated in 2004, the Regulations address the establishment and corporate workings of what is typically referred to as the Maltese shipping company.

Well known by players in the international shipping industry, shipping companies incorporated under the Regulations are used for the ownership, operation, and management of merchant vessels (both Malta-flagged or flagged elsewhere) as well as other maritime-related activities.

Legal Notice 31 of 2020 has now further improved the legislative and regulatory position in the area.

Continuation of foreign companies in Malta and vice-versa

Continuation (sometimes referred to as re-domiciliation) entails the transfer of a corporate entity’s ‘seat of incorporation’ or registration from one jurisdiction to another, thus ensuring the continuing corporate existence of the migrating entity.

Continuation seeks to ensure the continued existence of the same legal person. Accordingly, the company retains all the assets, rights, liabilities and obligations previously held or due by it.

Re-domiciliation into Malta is a useful and advantageous route for those existing shipping companies or shipping groups wishing to move their corporate seat to Malta. Existing shipping companies incorporated elsewhere may retain their corporate existence, instead of incurring winding up costs or leaving them idle whilst incurring costs to keep them in good standing, combined with the cost of incorporating a new company in Malta.

The continuation of a foreign shipping company into Malta may also be considered in connection with the simultaneous flagging of new tonnage or the re-flagging of existing tonnage under the Malta flag. Indeed, the whole re-domiciliation exercise, combined with the registration of the underlying owned or operated vessels in Malta, may well serve as a point of entry into the Maltese tonnage tax system.

Whilst re-domiciliation laws for non-shipping companies have been enacted in Malta a number of years ago, Legal Notice 31 of 2020 has brought about a novel faculty for Maltese shipping companies. Prior to 21st February 2020, a foreign shipping company wishing to re-domicile to Malta would first need to do so as a non-shipping company and subsequently convert to a shipping company post re-domiciliation.

This time consuming and burdensome procedure has now been removed through the introduction of Legal Notice 31 of 2020.

The Regulations now govern both the continuation in Malta of a foreign corporate entity as well as the continuation of a Maltese company in a country or jurisdiction outside Malta.

Re-domiciliation is only possible if the laws of the concerned jurisdiction (other than Malta) allow so.

Additionally, re-domiciliation may only take place when the foreign jurisdiction is considered as an “approved country or jurisdiction”. In this regard, the Registry relies on the Financial Action Task Force (FATF) country evaluations and treats as an approved jurisdiction a country that is not on the FATF blacklist.

Reporting & filing obligations for shipping companies

Starting from financial year 2020, shipping companies are requested to keep accounting records in accordance with the Regulations and will be subject to the exemptions and disclosure requirements as detailed in the said Regulations. Shipping companies will, therefore, need to prepare financial statements in accordance with the Regulations and the relevant applicable financial reporting standards such as GAPSME or IFRS.

Shipping companies will now submit audited financial statements to the Registrar of Companies. Submission must be made within 42 days from the end of the period for the laying before and approval by the company in general meeting of the annual accounts, that is 10 months after the end of the applicable and relevant accounting reference period.

Simply put, the large majority of shipping companies having their respective year-end in December must make their first filing of their audited accounts for financial year 2020 towards early December 2021.

A “small” shipping company is exempt from the general requirement to prepare a directors’ report. A “small” shipping company is one which, in terms of Regulation 64 of the amended Regulations, does not exceed two of the below thresholds:

A balance sheet total of € 6,000,000
Turnover of € 12,000,000
Not more than fifty employees

At a parent company level, exemptions from the preparation of consolidated accounts are also present. A parent shipping company incorporated under the Regulations can qualify as a “small company” in terms of the foregoing only if the group of which it is parent qualifies as a small group, meaning that, on a consolidation basis, it does not exceed the limits of two of the following criteria:

An aggregate balance sheet total of € 6,000,000 net or € 7,200,000 gross
An aggregate turnover of € 12,000,000 net or € 14,400,000 gross
An aggregate number of fifty employees

The above-described size exemption applicable to the preparation of consolidated accounts does not seem to apply in the event that the parent shipping company, or any of its undertakings to be consolidated, have their securities listed on a regulated market and in the event that none of the group companies are public interest entities.

Other

An additional Schedule – the Tenth Schedule – has been added to the Regulations. This Schedule lists a number of administrative penalties which may be imposed by the Registrar of Companies in the event of a number of defaults concerning failure by a shipping company and its officers to abide by their notification and filing obligations with respect to annual accounts as well as other matters concerning corporate governance.

by Ganado Advocates

Source: Lexology

Effect of COVID-19 on Maltese shipping industry

April 1, 2020 Leave a Comment

Europe is presently facing its most testing challenge since World War II. Faced with the threat of the COVID-19 pandemic, many EU states are increasingly adopting stringent measures to ensure that the spread is, to the extent possible, contained. Malta is no exception in this regard.

Conscious of the fact that Malta is a small island with one of the highest population densities per square kilometre in the world, local authorities have been busy implementing various staggered restrictive measures aimed at social distancing. These measures range from the closing of all schools to stopping all commercial flights in and out of the island.

As a result, most sectors of Malta’s economy have to some extent been affected by this epidemic. The local shipping industry has also been hit with several restrictions in recent weeks.

Restrictions on shipping

In early March 2020, all passenger vessels travelling from Italy were prohibited from entering Maltese ports. By virtue of Port Notice 05/20, the Authority for Transport informed the shipping community that it was imposing an immediate temporary ban on the entry of cruise liners and passenger vessels to Maltese ports. This restriction has now been extended. On 21 March 2020, the superintendent of public health extended the order of a travel ban on persons entering or leaving Malta to and from all countries, including by sea. However, an exception was made for all cargo ships, including container ships and ro-ro vessels carrying goods and essential commodities and tankers loaded with essential fuels.

Legal notices affecting court procedures

The measures taken to date have also affected the legal community. By means of Legal Notices 97 and 65 of 2020, the superintendent of public health has ordered the indefinite closure of:

any of the courts of justice, that is the superior courts and the inferior courts including appellate courts irrespective of their competence or jurisdiction, and includes also any tribunal established by law which operates from the building of the Courts of Justice, and any boards, commissions, committees or other entities which operate from the building of the Courts of Justice before which any proceedings are heard or procedures undertaken which are subject to legal, judicial or administrative time limits for filing any claims, defences or other acts.

The closure order came into effect on 16 March 2020 and will remain in force until it is revoked. Legal Notice 97 of 2020 also sets out the time frames in which an appeal of a decision by any other administrative tribunal, board or body may be filed in court once the latter reopens.

Notwithstanding the above, for now, the court registry is still accepting filings in situations where any delay could be seriously detrimental to a party. In such cases, the claimant must file an application to open the court registry and justify the urgency at hand. Within the context of shipping, this effectively means that the filing of warrants of arrest of ships, urgent injunctions prohibiting the transfer of ownership of vessels or the entry of any further mortgages, or any such similar measures, can continue to be filed. Moreover, the processes involved remain expeditious and provided that all documents are in hand, an arrest or a flag injunction can still be carried out in a matter of hours.

Further, to ensure that the closure of courts does not prejudice the rights of any persons, the superintendent of public health has also issued Legal Notices 61 and 84 of 2020 to suspend all prescriptive periods and other time bars. During the period that the courts remain closed, the running of any legal and judicial times and any other time limits have been suspended, including peremptory periods applicable to proceedings or other procedures before said courts. This suspension also applies to prescription in criminal and civil matters.

With regard to the legal and judicial time frames, which are not peremptory in nature, Maltese law already caters for the possibility of extending said limits. Article 106 of the Code of Organisation and Civil Procedure, Chapter 12 of the Laws of Malta, allows for such a request on good cause to be made, provided that it is filed within the time period sought to be extended. However, it is not permissible to request such an extension once the original time period has expired. Therefore, in the given circumstances, said article alone would not have provided the necessary safeguards, particularly since it is still unclear when the courts will be reopened. Accordingly, the new legal notices ensure that further protection is offered by legislating the immediate suspension of all such time limits. By doing so, the legislature has also ensured that the judiciary will hopefully not be flooded with extension requests the moment that the courts are reopened.

On the other hand, most peremptory periods cannot be suspended or extended on the request of interested parties. This includes those time bars which cannot normally be derogated from. By way of example, this would include the one-year period to bring a claim in respect of damaged or loss of goods under the Carriage of Goods by Sea Act and those maritime-related time bars found under the Commercial Code. These periods have therefore also all been suspended by means of the superintendent of public health’s legislative interventions.

The abovementioned suspension will last until seven days from when the superintendent repeals the court closure order. Thus, where a legal and judicial time frame or prescriptive period would have ordinarily expired in the period when the court is closed, the interested party now has seven days from the reopening of the courts to file the necessary acts or court papers.

Thus, any party involved in disputes or contentious matters which could result in a claim before the Maltese courts should bear the above in mind and also watch this space to see when the Maltese courts will reopen. In the meantime, with respect to urgent filings such as ship arrests and flag injunctions, it is very much business as usual in Malta.

By Adrian Attard at Fenech & Fenech Advocates

Source: ILO

Recent changes to procedures in relation to vessel arrests

January 22, 2020 Leave a Comment

Procedures for an arrest of vessel in Malta have been recently upgraded to enable, for the first time in Maltese legislative history, privately-engaged bailiffs to formally serve a warrant of arrest on ships that are in Maltese territorial seas. Act XXXI is the law that brought these changes into force effective as on the 18th of December 2019.

The new law changes the traditional rule that required that service of warrants of arrest must necessarily be done by a Court Official, typically the Court Marshall. The new law introduces flexibility into the procedure for service of an arrest in that it enables the creditor to engage a private bailiff (identified ‘a priori’ to the Court) to physically serve upon and notify the warrant of arrest to the ship’s Master and proceed to ‘seize’ the ship’s papers for them to be lodged in Court. Under the newly promulgated procedure, the privately engaged bailiff will work hand-inhand with Court officials thus ensuring that all steps remain subject to Court scrutiny.

The new procedure is specifically intended to facilitate the arrest of ships in difficult weather conditions, particularly where ships are miles away from Maltese shores, on anchorage, and sea conditions are bad. Now, more appropriately, rather than having Court personnel shipped out to vessels to enable notification of an arrest warrant, lawyers acting for creditors can tap the private sector to engage individuals that are apt to go out at sea in such weather conditions in place of the Court Marshall.

Contributed by Ganado Advocates, Source: Lexology

Click here to view Act XXXI

Member of the Comité Maritime International

Port notice 8/20 – Sulpher Content in Marine Fuels

Port notice 7/20 – Dispute Resolution and Procedures under S.L 545.30

Malta – Recent Changes to Laws Regulating Shipping Companies

Effect of COVID-19 on Maltese shipping industry

Recent changes to procedures in relation to vessel arrests

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