Litigation 2021

Last Updated December 04, 2020

Malta

Law and Practice

Authors



Ganado Advocates is Malta’s largest full-service business law firm and one of its most prestigious, with more than 90 lawyers and professionals. It has been a trusted legal adviser to some of the largest international and local corporations and financial institutions for the past 50 years, and is proud to have contributed to Malta’s achievements by underpinning clients’ continued success. The firm’s values, principles and passion for the law and clients’ business are reflected in its lawyers and other professionals, who are not only recognised leaders in their legal practice areas but also in the industry sectors which they service. The firm has assisted clients in domestic litigation and international commercial arbitrations across a number of practice areas, including construction contracts, admiralty and shipping claims, banking and financial services, blockchain and technology disputes, intellectual property, real estate and trusts.

The Maltese legal system has developed into a mixed legal system. In private law matters it is largely a jurisdiction based on the Civil Law tradition; however, decades of British rule exposed the Maltese legal system to English law in various aspects of public law and the law of civil and criminal procedure. Consequently, many branches of contemporary Maltese law are influenced by English law, ranging from public law to company law, fiscal law and maritime law.

The legal system primarily follows the adversarial model, but there is some flexibility for judges to intervene at various stages, although not typically in an inquisitorial manner as is the case in most continental European jurisdictions. The legal process is conducted in both written and oral form, and submissions may be made orally and in writing.

The Maltese courts are divided into the Superior and Inferior Courts. In view of the size of the country, the judicial system is not split between federal or state courts.

The Superior Courts consist of the Civil Court, the Court of Appeal and the Constitutional Court.

The Civil Courts of superior jurisdiction hear cases where the monetary value exceeds EUR15,000. The Superior Courts of criminal jurisdiction deal with criminal offences where punishment ranges from over six months up to life imprisonment.

The First Hall of the Civil Court is generally vested with competence to determine claims of a civil and commercial nature, and is divided into four sections:

  • the Family Section;
  • the Voluntary Jurisdiction Section;
  • the Commercial Section; and
  • General Jurisdiction.

The Court of Appeal hears and determines all appeals from judgments of the Civil Court and the Court of Magistrates (Gozo) in its superior jurisdiction, and for this purpose is presided over by three judges.

The Constitutional Court acts as a first instance court in two instances:

  • when any question arises as to membership of the House of Representatives; and
  • if the Electoral Commission suspends the electoral process.

It also has appellate jurisdiction in a variety of circumstances, as follows:

  • in the case of appeals from decisions of the Civil Court, First Hall, on a matter of human rights and fundamental freedoms;
  • in the case of appeals from decisions of any court of original jurisdiction affecting the interpretation of the Constitution, other than on a matter of human rights; and
  • in the case of appeals as to the validity of laws other than on a matter of human rights.

The Inferior Courts are the Court of Magistrates (Malta) and the Court of Magistrates (Gozo), and are vested with competence to hear and determine all monetary claims of an amount between EUR5,001 and EUR15,000. All monetary claims of an amount not exceeding EUR5,000 are heard and determined by the Small Claims Tribunal.

The Court of Appeal also hears and determines appeals from the Inferior Courts; the Court of Appeal in its inferior jurisdiction is presided over by one judge for this purpose.

The laws of Malta also establish the following specialised tribunals to hear and determine commercial disputes of a special commercial nature:

  • the Financial Services Tribunal, which is set up by the Malta Financial Services Authority Act (Chapter 300 of the Laws of Malta) and is vested with the competence to determine disputes in relation to decisions made by the Malta Financial Services Authority;
  • the Financial Services Arbiter, which is established under the Arbiter for Financial Services Arbiter Act (Chapter 555) and hears complaints lodged by aggrieved investors against licensed financial services providers;
  • the Competition and Consumer Appeals Tribunal, which is set up by the Malta Competition and Consumer Affairs Authority Act and determines appeals from decisions, orders or measures of the Director General (Competition) and the Director General (Consumer Affairs) as provided in the Competition Act, the Consumer Affairs Act and any regulations made thereunder;
  • the Industrial Tribunal, which is set up by the Employment and Industrial Relations Act and is vested with the competence to determine certain cases relating to a set of employment relations issues and all cases of alleged unfair dismissals from employment; and
  • the Administrative Review Tribunal, which is established by Chapter 490 of the laws of Malta for the purpose of reviewing administrative acts by the public administration (ie, the government of Malta including its Ministries and departments, local authorities and any body corporate established by law of any order, licence, permit, warrant, authorisation, concession, decision or refusal to any demand of a member of the public). Any party to the proceedings before the Tribunal who feels aggrieved by a decision of said Tribunal may appeal to the Court of Appeal sitting in either its superior or its inferior jurisdiction. Administrative acts that do not fall in the competence of the Administrative Review Tribunal are reviewed by the First Hall of the Civil Court, composed of one judge.​

All proceedings before the above-mentioned courts and tribunals are held in public, and all documents and records of the proceedings are accessible to the public. As an exception to this general rule, the relevant court or tribunal may order certain documents filed in the records of proceedings to be sealed, particularly where such documents contain confidential information or may otherwise be prejudicial to the parties to those proceedings.

No person may exercise the profession of advocate in the Courts of Justice in Malta without the authority of the President of Malta, granted by warrant under the Public Seal of Malta. In order to obtain such a warrant, an individual must:

  • be of good conduct and morals;
  • be a citizen of Malta or of a Member State of the European Union, or be otherwise permitted to work in Malta under any law;
  • have obtained the academic degree of Doctor of Law (LLD) from the University of Malta, or such other qualification at masters level as the Minister may from time to time prescribe, after consultation with the Senate of the University of Malta, or a comparable degree from such other competent authority in accordance with the principles of the mutual recognition of qualifications, after having read law in Malta or in a Member State of the European Union;
  • have regularly attended the office of a practising advocate of the Bar of Malta and at the sittings of the Superior Courts;
  • have full knowledge of the Maltese language, being the language of the courts; and
  • have been duly examined and approved by two judges.

Advocates so admitted to the Maltese Bar have rights of audience before all courts.

Legal procurators in possession of a warrant issued by the President of the Republic and under the Public Seal of Malta have rights of audience before the Courts of Magistrates (inferior jurisdiction) and special tribunals and boards.

Foreign legal professionals from other Member States of the European Union wishing to practise in Malta may register with the Ministry for Justice, Equality and Governance, but will need to apply for a local warrant in order to practise in the Courts of Justice in Malta. To be eligible, the applicant should have practised law in Malta for at least three years, including experience of Maltese law, and must satisfy the remaining requirements.

In principle, third-party funding of claims governed by Maltese law is permitted, unless the funding is characterised as champerty (stipulations quotae litis are deemed void). Regulatory clearance may be required if funding is made on an ongoing basis. There are operators based in Malta that do engage in third-party litigation funding, but we are unaware of such operators funding claims filed in Malta.

Third-party litigation funding is possible, although not expressly regulated. Lawyers are prohibited from entering into funding arrangements with their clients or third parties.

There is no specific legislation that regulates third-party litigation funding models as yet.

Subject to the above, any lawsuit is available for third-party funding.

Subject to the above, both plaintiff and defendant can use third-party funding.

Subject to the above, there are no minimum and maximum amounts.

Subject to the above, there is no restriction on the costs a third-party funder may consider funding; such costs may include the court registry costs of filing judicial documents, legal representation fees, and other court fees.

Lawyers are ethically prohibited from entering into contingency fee and other conditional fee arrangements.

Third-party funding can be sought at any point in the litigious process.

There are no rules that impose certain pre-action conduct that must be undertaken by parties prior to initiating litigation. However, it is customary for informal legal letters to be sent, calling upon the respondent to meet their obligations, and even more formal judicial letters threatening the taking of legal steps, including precautionary ones. The latter type of letters are similar to pre-action letters, are formally filed through the Court registry and served on potential defendants through court bailiffs or registered court mail, and also serve to interrupt the running of prescriptive periods/applicable statutes of limitation.

Time limits for civil suits vary, and are usually determined by the nature and facts of each individual case and the nature of the claim. The main prescriptive periods are as follows:

  • five years for contractual claims;
  • two years for tort claims; and
  • two months in the case of spoliation of movables or immovables, whether clandestinely or by violence.

Unless otherwise provided by a specific law, time limits start to run on the day the relevant action can be exercised, regardless of the state or condition of the person to whom the action is competent.

In addition to the general prescription periods highlighted above, the law establishes shorter time periods for specific classes of actions, including the recovery of funds arising out of specific types of contract.

In the case of civil or commercial disputes against a defendant domiciled in a Member State of the European Union, the Courts of Justice in Malta would apply the provisions of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgements in civil and commercial matters (recast).

In the case of disputes where the defendant is not domiciled in a European Union Member State, national rules of jurisdiction are applied by Maltese Courts. In this regard, the Code of Organisation and Civil Procedure provides that the civil courts of Malta shall have jurisdiction to try and determine all actions concerning the following persons:

  • citizens of Malta, provided they have not fixed their domicile elsewhere;
  • any person as long as he or she is either domiciled, resident or present in Malta;
  • any person, in matters relating to property situated or existing in Malta;
  • any person who has contracted any obligation in Malta, but only in regard to actions touching such obligation and provided such person is present in Malta;
  • any person who, having contracted an obligation in some other country, has nevertheless agreed to carry out such obligation in Malta, or who has contracted any obligation that must necessarily be carried into effect in Malta, provided in either case such person is present in Malta;
  • any person, in regard to any obligation contracted in favour of a citizen or resident of Malta or of a body having a distinct legal personality or association of persons incorporated or operating in Malta, if the judgment can be enforced in Malta; and
  • any person who – expressly or tacitly – voluntarily submits or has agreed to submit to the jurisdiction of the court.

In the Superior Courts, proceedings are usually instituted by sworn application, unless the law in specific instances requires merely an application. In the Inferior Courts, proceedings are instituted by application.

A sworn application must be confirmed on oath before the Court Registrar or Commissioner for Oaths, and must contain:

  • a clear and explicit statement of the subject of the cause and a declaration of the facts;
  • the cause of the claim;
  • the claim/s;
  • a notice to the recipient that a sworn reply must be filed within 20 days of service of the sworn application, in lieu of which the Court may proceed to adjudicate the matter according to law; and
  • an exhaustive list of witnesses intended to be produced in evidence.

The ordinary procedure before appellate courts is by application, which must contain a plea that the judgment appealed against or any part thereof be reversed, annulled or varied. In the case of a request for reversal, the application must contain a reference to the claim and to the judgment appealed against, together with detailed reasons on which the appeal is entered, and a request that the claim be allowed or dismissed. In the case of a request for variation, the application must also distinctly state the heads of the judgment complained of together with detailed reasons for which the appeal is entered and, in conclusion, shall specifically state the manner in which it is desired that the judgment be varied under each head.

The application before the Inferior Courts shall take the form of a notice signed by the Registrar, containing the names of the plaintiff and the defendant, the demand, and the date and hour when the defendant is to appear.

Appeals from Inferior Courts may be made by application of appeal, whether for reversal or variation.

All written pleadings, regardless of the court, must contain the following:

  • an indication of the court and section;
  • the full name of both parties and, if applicable, the capacity in which they appear;
  • the description of the pleading; and
  • the number of any relevant action previously brought.

Parties wishing to correct any act instituting a lawsuit may request court authorisation to do so, by means of an application filed in the acts of the proceedings. Such authorisation may be made at any stage of the proceedings until delivery of judgment.

The application instituting proceedings, once filed, will need to be notified to the respondent through the Court registry. Service is effected by delivery of a copy of the pleading on the respondent by an officer of the court. In the case of corporate entities, a copy of the act may be left at its registered office or with the director, representative or company secretary.

Multiple service attempts can be made without court authorisation at different times of the day, and after judicial hours with the authorisation of the court. Once service is validly effected, the officer charged with the service shall file a separate certificate of service for each attempt in the acts of the proceedings. If multiple service attempts are not successful, a request can also be made to the court for authorisation for service by affixation of the pleading in the relevant town or district and on the door of the respondent’s residence, and by publication of a summary of the pleading in the Government Gazette and in one or more daily newspapers.

Respondents can also be sued if they are established or physically located outside the jurisdiction. If they are located in a Member State of the European Union, service of judicial documents may take place in accordance with the procedure laid down in Regulation (EU) No 1393/2007 on the service in the member states of judicial and extrajudicial documents in civil or commercial matters.

If they are located in a country that is a Contracting State to the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, then service may take place in accordance with the procedure laid out therein.

If they are located in any other third country that is not a party to those instruments, then the applicant may file a request to the Court to order the appointment of curators to represent the interests of the respondents. The curators are served with the application and are responsible for filing a reply and representing the respondent in the proceedings.

The failure of a defendant to respond will result in him or her being contumacious, provided they have been validly served with the document instituting the proceedings. In this instance, the case may be determined on the acts available after hearing such evidence as the court may consider necessary, notwithstanding the defendant’s default of appearance.

Contumacy is deemed at law to be a contestation, not an admission of a lawsuit.

The Collective Proceedings Act (Cap. 520 of the Laws of Malta) allows group actions as well as representative actions to be brought in the context of alleged breaches of the Competition Act (Cap. 379 of the Laws of Malta), the Consumer Affairs Act (Cap. 378 of the Laws of Malta) and the Product Safety Act (Cap. 427 of the Laws of Malta). Proceedings may be conducted by a representative plaintiff on behalf of multiple claimants. Such collective actions may only be instituted to seek injunctive relief, monetary relief, the rectification of consequences of an infringement, or compensation for harm. The plaintiffs must be specifically identified, and therefore a class description would need to be specified in the application. Thus, all collective actions are opt-in, including for injunctive relief.

Collective actions are instituted by means of a sworn application before the First Hall of the Civil Court, requesting the collective proceedings procedure and providing certain preliminary information regarding the class and the claim. During the pre-trial hearing, the court will ascertain that the following cumulative requirements are satisfied:

  • The proceedings are appropriate for collective proceedings – in other words:
    1. the claims are brought on behalf of an identified class of two or more persons;
    2. the claims raise common issues; and
    3. collective proceedings are the most appropriate means for the fair and efficient resolution of the common issues.
  • The court approves the plaintiff to act as class representative – in other words:
    1. they would fairly and adequately act in the interests of the class members; and
    2. they do not have a material conflict of interest in relation to the common issues for the class members.
  • The court is satisfied the claims fall within the subject matter of the Collective Proceedings Act.

There is no requirement to provide clients with a cost estimate of the potential litigation at the outset.

Interim applications are available before the hearing of the claim. In particular, precautionary warrants may be sought by creditors or holders of a real right to secure future payment in the absence of an executive title.

An application may be filed for any one of the following precautionary acts, provided the conditions for their issue are satisfied and the court is satisfied, on a prima facie basis, that the act is necessary to protect the rights claimed:

  • warrant of description;
  • warrant of seizure of a movable object;
  • warrant of seizure of a commercial going concern;
  • garnishee order;
  • warrant of impediment of departure;
  • warrant of arrest of sea vessels;
  • warrant of arrest of aircraft; or
  • warrant of prohibitory injunction.

Once the act is requested, the applicant is bound to bring an action on the merits of the claim within the time limit specified by law, which is typically 20 calendar days.

When a claim is solely for the recovery of a debt that does not exceed EUR25,000 and is certain, liquid and due, the creditor may file a judicial letter instead of a lawsuit, accompanied by a confirmation on oath stating clearly the cause of the claim, the reasons it should be upheld, and the facts. The letter shall warn the debtor that if he does not rebut the claim within 30 days from service by a note in the record of that judicial letter, then the official letter shall constitute an executive title, without the need for a trial.

Maltese procedural law also provides for special summary proceedings in certain instances, particularly when a claim is solely for the recovery of a debt that is certain, liquid and due (which falls within the jurisdiction of the Superior Courts), or for the eviction of a person from an urban or rural tenement.

In these cases the claimant may request, in its sworn application, that the court proceed to give judgment without proceeding to trial. The sworn application must contain a sworn declaration that the claimant believes there is no defence to the claim. If, at the hearing, the defendant fails to satisfy the court that he has a prima facie defence to the action on the merits, the court shall proceed to judgment in summary proceedings.

Parties may ask for a case to be dismissed before a full trial, most commonly in the following instances:

  • where there is a lack of juridical interest of either the plaintiff or the defendant;
  • where they allege a cause of nullity in the procedure followed by the claimant;
  • where they allege a lack of jurisdiction; or
  • where the action is barred by a particular prescriptive period established at law.

In these instances, the court will limit its analysis to the issues raised in the dispositive motion, without delving into a full trial. These motions typically take the form of preliminary pleas.

Any interested party who shows to the satisfaction of the court that they have an interest in a pending suit may file an application to be admitted as a party to the suit in statu et terminis. An application to intervene may be made at any stage of the proceedings, whether in first or second instance, provided that such application does not suspend the actual proceedings between the parties to the suit.

Alternatively, anyone with an interest in the proceedings may be joined by application of either party or by court decree, when his absence would render the judgment less effective. While intervention in statu et terminis is voluntary, the intervenor does not become a full party to the suit, with the result that the judgment will not be binding over them; joinder, on the other hand, is involuntary, but the eventual judgment will be binding over them.

There is no specific procedure regulating whether a defendant can apply for an order that the plaintiff/claimant must pay a sum of money as security for the defendant’s costs, but it is possible to request such a court order, particularly if the claimant’s ability to meet costs is called into question. There is also specific provision for claimants to provide security for costs in intellectual property cases, and in cases for the enforcement of mortgages on ships and aircraft.

Separately, in the case of an appeal of a judgment, security for costs must be produced and deposited in court by the appellant before the trial date for the hearing of the appeal.

Costs of interim applications are typically reserved at the interim stage, saving the right of the court to reapportion liability for costs based on the outcome at final judgment.

There is no timeframe within which an application must be dealt with or proceedings must be appointed for trial. Generally, causes are appointed for a first hearing within two months of the application being made.

In cases of urgency, the court may abridge any legal time and may even appoint the case for a trial before the close of preliminary written procedures.

Applications for precautionary warrants, especially ex parteapplications for such relief, are typically dealt with very expeditiously, and interim court decrees are obtained in a matter of hours.

There is no full and frank disclosure obligation on the parties, and the possibility of discovery is limited.

Discovery from third parties is not possible, but third parties can be summoned through subpoenas where they have been indicated as witnesses in the initial legal instruments (ie, the sworn application or the sworn defence).

As stated above, there is no system of discovery in Malta, and no rules regulating which documents parties must disclose.

Evidence is generally limited to that brought by the parties to corroborate their claim or defence as applicable, and must be relevant to the issue between the parties. A court may disallow evidence if it considers it irrelevant or superfluous to the cause, or if it considers it is not the best evidence that can be brought on the issue.

There are some specific rules of disclosure – for example, in the enforcement of IP rights whereby the court has wide powers to order the disclosure (subject to confidentiality) and conservation of evidence in the hands of the defendant or third parties (Enforcement of Intellectual Property Rights (Regulation) Act (Chapter 488, Laws of Malta)).

A separate action does exist to demand the production of particular documents: the actio ad exhibendum. In practice, this is a limited remedy sought by the plaintiff solely to obtain the production of documents in the following instances:

  • if such documents are the property of the party demanding the production thereof;
  • if such documents belong in common to the party demanding their production and to the party against whom the demand is made;
  • if the party demanding the production of the documents, although he or she is not the owner or a co-owner thereof, shows that he or she has an interest in such documents being produced by the other party to the suit;
  • if the person possessing the documents, not being a party to the suit, does not declare on oath that, independently of any favour for either side, he or she has special reasons not to produce the documents; and
  • if the documents are public acts, or acts intended to constitute evidence in the interest of the public in general.

In all cases, the party demanding the production of the document must prove that the document is in the possession of the person from whom the production is demanded.

Advice and communications between clients and their lawyers in professional confidence in reference to the cause are privileged and cannot be disclosed in court. There is no distinction between external and in-house counsel, although as far as is known the distinction has not yet been tested in court.

Certain specified documents are privileged, and their production during proceedings cannot be forced. For instance, documents that would damage the security, defence or international relations of Malta, or that would divulge information or matters communicated in confidence by or on behalf of a foreign government, authority or international organisation, would be considered privileged documents. Specific documents relating to the cabinet’s government are also considered privileged documents.

Moreover, the courts have discretion to restrict the public nature of cases or of pieces of evidence in the interests of justice (such as court disclosure of banking documents or other confidential documents).

There have been court decrees protecting documents containing trade secrets or confidential information, but the circumstances will vary depending on case-specific facts.

The injunctive relief available in terms of Maltese civil procedural law are the acts referred to in 4.1 Interim Applications/Motions, which are described in more detail hereunder:

  • Warrant of Description – this warrant secures a right over movables. The applicant invariably has an interest in a particular movable being retained and preserved at a particular location and in a particular condition.
  • Warrant of Seizure of Movables or Immovables – this warrant orders the seizure of certain specified items to an official consignee, either as a precautionary measure, or on the basis of an executive title. In the latter case, the seized items may subsequently be sold by judicial sale by auction.
  • Warrant of Seizure of a Commercial Going Concern – this warrant preserves the totality of the assets of the going concern in order to secure a debt or claim that could be wholly or partly frustrated by its sale.
  • Garnishee Order – by this warrant, creditors attach in the hands of a third party garnishee the monies or movable property due or belonging to the debtor. The third party garnishee must subsequently lodge such items in court as security for the creditor’s claim.
  • Warrant of Arrest of a Sea Vessel – this warrant secures a debt or claim that could be frustrated by the departure of a ship from the Maltese territory, and secures the vessel in the hands of the relevant authority, being the Authority for Transport in Malta.
  • Warrant of Arrest of Aircraft – this warrant applies to both aircraft and their engines.
  • Warrant of Prohibitory Injunction – this warrant restrains an individual from doing anything potentially prejudicial to the applicant. It must be necessary to preserve the applicant’s rights, and must prima facie appear to possess those rights.

There are also a number of injunctive measures provided for under specific laws. In the realm of intellectual property law, for instance, the court has wide powers to order the conservation of evidence in the hands of the defendant or third parties, and even to issue a "cease and desist" order, restraining the performance of an act likely to infringe a party’s intellectual property.

With the exception of the warrant of prohibitory injunction, all the orders mentioned above are granted on a purely ex parte application confirmed on oath without the need for a trial date.

In urgent circumstances, interim injunctions can be issued provisionally and even on the same day of the request, exceptionally even out-of-hours, which is very common in the case of arrests of sea vessels.

Please see 6.1 Circumstances of Injunctive Relief.

Ex parte injunctive relief is in fact obtained without the respondent being able to make submissions, although the application is served on the defendant.

The corresponding protection for the defendant is the possibility to request the removal of injunctive relief on very limited grounds or exceptionally to seek counter-security. This system ensures the effectiveness of injunctive relief, including the element of surprise, but also creates a balance in case of abusive recourse to injunctive relief. Admittedly, however, court judgments have unduly limited the availability of the counter-security or the application for the removal of injunctive relief by interpreting very strictly the instances where such remedies may be available.

Claimants will be responsible for damages suffered by the respondent if it is shown that:

  • the proceedings were frivolous or vexatious;
  • the claimant sought more security than he or she was reasonably entitled to; or
  • the claimant fails to file an action on the merits within the set timeframe established by law following the grant of injunctive relief.

In some instances, claimants may need to provide security for such damages.

Worldwide asset relief is not possible.

Injunctive relief against third parties is not possible.

Respondents who do not comply with such injunctive relief will be guilty of contempt of court, and will be liable to imprisonment of up to one month or to a fine ranging from EUR232.94 to EUR2,329.37, or to both imprisonment and fine.

Judicial proceedings are instituted by filing a sworn application in court, unless otherwise specified by law, containing a statement of facts and the relief requested, to which a list of documents and witnesses is attached. The court will then issue a decree scheduling a first case management hearing and ordering service on the respondents, who will then have 20 days from the day of service in which to file a sworn reply.

Assuming no preliminary pleas are raised, the trial then starts by the claimant initiating the evidentiary process, including the presentation of affidavits and other document evidence. The respondent would then typically cross-examine the witnesses who submitted the affidavits, and produce its own witnesses and documentary evidence.

This is followed by the exchange of legal submissions in writing, followed by a final round of oral rebuttals.

There is usually one hearing at the beginning of a trial for case management purposes.

Furthermore, it is possible under Maltese law to obtain interim injunctions/warrants in support of any pending judicial proceedings. The injunctions are intended to secure the claimant’s claim on the merits. Applications for interim measures are usually considered by a Maltese court within 24-48 hours of filings and, as already explained in 6.3 Availability of Injunctive Relief on an Ex Parte Basis, may be issued on an ex parte basis in certain circumstances without the need for trial or hearing. If such an application is upheld, the order is served on third parties within 24 hours. In these cases, however, the judicial proceedings in support of which the injunctive relief was requested must be filed within 20 days of the date on which the request for injunctive relief was upheld.

The use of juries is limited to criminal trials in the Criminal Court, whereby the offence in question falls outside the original competence of the Court of Magistrates. There are no jury trials in civil cases.

The rules that govern the admission of evidence at trial are as follows:

  • all evidence must be relevant to the matter at issue between the parties;
  • the court requires the best evidence that the parties are able to produce;
  • any procedural objection to evidence must be recorded in the proceedings; and
  • as a general rule of thumb, the burden of proving a fact shall, in all cases, rest on the party alleging it.

Expert testimony is permitted at trial. If an expert witness is introduced ex parte, their opinion shall only be admissible if, in the opinion of the court, they are suitably qualified in the relevant matter. The court may nominate its own experts, and their opinions would also amount to evidence.

A distinction must be maintained between ex parte witnesses and referees, in that the latter are representatives of the court and are bound not only by the rules of procedure but also to report to the court itself.

Trials are generally conducted in public. However, it is within the discretion of the court to order that the trial be heard with closed doors on the grounds of decency or good morals. The request for a trial to be heard with closed doors may, upon good reason being shown, also be made by both parties together.

Judgments are delivered in open court, with a signed transcript of the judgment itself being deposited in the records of the case.

Malta has adopted the adversarial model with overtones of the inquistorial method, in particular during proceedings of a criminal nature. Accordingly, the judge is generally passive, intervening on an as required basis to provide direction, seek clarifications from the parties or witnesses, or in the event issue an order, directive or interim decision by judicial decree.

In this respect, in order to ensure full compliance with all matters of procedure, or to seek more detailed information, or to expedite or facilitate proceedings, or to avoid the unnecessary appearance of parties or witnesses, the court may give all such orders and directives it may think fit in chambers. Such orders include a decree allowing or disallowing a request for an adjournment, a decree allowing or disallowing an objection to the competency of a witness, a decree allowing or disallowing a request to put questions to a witness, a decree allowing or disallowing a request for the production of documents, the appointment of a referee, a decree allowing or disallowing a request for the connection of actions, a decree allowing or disallowing the expunging of a document from the records of the case, a decree allowing or disallowing a request for the revocation or amendment of a decree, a decree disallowing a request for special leave to appeal, and a decree disallowing a request for stay of proceedings. An appeal from such orders or directives, where admissible, may be entered only after the definitive judgment and together with an appeal from such judgment, and such orders or directives may not be challenged before the definitive judgment is delivered.

Other orders or directives are to be read out in court rather than given in chambers, and an appeal therefrom may be entered before the definitive judgment. These include, inter alia, a decree refusing the appointment of additional referees, a decree transferring an action for trial to another court, a decree refusing the joinder of a third party, a decree disallowing a request for urgency, and a decree ordering the stay of proceedings, amongst others.

Once the application is filed in court, the respondent has 20 days within which to file a reply, whether sworn or otherwise. The same time limit will apply for the filing of any counterclaim. Following the trial proceedings as explained above, the court will generally deliver judgment within four to six months. This process from start to finish is likely to take two to three years, but this may be delayed taking into consideration the current COVID-19 pandemic.

Court approval is not required in order to settle a lawsuit.

The terms of settlement agreements do not need to be disclosed, and therefore settlements of lawsuits can remain entirely confidential.

Settlement agreements would be enforced in the same way as any other contract. They will invariably contain their own dispute resolution mechanism and method of enforcement, including by resort to court or arbitration.

Adherence, enforcement and the setting aside of a settlement agreement would take place in the same way as for any other contract, and are thus regulated by the law of contracts.

The damages available to the successful litigant are:

  • the actual loss which the conduct complained of caused to the injured party;
  • the expenses which said injured party was obliged to incur as a result of the damage;
  • the loss of actual wages or other earnings; and
  • the loss of future earnings arising from permanent incapacity, whether total or impartial.

Apart from compensatory or monetary relief, declaratory and injunctive awards are also possible at the full trial stage. With some notable exceptions, damages in Malta are restorative in nature and therefore generally no punitive damages are granted.

In terms of contractual damages, the successful litigant is only entitled to damages that could have been foreseen at the time of the agreement. If said contract provides for damages, the court may award a greater or lesser sum in terms of damages.

The sum awarded by the court is assessed depending on:

  • the circumstances of the case;
  • the nature and degree of the incapacity caused; and
  • the condition of the injured party.

The damages awarded can be largely divided into two categories: damnum emergens and lucrum cessans. It is relatively easy to prove damnum emergens – this is done by bringing proof of the damage actually suffered and the expenses incurred as a result. With respect to lucrum cessans, there is no capping on the damages available.

The formula which is largely followed by the Maltese courts in calculating lucrum cessans is: yearly projected income multiplied by a multiplier based on the projected working life expectancy and further multiplied by the certified percentage disability. A cash deduction (using largely discounted cash flow) is then applied as a deduction.

Under Maltese law, damages should be purely compensatory. Historically, moral damages have not been awardable in civil and commercial cases (not including human rights and constitutional cases) but, in light of recent legislative amendments, courts now have the option to award damages for both moral and psychological harm.

Generally, judgments given on civil pecuniary claims also include the award of interest at the rate of 8% simple interest per annum. In commercial matters, this runs from the date the debt was due, and therefore before the judgment is entered. However, interest can only be imposed from the date of judgment where damages are considered not to be liquid at the time the claim was brought and quantified during and pursuant to a court judgment. Commercial debts are also subject to default interest under Directive 2011/7/EU on combating late payment in commercial transactions (recast) (Late Payment Directive), as applied through the Maltese Commercial Code.

The court can give various orders for enforcement, including:

  • the issuance of warrants/executive acts, including some of the warrants mentioned in 4.1 Interim Applications/Motions. It is also possible to issue an executive warrant of seizure of an immovable property; and
  • judicial sale by auction to recover the payment due, costs of the procedure, and interest.

In cases where a judgment delivered by the courts of another EU Member State is being enforced in Malta, the procedure is regulated by Regulation (EU) No 1215/2012. Recognition is automatic, and enforcement can take place immediately with the filing of any executive measures. Enforcement measures will be served upon the judgment debtor, who will then have the opportunity to file an application before the First Hall of the Civil Court, raising any of the grounds of objection to the enforcement of the foreign judgment contained in the aforementioned Regulation. Any eventual judgment will be subject to appeal.

In cases where a judgment has been delivered by a court outside of the European Union, on the basis of an exclusive choice of court agreement by the courts of a Contracting State to the Hague Convention on Choice of Court Agreements, then that judgment can be recognised and enforced in Malta pursuant to the procedure laid down in that Hague Convention. This provides for recognition and enforcement to take place in accordance with local procedural law.

In cases where a judgment delivered by the courts of a non-EU Member State (third country) is being enforced in Malta, the procedure is regulated by the Code of Organisation and Civil Procedure. A foreign judgment that is final and binding, and has been delivered by a competent court outside of Malta, will first need to be registered, which will require the filing of an application before the First Hall of the Civil Court. Proceedings involve the judgment debtor, who will have the opportunity to raise any of the grounds for objection to the registration of the foreign judgment contained in the aforementioned code, being far wider than those contained in the EU Regulation. Once registered and recognised, the foreign judgment may then be executed locally in the same manner as other local judgments.

Limitedly, money judgments delivered by the Supreme Courts of the United Kingdom may be registered in Malta in accordance with the provisions of the British Judgments (Reciprocal Enforcement) Act (Chapter 52 of the Laws of Malta). The procedure is very similar to that of the Code of Organisation and Civil Procedure.

There is only one level of appeal in Malta. There is no third level review in cassation or at a supreme court.

There is a right of appeal to the Court of Appeal against judgments delivered by courts of first instance. However, judgments delivered by the Court of Appeal are not appealable.

Appeals from the First Hall, Civil Court, and from the Court of Magistrates in its superior jurisdiction are heard by the Court of Appeal in its superior jurisdiction.

Appeals from specially constituted tribunals, such as the Financial Services Tribunal, shall lie before the Court of Appeal in its inferior jurisdiction presided over by one judge. Appeals from decisions of the Court of Magistrates (Malta) and the Court of Magistrates (Gozo) are also heard by the Court of Appeal in its inferior jurisdiction.

It is also possible to appeal against certain interim or interlocutory decrees, such as a decree allowing a request for urgency or the appointment of a referee. However, such appeal may be lodged only after the delivery of a definitive judgment and only if an appeal against the definitive judgment itself is entered.

Other decrees that necessitate a final decision before the delivery of a definitive judgment (eg, a decree refusing the joinder of a third party) may be appealed against by means of an application within six days of the date on which the decree is read out in open court.

Certain other interlocutory decrees may be appealed against only by special leave of the court, to be requested by means of an application filed within ten days of the day on which the decree is read out in court.

An appeal may be lodged by means of an application, which shall contain the part of the judgment the appellant may wish to be reversed, varied or annulled. The appeal must also be substantiated with detailed reasons in the application. If the appeal is seeking variation, the application must state the manner in which the appellant wishes the judgment to be varied.

There is no appeal from judgments given upon the admission of a claim, or if the party in question has renounced the right of appeal. Furthermore, there can be no appeal against judgments of the Court of Magistrates (Malta) or the Court of Magistrates (Gozo) in its inferior jurisdiction as a court of first instance where the amount of the claim does not exceed EUR465.87, and where the matter does not involve either a point of law determined in judgment or a claim for eviction from immovable property.

Appeals may also be entered into by interested third parties.

Furthermore, if several issues are decided by more than one judgment, then appeals may only be made upon the final judgment, unless the potential appellant obtains leave from the court to appeal at various instances prior to delivery of the final judgment.

An appeal can be entered by any party against either all other parties or any one of them. As mentioned above, an appeal is lodged by means of an application that must be filed in the registry of the Court of Appeal within 20 days of the date of the judgment. If an appeal is not entered into against the whole judgment, then the application must specify the heads of judgment being appealed. This time period cannot be extended.

As a general rule of thumb, security for costs must be deposited in court no later than two days before the date set for the hearing of the appeal.

The appeal application is served on all parties, but only the parties against whom the appeal is directed must file their answer within 20 days, specifying why the appeal should be dismissed. The written pleadings in appeal are deemed closed by the submission of an answer to the application, but if it deems so expedient, the court may make an order to allow the filing of any additional pleas.

The appeal application or reply must contain all the documents in support of said application or reply. No new evidence is admitted on appeal, except in specific circumstances.

An appeal can be filed on either points of law or points of fact. In fact, the Court of Appeal may deal with both the principles behind and the merits of a judgment. To be successful, an appeal on points of fact must show serious errors of judgement, or obvious mistakes on the part of the First Hall, Civil Court.

Although an appeal from judgments of the Superior Courts in first instance are meant to be full appeals on both the law and legal principles applicable as well as on the facts, a significant number of judgments have consistently upheld that the Court of Appeal should not, in principle, typically disturb the appreciation of facts made by the first courts, which would have heard witnesses and had other evidence filed before them.

Generally, new points that were not explored at first instance cannot be explored in appeal, and no evidence that had already been available to the parties can be submitted in appeal. There are, however, certain specific pleas (eg, the defence of prescription) that can be raised for the first time also on appeal.

An appeal from a final judgment is not subject to any conditions, except for the security for costs. It is a right exercisable at the instance of the party in a judgment to ask for a quashing of the judgment in first instance or the amendment thereof.

Appeals from certain interim, interlocutory or other decrees delivered by the courts can only be made following an application for leave of appeal. If such leave of appeal is not granted, appeal from such decrees can only be made together with an appeal from the final judgment.

The Court of Appeal may confirm the judgment delivered by the court of first instance. It may also amend, reverse, vary or annul the judgment of the court of first instance; in certain cases, the logical conclusion of such decisions may be to remit the case back to the court of first instance for a decision on the merits in light of the decision in appeal, depending on the circumstances of the case.

Furthermore, if an appeal is found to be frivolous or vexatious, the Court of Appeal may award double costs against the appellant.

In its judgment, the court will make a decision regarding who is to bear the costs of proceedings. These costs are typically made up of Court Registry fees, advocates’ fees and legal procurator’s fees, which are established and levied in accordance with statutory tariffs. These official rates are found in the schedules to the Code of Organisation and Civil Procedure.

Typically, when judgments allocate responsibility for costs of litigation, whether so apportioned or whether allocated against the losing party in litigation, the quantum of such costs is the quantum established in the said schedules.

Generally speaking, costs follow the event and the rule is that the unsuccessful party is ordered to pay the costs of proceedings and to pay the costs of the successful litigant, but this is not necessarily so. It is not uncommon for courts to apportion costs between the parties in various degrees.

Maltese law does not attempt to restrict judicial discretion in the matter of cost allocation. As mentioned above, costs typically follow the event, although there have been instances where one party’s dilatory behaviour during proceedings or a party’s refusal to reach an early settlement have been considered in the allocation and award of costs.

Interest is not awarded on costs.

There has been an increased drive in recent years to integrate alternative dispute resolution mechanisms within the general architecture of civil procedure in Malta, with varying degrees of success. Some initiatives have been of purely domestic origin, with others following the transposition of EU instruments like the Mediation Directive.

Leaving arbitration aside, since both domestic and international arbitration having its seat in Malta have significant take-up and a life of their own, mediation is increasingly popular.

Judges now have the power to refer a case before them to mediation and, in certain specific types of lawsuits, there is a mandatory reference to court-annexed mediation schemes that have to be resorted to before the case can proceed to litigation.

Court annexed mediation schemes and inferences on costs as a result of unreasonable refusals to refer to ADR before litigation seem to be the direction forward.

Please see 12.1 Views of Alternative Dispute Resolution regarding the promotion of ADR. As far as is known, there are not yet any clear sanctions for refusing ADR.

The institution which regulates arbitration in Malta is the Malta Arbitration Centre (MAC), and the institution which regulates mediation is called the Malta Mediation Centre (MMC).

The functions of the MAC/MMC include the following:

  • the promotion of Malta as a centre for international commercial arbitration;
  • encouraging domestic and international arbitration/mediation as a means of settling disputes; and
  • conducting domestic and international arbitration/mediation in Malta.

The MAC is run by a Board of Governors, the Chairperson and Deputy Chairperson of which must have been practising lawyers for not less than 12 years. This requirement also applies to the MMC.

For arbitrations where the arbitral procedure is governed by Maltese law, the Arbitration Act and the Arbitration Rules (subsidiary legislation 387.01) apply. The arbitration agreement must be in writing, and the arbitration must be registered with the Malta Arbitration Centre (MAC). In order to institute arbitration, a notice of claim must be lodged with the MAC, including information about the claim and the nomination of an arbitrator. The notice must then be served on the respondent. If the parties agree on the procedure to be adopted by the arbitral tribunal, then the arbitrator may themselves determine said procedure to be adopted. Proceedings are generally informal and flexible in nature. In default of agreement between the parties, the rules set out in the Code of Organisation and Civil Procedure will apply with respect to the production of documents and/or witnesses.

Domestic arbitration awards are deemed to constitute an executive title under Maltese law.

As for the recognition and enforcement of foreign awards, Malta has signed and ratified the 1958 New York Convention on Recognition and Enforcement of Foreign Arbitral Awards. In matters relating to international arbitration, the Arbitration Act is based on the 1985 UNCITRAL Model Law.

Certain subject matters are not arbitrable, including criminal cases and cases relating to acts of civil status and public law matters, amongst others.

An application may be made to the Courts of Justice in Malta to set aside an award where Malta was the seat of the arbitration largely on the same grounds as those for the refusal of recognition and enforcement of foreign arbitral awards listed in the New York Convention and the setting aside grounds in the UNCITRAL Model law. Thus, an award will only be set aside if the appellant proves to the satisfaction of the Court of Appeal, that, for instance:

  • proper notice was not given;
  • the arbitral award falls outside the parameters of the arbitration agreement;
  • the arbitration was not conducted in accordance with the agreement of the parties; or
  • the award conflicts with the public policy of Malta.

An application to the Court of Appeal to set aside an arbitral award must be made within 15 days of the notification to the applicant of the award, and the applicant must notify the arbitrators and the MAC with a copy of the application not later than 15 days after the filing of said application.

Appeals against arbitral awards can also be filed before the Court of Appeal. However, this is only applicable in domestic arbitrations and if the parties have agreed in writing to make such a right of appeal available. Furthermore, with respect to mandatory arbitration, parties have a right to appeal on both points of fact and points of law to the Court of Appeal.

Domestic awards in procedures that have been initiated by means of a notice of arbitration and delivered by arbitrators under the auspices of the MAC are recognised as executive titles and can be enforced in Malta in exactly the same manner as court judgments.

Foreign arbitration awards must also be registered with the MAC, whereby they will be enforced by the courts of Malta in the same manner as domestic arbitral awards. This applies to foreign arbitral awards to which the treaties set out in the Second Schedule to the Malta Arbitration Act (ie, the Geneva Convention, the Geneva Protocol and the New York Convention) are applicable. An application for registration will be served upon the judgment debtor, who will have the opportunity – within a specified time period – to file a note of objection to the registration on any of the grounds specified in those conventions.

The entity designated as the competent entity for recognition and enforcement under the New York Convention is the Chairman of the Malta Arbitration Centre. Decisions regarding recognition and enforcement delivered by the Chairman of the MAC were not appealable until a matter of days ago: there has been a legislative amendment to this effect in October 2020, introducing a right of appeal in certain circumstances.

There have been a number of legislative changes with respect to the dispute resolution landscape, some already implemented while others are still in the pipeline at the time of writing. These include changes to the manner in which judicial appointments are made, and the raising of provisions dealing with the office of the Ombudsman to the constitutional level. There are also plans to modernise and harness the use and implementation of ICT technologies. In fact, the use of videoconferencing and virtual hearing has increased, particularly in view of the restrictions imposed to combat the current COVID-19 pandemic. However, at the time of writing, the expected large-scale reform on increased use of technology in litigation hast still not been launched.

There are also ongoing initiatives relating to a deeper integration of ADR in the dispute resolution process, and amendments to the Arbitration Act and the Code of Organisation and Civil Procedure are in the pipeline.

The COVID-19 pandemic prompted the temporary closure of the courts of justice in Malta, from 16 March 2020 until 5 June 2020. This closure affected the superior and the inferior courts, as well as the appellate courts, irrespective of their competence or jurisdiction. Tribunals, boards, administrative commissions, committees and other entities that operate from the building of the Courts of Justice were also affected.

The court registry was also temporarily closed from 16 March 2020, but was reopened with effect from 4 May 2020.

The courts of justice in Malta have now been reopened, with certain rules in place to minimise the number of people present in the building at any given time. Hearings now have a set appointment time and clients are encouraged not to attend unless absolutely necessary.

The running of any legal and judicial times and of any other time limits including peremptory periods, either civil or commercial, was suspended with effect from 2 April 2020.

With regards to substantive or procedural time limits relating to any court operating from the building of the Courts of Justice, this suspension lasted until 12 June 2020.

Ganado Advocates

171 Old Bakery Street
Valletta
Malta VLT 1455

+356 2123 5406

lawfirm@ganado.com ganado.com
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Law and Practice

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Ganado Advocates is Malta’s largest full-service business law firm and one of its most prestigious, with more than 90 lawyers and professionals. It has been a trusted legal adviser to some of the largest international and local corporations and financial institutions for the past 50 years, and is proud to have contributed to Malta’s achievements by underpinning clients’ continued success. The firm’s values, principles and passion for the law and clients’ business are reflected in its lawyers and other professionals, who are not only recognised leaders in their legal practice areas but also in the industry sectors which they service. The firm has assisted clients in domestic litigation and international commercial arbitrations across a number of practice areas, including construction contracts, admiralty and shipping claims, banking and financial services, blockchain and technology disputes, intellectual property, real estate and trusts.

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