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23 December 2015
As discussed in a previous update, in MV Dadayli the court upheld an application made by the vessel Dadayli which claimed that the arrest of the vessel was illegal, as the conditions stipulated in Section 742(b) of the Code of Organisation and Civil Procedure were not satisfied (for further details please see "Wrongful arrest of ships"). The arrest of a vessel can have disastrous effects on owners and charterers. As such, arrests are an exceptionally effective and powerful tool which genuine creditors have every right to use, provided that the law is observed. It is equally important to ensure that this procedure is not abused or used in order to put illegitimate and illegal pressure on owners.
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. Unfortunately, this 'free-for-all' mentality has reared its head in Malta and overseas – so much so that the Comite Maritime International (CMI) formed an international working group to study the frequency of illegal arrests and how various member states of the CMI deal with them. It is significant that the CMI – the international body which drafts the majority of international maritime conventions before they are approved by the International Maritime Organisation of the United Nations – has put this item on its agenda.
MV Dadayli was not the only case in 2015 in which the Maltese courts have addressed arresting parties' failure to follow the law which safeguards against abuse.
On May 20 2015 the court agreed to issue an arrest warrant against the MV Blue Rose. The arresting party filed a sworn application stating that the vessel was in Maltese territorial waters outside the harbour and that the claim would be prejudiced if the vessel departed. The Maltese courts' jurisdiction extends over Malta's 12-mile territorial sea. The courts have no jurisdiction – and therefore cannot grant arrest warrants – over vessels outside Malta's territorial sea, which is why the law provides that applicants must swear a declaration as to the location of the vessel within Maltese territorial waters. Unlike 20 years ago, anyone with access to a computer can find out whether a vessel has entered Maltese territorial waters.
The warrant was served on Transport Malta which immediately realised that the vessel was not in Maltese territorial waters. This meant that the arrest warrant was null, thereby rendering the arrest of the vessel illegal. Transport Malta immediately filed a note before the court informing it of this new information. Justice Joseph Zammit McKeon correctly and promptly revoked the arrest warrant which he had granted a few hours earlier.
The case demonstrates how easily a system which works perfectly when the law is respected can be abused. This abuse may lead to mistrust with regard to the system. One of the features that makes arrests in Malta efficient is the fact that an arresting party can obtain an arrest ex parte, meaning that the application is not served on the defendant. If arrests were served on defendants, the arresting party would lose the element of surprise, which is considered the most important part of the procedure. However, because the courts accept ex parte declarations, they must ensure that those declarations are correct and honest. If they are incorrect or dishonest, the entire system is jeopardised.
The legislature has tried to safeguard against abuse by requiring sworn declarations. However, unfortunately, there are an increasing number of declarations taken in the most superficial of manners, without proper verification. Therefore, the court's immediate action on this occasion was extremely important, as it demonstrated that misinformation will not be tolerated.
This is not the first time that an arrest warrant has been issued for a vessel outside Maltese territorial waters. The exact same thing happened in Madara. This case is repeatedly cited in the media as the vessel which "escaped" from arrest. In fact, the vessel never escaped from arrest. As in Blue Rose, the arresting party swore that the vessel was in Maltese territorial waters and obtained the warrant despite the fact that the vessel was not in Maltese territorial waters at the time, nor was it served with the warrant. As such, the arrest was illegal and the arrest warrant would have been revoked had it come before the courts. A report published by Brig (Rtd) Carmel Vassallo, which was commissioned to investigate the 'escape' of the vessel, established that the vessel was not in Maltese territorial waters when the arrest warrant was issued. Regrettably, the author of the report focused on which party was responsible for keeping the vessel from escaping, instead of focusing on the fact that it had not escaped in the first place.
The moral of the story is that the parameters and conditions provided by the law must be religiously and meticulously observed; otherwise, in practice, Maltese shipping law may shift to the law of the jungle. Malta has worked exceptionally hard to develop into a maritime nation of repute and this status cannot be allowed to deteriorate. The Maltese legal system must not only be serious and steadfast, but must also be seen as serious and steadfast. Therefore, the judiciary must continue to ensure that the law of the jungle does not become a reality and that persons abusing the system are held accountable.
For further information on this topic please contact Ann Fenech at Fenech & Fenech Advocates by telephone (+356 2124 1232) or email (email@example.com). The Fenech & Fenech website can be accessed at www.fenechlaw.com.
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