Shipping & Transport, Malta updates

Irrevocable power of attorney as additional security
Fenech & Fenech Advocates
  • Malta
  • 19 June 2019

If an event of default occurs, a power of attorney executed by the mortgagor will allow the mortgagee to apply for the immediate closure of the vessel's Maltese register on the mortgagor's behalf and to pay all fees, make all declarations and receive all certificates, including the deletion certificate. While not essential for enforcement, registration of the irrevocable power of attorney is nevertheless an option for mortgagees and provides the added benefit of allowing for swifter enforcement in cases of default.

Securitisation in shipping: Maltese perspective
Fenech & Fenech Advocates
  • Malta
  • 16 January 2019

Asset-backed securitisation in the shipping sphere has recently come to prominence in light of traditional financiers' reluctance to finance shipping activities. The amalgamation of Malta's securitisation framework and merchant shipping laws makes up for a sui generis alternative corporate vehicle to facilitate such transactions and provide the stability and security for which investors yearn.

The saga continues: bunker delivery notes under Maltese law
Fenech & Fenech Advocates
  • Malta
  • 19 December 2018

The practice of inserting a reference to a physical supplier's applicable terms and conditions in a bunker delivery note is rife within the local bunkering community. Historically, case law on the subject has been sparse. However, a recent court judgment supports the view that bunker suppliers cannot pursue a vessel or its owners for unpaid bunkers unless that claim is privileged or the order came directly from the vessel, its owner or its agent.

Mortgage amendments – when are they required?
Fenech & Fenech Advocates
  • Malta
  • 21 November 2018

A mortgage over a Malta-flagged vessel may be drawn up to secure the payment of a principal sum and interest, an account current or the performance of any other obligation – including a future obligation – due to a creditor by the debtor. The parties to an underlying security document may enter into negotiations resulting in changes to the terms set out in the security document. The question that therefore arises is whether a mortgage amendment should be registered to reflect the new terms.

Lost mortgage instruments
Fenech & Fenech Advocates
  • Malta
  • 07 November 2018

The registration of a mortgage over a Malta-flagged vessel in favour of an individual, corporate lender or security trustee (the mortgagee) requires the filing of a statutory mortgage instrument (the deed) at the Maltese Ship Registry. However, what happens if the original mortgage instrument is misplaced? Maltese law affords two remedies in such instances; the chosen remedy will depend on the remaining duration of the registered security.

Judicial sale by auction of Indian Empress
Fenech & Fenech Advocates
  • Malta
  • 05 September 2018

The June 2018 sale of the Indian Empress has attracted the attention of the superyacht community worldwide and international brokers, the international yachting media and potential owners and creditors of the yacht are watching this space very closely. This was the first time that a Maltese court ordered bidders in a judicial sale by auction of vessels to make a cash deposit in court prior to the sale taking place and the first time that a bidder was held liable for the payment of the difference.

Is a bunker delivery note a binding contract under Maltese law?
Fenech & Fenech Advocates
  • Malta
  • 20 June 2018

Following the collapse of OW Bunkers, physical bunker suppliers worldwide have had to rethink their business model with respect to the potential debt exposures that they face when conducting business through bunker traders. The matter is further complicated due to the fact that in many cases, there is not just one bunker trader involved, but rather a series of intermediaries, brokers and intermediary traders.

Legislative changes: ship sale contracts and charterparties
Fenech & Fenech Advocates
  • Malta
  • 22 November 2017

While primarily introduced to amend and update the Aircraft Registration Act and other ancillary-related laws, Act LII/2016 also promulgated particular amendments which go beyond aviation law into the realm of shipping. These recent changes are making Maltese law an ideal legal regime to govern and regulate disputes which may arise under certain types of shipping contract – namely, ship sale and purchase agreements, promise of sale agreements and charterparties.

New guidelines on private yachts carriage capacity
Fenech & Fenech Advocates
  • Malta
  • 12 April 2017

At the start of 2017 Transport Malta, the authority responsible for the administration of the Malta flag, introduced new guidelines that allow more than 12 persons on board privately registered yachts. The new guidelines stem both from a recognition that there is a gap in the superyacht market and the administration's continued effort to remain at the forefront as a leading yachting flag.

Court lifts physical bunker supplier's arrest of vessel
Fenech & Fenech Advocates
  • Malta
  • 22 March 2017

Following the issuance of a provisional arrest warrant at the request of a physical bunker supplier, the Maltese court determined that it was not vested with jurisdiction in rem and accordingly lifted the arrest. This judgment sheds important light on the onus of proof with which an arresting creditor is burdened. The court held that it was insufficient merely to procure evidence of knowledge of the supply or proof of acceptance of the product from the supplier.

'Maritime Malta' – legal perspective
Fenech & Fenech Advocates
  • Malta
  • 30 November 2016

The term 'Maritime Malta' perfectly describes Malta – a country which has always had close connections with the sea and maritime sector. In addition to its strategic position, Malta has a stable and reliable legal regime and laws which give investors and their financiers a high degree of confidence. These achievements are a direct result of careful planning, a strong workforce that is prepared to deliver value for money and a 'can do' attitude.

Unnecessary risks constitute breach of marine insurance policy
Fenech & Fenech Advocates
  • Malta
  • 27 April 2016

The Maltese Civil Court recently held that underwriters need not make payments under an insurance policy when the loss or damages occurred due to a fault or negligence on the part of the assured and where the assured's behaviour constitutes a breach of policy. This judgment highlights the importance of ensuring that owners are familiar with the content of their insurance policies – in particular, with the responsibilities arising thereunder.

Animo compensandi purchase of a vessel sold by court-approved private sale
Fenech & Fenech Advocates
  • Malta
  • 02 March 2016

In a recent court-approved private sale, the Maltese Civil Court unprecedentedly permitted a mortgagee to purchase a vessel animo compensandi, meaning that rather than paying the purchase price from its own pocket, the amount was offset against the existing debt owed to the mortgagee. This judgment is significant, as it offers mortgagees more flexible enforcement options.

Wrongful arrest of ships – part two
Fenech & Fenech Advocates
  • Malta
  • 23 December 2015

While the arrest of vessels is an exceptionally effective and powerful tool which genuine creditors have every right to use, it is paramount that the rule of law is observed and the law's high standards are maintained. Otherwise, there is a risk of increased lawlessness. The Maltese courts have addressed arresting parties' failure to follow the law in several cases, taking immediate action to correct any misinformation.

Penalty proceedings following escape of arrested vessel
Fenech & Fenech Advocates
  • Malta
  • 30 September 2015

A Maltese civil court recently considered whether the penalty proceedings under Article 865 of the Code of Organisation and Civil Procedure can be brought against a vessel in rem. The court found that such proceedings can be commenced only against the person or persons that removed the vessel from Maltese waters in violation of the court order, not against a vessel in rem.

Wrongful arrest of ships
Fenech & Fenech Advocates
  • Malta
  • 06 May 2015

A recent case has highlighted a weakness in Maltese law in relation to the right to claim damages resulting from an illegal arrest. Despite finding that the arrest was illegal, the court stopped short of ordering reparations because it held that the defendants' failure to satisfy the criteria outlined in Article 742(D) Code of Organisation and Civil Procedure was not malicious, frivolous or vexatious and thus no damages could be sought.

Malta – logical choice for superyacht owners
Fenech & Fenech Advocates
  • Malta
  • 15 April 2015

The third annual Opportunities in Superyachts Conference was recently held in Malta. Over the past eight years Malta has enjoyed success within the superyacht sector, steadily increasing the size of its registered fleet and the number of yachts which benefit from the solutions offered by the jurisdiction. As such, the conference largely focused on what Malta offers owners and operators of private and commercial yachts.

Court-approved private sales
Fenech & Fenech Advocates
  • Malta
  • 18 March 2015

In 2006 the Organisation and Civil Procedure Code was radically overhauled in relation to the provisions governing Maltese enforcement mechanisms, among other things. The changes to enforcement mechanisms included the introduction of court-approved private sales, under which mortgagees can source private buyers at the highest possible agreed price and, on court approval, sell vessels free and unencumbered.

Bunkers excluded from judicial sale on basis of retention of title clause
Fenech & Fenech Advocates
  • Malta
  • 11 February 2015

The Civil Court recently upheld a request to have bunkers supplied to the defendant vessel excluded from a court-approved private sale on the basis that retention of title clauses existed, which governed the supply of the bunkers. The decision demonstrates that the inclusion of retention of title clauses can help to mitigate any possible losses in relation to bunkers.

Malta – a reputable flag of choice
Fenech & Fenech Advocates
  • Malta
  • 13 August 2014

With its centuries-old maritime tradition and as an EU member state, Malta has become the largest European maritime flag and also the seventh largest flag worldwide. Thanks to the unstinting efforts of the government and the maritime industry, Malta has developed into a reputable flag of choice and quality, which offers a wide array of international maritime services and fiscal incentives.

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