MALTA Law and Practice Contributed by: Joseph Ghio, Fenech & Fenech Advocates
Arbitral Awards Foreign arbitration awards to which the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the Geneva Protocol on Arbi - tration Clauses of 1923 and the Geneva Convention on the Execution of Foreign Arbitral Awards of 1927 apply will be enforced by the courts of Malta upon their registration with the Malta Arbitration Centre (MAC). The Arbitration Act lays down that such awards shall be treated as executive titles and enforceable in Malta in the same manner as if such award were a domestic arbitration award. Recognition and enforcement of the award may be refused in the instances stipulated by the Arbitration Act. 2.6.7 Judgments in Foreign Currencies Money judgments awarded by the courts of Malta are denominated in the current lawful currency of Mal - ta, this being the euro. However, the courts of Malta ordinarily accede to specific applications for the cur - rency to be converted into and expressed in a foreign currency with the rate of exchange, typically but not always obtained at the time when the obligation was due and not at the time of delivery of the judgment. 2.6.8 Limitations on Lessors’ Actions Following Termination Recovering Default or Compound Interest As a general rule, the Maltese Civil Code restricts the charging of interest up to 8% per annum. Compound - ing of interest is not enforceable in Malta unless the obligation to pay interest is due for a period of more than one year and certain procedures prescribed in the Code are followed. However, limitations on the rate of interest and the compounding thereof do not apply to certain debts or obligations which are: • secured by a mortgage; or • due under a lease of a ship or aircraft, including an aircraft engine, whether registered in Malta or otherwise and whether governed by Maltese law or otherwise. Charging Additional Rent Following Termination of Lease for Default There are no limitations under Maltese law on a les - sor’s ability to charge additional rent following termi - nation of lease for default (including where the lessee
fails to return the aircraft). However, certain provisions in the lease agreement relating to additional rent pay - able in a default scenario may be recharacterised by the courts of Malta as another agreement (such as an agreement on additional rent being characterised as a penalty clause), which would then be subject to certain limitations or discretions applicable to the recharacterised transaction. 2.6.9 Lessor’s Requirement to Pay Taxes/Fees In enforcing an aircraft lease, a lessor is required to pay judicial costs which are generally determined based on the value of the claim. No taxes related to the enforcement are due. 2.6.10 Mandatory Notice Periods Unless required by the lease agreement, a lessor is not required by Maltese law to comply with any manda - tory notice periods to terminate an aircraft lease. 2.6.11 Lessees’ Entitlement to Claim Immunity Generally, immunity does not apply in the context of commercial activities outside official state functions. 2.6.12 Enforcement of Foreign Arbitral Decisions See 2.6.6 Domestic Courts’ Recognition of Foreign Judgments/Awards . 2.6.13 Other Relevant Issues Unlike other leases, aircraft leasing under Maltese law is characterised by party autonomy whereby the rela - tionship between the parties is governed, primarily, by the agreement between them in accordance with its terms. In the case of conflict with the provisions of the Maltese Civil Code, the terms and conditions of the aircraft lease agreement will prevail. 2.7 Lease Assignment/Novation 2.7.1 Recognition of the Concepts of Contractual Assignment and Novation The concepts of contractual assignment and of nova - tion are recognised under Maltese law.
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