MALTA Law and Practice Contributed by: Antoine Cremona, Louis Cassar Pullicino, Clement Mifsud-Bonnici and Yasmine Ellul, Ganado Advocates
cult to see Maltese courts enforce awards set aside at the seat, due to overarching principles of international arbitration and considerations of public policy. Where an arbitration award has not been set aside at the seat of arbitration, but is subject to ongoing set-aside proceedings at the seat, the recognition procedure in Malta is typically stayed. This is in line with the procedural requirement under Rule 54 of the Rules which states that together with the application for recognition the applicant has to provide “a sworn declaration [...] that no recourse has been taken and is pending against the award and the award is final”. There is some uncertainty as to whether this require - ment exceeds the minimum standards set by the New York Convention; however, in practice, it has led Maltese courts to suspend enforcement proceedings when annulment actions are pending at the seat of arbitration. Sovereign Immunity Malta has not enacted national legislation on sover - eign immunity or ratified any international conventions addressing the matter. Although Maltese courts have occasionally referred to foreign statutes such as the UK State Immunity Act and the US Foreign Sovereign Immunities Act, sovereign immunity generally applies as a principle of customary international law. Maltese case law on the enforcement of judgments or awards against state-owned assets is limited. How - ever, existing decisions on sovereign immunity from jurisdiction suggest that the defence may only be suc - cessfully invoked at the enforcement stage if the state or state entity demonstrates that the assets targeted are used for, or intended to be used in, the exercise of sovereign (public) functions. In determining jurisdiction over a foreign state, Mal - tese courts typically distinguish between sovereign acts that are purely governmental (acta jure imperii) and those of a commercial nature (acta jure gestionis). For example, in AWT Handels Gesellschaft mbH v Il- Bastiment M/V Dmitriy Polujan et , the court held that the vessel in question, although owned by the State of Ukraine, was engaged in commercial activities as part of the Ukrainian maritime fleet and was therefore not entitled to sovereign immunity. Later cases, includ -
ing Clark v Salem I.S. Alhenshiri pro et noe et , have assessed sovereign immunity based on the subject matter of the dispute rather than strictly applying the jure imperii/jure gestionis distinction. In this instance, the court rejected Libya’s claim to immunity, finding no evidence that the obstruction of property rights in Malta that were the subject of the proceedings con - stituted a sovereign act. Overall, Maltese jurisprudence reflects a willingness to apply international principles to limit sovereign immu - nity in cases involving commercial activities or com - mercial assets of a foreign sovereign. Consequently, an enforcing creditor must demonstrate that the prop - erty subject to enforcement qualifies as being used for “commercial activity” or “commercial purpose” under the applicable law. Furthermore, enforcement may be pursued against assets held by a state entity, even if the award was made against the state itself, provided that the entity is an organ of the state. 12.3 Approach of the Courts The MAC and the Maltese courts apply a strict stand - ard to the enforcement of awards but have generally taken a positive pro-arbitration stance towards the recognition and enforcement of arbitration awards, interpreting the Article V exceptions in the New York Convention restrictively. Awards are generally consid - ered to violate public policy only in cases of blatant and manifest contrast with the basic principles of the Maltese legal framework. However, there is no devel - oped case law on international public policy similar to French case law on the subject. 13. Miscellaneous 13.1 Class Action or Group Arbitration While Maltese law does not specifically provide for class action arbitration, it is possible to have multiple parties as claimants or defendants to arbitration pro - ceedings (Article 21A of the Act). 13.2 Ethical Codes In Malta, arbitrators are governed by a code of eth - ics issued by the MAC, although this code has not been updated for some time. In practice, international soft law instruments – such as the IBA Guidelines on
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