MALTA Law and Practice Contributed by: Antoine Cremona, Louis Cassar Pullicino, Clement Mifsud-Bonnici and Yasmine Ellul, Ganado Advocates
The Maltese courts adopt a generally supportive pos - ture towards arbitration and are especially reluctant to interfere with international arbitrations seated in Malta, while retaining certain residual powers over domestic arbitrations. As a general matter, the courts look with disfavour upon parties that attempt to circumvent or frustrate arbitration proceedings through recourse to the courts. Faced with such attempts, the courts have consistently shown themselves supportive of arbitra - tion and unsympathetic to these claims, and readily recognise the arbitral tribunal’s competence to rule on its own jurisdiction. There is no significant case law to report in the last year on the approach taken by the Maltese courts on matters relating to the appli - cable law to the arbitration agreement. Typically, and in the absence of specific circumstances indicating otherwise, the arbitration agreement will be deemed to be governed by the law applicable to the underly - ing contract. Recently, Maltese courts have declined to lift local precautionary measures granted in support of pend - ing recognition and enforcement proceedings in respect of an international arbitration award in Malta, notwithstanding the existence of security in another EU member state in support of foreign exequatur proceedings concerning the same award. The courts have likewise stayed proceedings in favour of a valid arbitration clause where the proceedings involved not only signatories to that clause but also a non- signatory party. More generally, arbitration agreements are, for the most part, readily recognised and enforced by the Maltese courts, which regularly stay proceedings in favour of arbitration when faced with what appears to be a valid arbitration agreement. Where a court seised of a matter stays proceedings in favour of the arbitral tribunal, it does not thereby decline all residual juris - diction; rather, it stays the proceedings pending the tribunal’s determination of its own jurisdiction and its decision on the merits. 3.4 Validity In terms of Article 16 of the UNCITRAL Model Law and Article 32 of the Arbitration Act (modelled on Article 16 of the UNCITRAL Model Law), an arbitration clause shall be considered valid even if the rest of the con -
tract in which it is included is determined to be invalid. This applies to both domestic and international arbi - trations. There can be little doubt that Maltese courts may consider an arbitration clause to be valid even if the rest of the contract in which it is contained is invalid in full application of the doctrine of separability that is contained in statutory provisions.
4. The Arbitral Tribunal 4.1 Limits on Selection
In accordance with the UNCITRAL Model Law, the Arbitration Act allows the parties to an arbitration agreement the faculty of determining any matters relating to the choice, as well as the number, of arbi - trators. Failing a determination, the default number of arbitrators is three. This is except for those cases where the disputed amount is under EUR11,646.87, in which cases there will be only one arbitrator. In addition, the MAC (the chairperson of the MAC being established as the default appointing authority) has set up various specialised panels for domestic as well as international arbitration which may be resorted to in order to appoint accredited arbitrators. To name a few, these panels include: • the Maritime Panel; • the General/Civil Commercial Panel; • the Banking, Finance, Accounting and Taxation Panel; • the Building Construction Panel; and • the Medical Panel. There is, however, no law imposing a restriction on either the parties or the default appointing authority as to their choice of arbitrators from the said panels. 4.2 Default Procedures In default of any agreement on the procedure for the appointment of arbitrators, the Arbitration Act pro - vides that, in the case of an arbitration with three arbi - trators, each party will appoint one arbitrator, with the two party-nominated arbitrators then appointing the third arbitrator, who shall act as the chairperson of the arbitral tribunal. However, if a party fails to appoint an arbitrator within 30 days of receipt of notification of the appointment of an arbitrator by the other party, or
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