MALTA Law and Practice Contributed by: Antoine Cremona, Clement Mifsud-Bonnici and Chiara Frendo, Ganado Advocates
12.2 ADR Within the Legal System Court-annexed mediation schemes and inferences on costs as a result of unreasonable refusals to refer to ADR before litigation seem to be the direction forward in Malta. See 12.1 Views of ADR Within the Country regarding the promotion of ADR. As far as is known, there are not yet any clear sanctions for refusing ADR. 12.3 ADR Institutions The institution which regulates arbitration in Malta is the Malta Arbitration Centre (MAC), and the institution which regulates mediation is called the Malta Media- tion Centre (MMC). The functions of the MAC/MMC include the following: • the promotion of Malta as a centre for international commercial arbitration; • encouraging domestic and international arbitration/ mediation as a means of settling disputes; and • conducting domestic and international arbitration/ mediation in Malta. The MAC operates under the direction of a board of governors, whose chairperson and deputy chairper- son must have been practising lawyers for at least 12 years. The MMC is also subject to this requirement. For arbitrations where the arbitral procedure is gov- erned by Maltese law, the Arbitration Act (Chapter 387 of the laws of Malta) and the Arbitration Rules (Subsid- iary Legislation 387.01) apply. The arbitration agree- ment must be in writing, and the arbitration must be registered with the MAC. In order to institute arbitra- tion, a notice of claim must be lodged with the MAC, including information about the claim and the nomina- tion of an arbitrator. The notice must then be served on the defendant. If the parties agree on the proce- dure to be adopted by the arbitral tribunal, then the arbitrator may themselves determine the procedure to be adopted. Proceedings are generally informal and 13. Arbitration 13.1 Laws Regarding the Conduct of Arbitration
When judgments allocate responsibility for litigation costs, whether so apportioned or whether they are allocated against the losing party, the quantum of costs is typically determined by the schedules. The courts generally apply the “costs follow the event” principle. 11.2 Factors Considered When Awarding Costs Maltese law does not attempt to restrict judicial dis- cretion in terms of cost allocation. As explained in 11.1 Responsibility for Paying the Costs of Litigation , costs typically follow the event, although there have been instances where one party’s dilatory behaviour during proceedings or a party’s refusal to reach an early settlement have been considered in the alloca- tion and award of costs. 11.3 Interest Awarded on Costs Interest is not awarded on costs. 12. Alternative Dispute Resolution (ADR) 12.1 Views of ADR Within the Country There has been an increased drive in recent years to integrate ADR mechanisms within the general architecture of civil procedure in Malta, with vary- ing degrees of success. Some initiatives have been of purely domestic origin, with others following the transposition of EU instruments like the Mediation Directive. Aside from arbitration, since both domestic and inter- national arbitration with a seat in Malta have gained significant traction and a life of their own, mediation has become increasingly popular. Judges now have the power to refer a case before them to mediation and, in certain specific types of lawsuits, there is a mandatory reference to court- annexed mediation schemes before the case can proceed to litigation.
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