MALTA Law and Practice Contributed by: Ann Fenech, Adrian Attard, Lara Saguna Axiaq and Martina Farrugia, Fenech & Fenech Advocates
5.5 Arresting a Vessel Formalities
First, the creditor would need to arrange and pay for the de-bunkering of the fuel from on board the vessel. Second, the creditor would need to find available stor - age in Malta where the bunkers must be kept, until there is a final outcome on the merits of the claim. Malta is a relatively small country, with limited storage- tank facilities and a high market demand for available storage space. Third, the creditor would need to engage the storage facility-operator holding the product as its legal co- signatory, as required by law. The respective operator may not be willing to accept this role, as it confers several obligations and responsibilities. In this regard, Maltese law offers additional protec - tions to suppliers wishing to arrest those bunkers for which they have not yet been paid. Article 2009 (d) of the Civil Code would afford the unpaid supplier a privi - lege over the bunkers. Moreover, should the bunker supplier have included a retention of title clause in its terms of sale, that would be deemed enforceable in Malta, pursuant to the relatively new provisions under Article 26H of the Commercial Code. Accordingly, a bunker supplier with a claim for unpaid bunkers may retain title and take back possession of the bunkers, which would still be deemed to be its property. Maltese law does not specifically provide for the arrest of freight. Nonetheless, it would be possible (for instance) for a consignee with a claim against a ship-owner under a bill of lading to issue a garnishee order to seize freight that was due to that ship-owner. Under normal circumstances, a garnishee order is used in the context of seizing any funds belonging to a debtor in bank accounts held with local banks. The creditor names the banks as garnishees in their appli - cation, and consequently the banks would be obliged to seize any of the debtor’s funds in their possession. That said, the law allows a creditor to name any third party as a garnishee. There is, therefore, nothing precluding a consignee from issuing a garnishee order against the ship-own - er and listing the charterer as a garnishee. Once the charterer is served with the garnishee order, it would be legally obliged to deposit into court any moneys
A creditor seeking to arrest a vessel in Malta must submit an arrest application, including all the relevant details about the parties, the vessel and the nature of the claim, as well as the amount being claimed (which must be in excess of EUR7,000). Where the arrest - ing party is not Maltese, it would need to provide a power of attorney, notarised and legalised/apostilled, empowering its appointed local legal counsel to file the arrest on its behalf. It is advisable that the arresting creditor also include any documents to substantiate its claim, such as copies of the relevant contract or invoices, or even a statement of facts. Documents must be submit - ted in English or Maltese, or in any other language accompanied by a certified translation into Maltese or English. The arrest procedure in Malta is extremely expedi - tious, with arrests usually being issued within a matter of hours from filing. Moreover, it is also possible to arrest a ship outside normal court hours. Security for an Arrest The Maltese courts will never require an arresting creditor to put up any security prior to the issuance of an arrest. However, the owner of the arrested vessel may request security pursuant to Article 838A of the COCP. The court will only order the arresting party to put up security if the owner of the vessel can prove there is a “good cause” for such a demand. This is not defined; however, jurisprudence suggests that the owner would need to show that it may have a legiti - mate claim for statutory penalties, interests and dam - ages caused by the arrest. Failure to put up security It is possible for a creditor to arrest bunkers on board a ship by means of a warrant of seizure over those bunkers, which must necessarily be the property of its debtor. Nevertheless, there are several associated practical difficulties, which make this remedy less attractive. would lead to the release of the arrest. 5.6 Arresting Bunkers and Freight
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