MALTA Trends and Developments Contributed by: Ann Fenech, Adrian Attard and Daniel-Luc Farrugia, Fenech & Fenech Advocates
From a sanctions perspective, and as the war in Ukraine continues, it is also reasonable to assume that existing sanctions will remain in force in the months ahead and that, at least at EU level, further restrictive measures will likely be introduced. It is expected that a wider range of restrictions and prohibitions will be introduced that will inevitably affect, either directly or indirectly, both the shipping and energy sectors. At the time of writing, the European Commission has in fact already proposed an extensive new sanctions package which seeks to introduce a full maritime ser - vices ban on Russian crude oil across the EU. Such a measure would effectively end any Russian oil trade within the Union, irrespective of price of the product, and would undoubtedly have significant ancillary repercussions for a broad range of stakeholders within shipping. In addition, the proposed 20th sanctions package purportedly targets a further 40+ vessels forming part of the so-called Russian shadow fleet. While it remains to be seen whether these measures will be adopted in their current form, it is reasonable to expect that 2026 will see an increase in sanctions- related responsibilities and obligations imposed on economic operators in the shipping sector. That said, it also remains to be seen whether all other G7 part - ners will adopt a similar approach to that being pro - posed at EU level. Given Malta’s sizeable shipping fleet, ship-owners and operators will need to exercise continued vigilance when it comes to sanctions compliance. This includes ensuring full awareness of their ever-evolving obliga - tions, confirming that contractual documentation adequately addresses sanctions-related contingen - cies, and, most importantly, maintaining robust com - pliance and screening procedures to avoid breaching any sanctions. Judicial Sales: Malta Committed to Ratifying the Beijing Convention One of Malta’s recognised strengths is the comfort its robust legislation offers financiers. In situations where owners regrettably default on their finance arrange - ments, enforcement of the financiers’ rights is para - mount. Thus, Malta retains its position as a favour - able jurisdiction for the arrest of ships; consequently,
it continues to be a very popular jurisdiction for the holding of judicial sales through which financiers and other creditors very frequently successfully enforce their rights. In terms of Maltese law, a judicial sale may either be conducted by means of a public auction or carried out through private sales with the approval of the court. In both cases, the new purchasers would acquire a free and unencumbered title. Thus, Malta remains a forum of choice for enforcement for many ship financiers and mortgagees. This legislative robustness makes it easier for ship-owners to obtain financing when vessels are registered under the Maltese flag, since Maltese law grants financiers a significant degree of security. 2025 saw several judicial sales by auctions taking place, as well as several court-approved appli - cations being heard by courts. This robustness does not simply exist on paper but translates itself into real- time effectiveness whenever a mortgagee needs to take that enforcement step by arresting the vessel and having her sold in a judicial sale. The ratification of the Convention on the International Effects of Judicial Sales remains an important deliver - able for Malta during 2026. This Convention has reg - istered great successes in a very short period of time, underlining its importance to the maritime industry and international trade in general. In the few years since its adoption by the General Assembly of the United Nations in December 2022, it has garnered 34 signatories and has been ratified by three state par - ties; therefore, in terms of Article 21 of the Convention, it will now come into force on 17 February 2026. Malta signed the Convention on 19 June 2024 in a special and unique signing ceremony held in Malta, under the auspices of the President of the Republic of Malta. For this, the United Nations Treaty Book was flown specially from New York to Malta, enabling a second signing ceremony to take place in Malta, during which Spain, Italy, Cyprus, Croatia, Cote d’Ivoire and Antigua Barbuda also signed the Convention. Malta is now in the process of drafting the necessary amendments to the Code of Organisation and Civil Procedure as well as to the Merchant Shipping Act to accommodate the terms of the Convention. This process is in the hands of a committee headed by a
366 CHAMBERS.COM
Powered by FlippingBook