Shipping 2026

MALTA Trends and Developments Contributed by: Ann Fenech, Adrian Attard and Daniel-Luc Farrugia, Fenech & Fenech Advocates

member of the authors’ firm, and is a combined effort between the maritime regulator, justice department and maritime legal practitioners. This also explains why Malta retains its prominence in the international maritime sphere since it has recognised the impor - tance of including all stakeholders in all processes, with a view to taking the industry forward. At the same time, Malta awaits the finalisation of all EU consent processes enabling EU member states to ratify the Convention. This process is expected to be com - pleted in the first quarter of 2026. Malta hopes to ratify the Convention as soon as possible thereafter. It will be of great benefit to Malta’s already robust and creditor-friendly laws for its courts to be able to pro - vide a Certificate of Judicial Sale evidencing the free and unencumbered title of a purchaser, which would have to be honoured by all state parties, including the judiciary and registrars of ships in such state parties. The Convention is currently considered as one of the most important current international legal instruments in view of the stability and certainty it offers interna - tional trade. It ensures that when purchasers of ves - sels in judicial sales purchase ships free and unen - cumbered, they are able to trade their vessels without fear of rearrest by the vessels previous creditors. The Merchant Shipping Act: the Novel Finance Charter Instrument A previous edition of this guide noted that the Mer - chant Shipping (Amendment) Bill had been tabled before parliament and indicated the authors’ expec - tation that the new law would be enacted in 2025. The authors also highlighted that the Bill sought to introduce novel provisions aimed at further protecting the interests of ship financiers, most notably through the creation of a new security interest, the Finance Charter Instrument (FCI). At the time, the authors expected that this development would most likely generate significant interest among finance lessors looking for a flag jurisdiction, offering them robust protection in ship lease financing transactions. The legislation was enacted in 2025 as anticipated, with Act I of 2025 coming into force a few months later, in early April. Just a couple of months later, in June 2025, the authors’ firm assisted lessors with the

registration of the first two FCIs over Maltese-flagged vessels. Since then, interest in this innovative security mechanism has continued to grow, with many more finance lessors opting to secure their interest through an FCI over Malta-flagged vessels. In practical terms, the newly introduced Article 49B of the Merchant Shipping Act grants a finance lessor the ability to secure its rights over a chartered vessel by registering a charge over a Maltese-flagged vessel, which is enforceable against third parties. From a ranking perspective, a lessor’s rights under an FCI rank immediately after those of any registered mort - gagee. In the authors’ view, the subordinate position of the FCI vis-à-vis a registered mortgage underscores the legislature’s intention to preserve the primacy of the mortgagee’s position under Maltese law. Indeed, the new law expressly stipulates that the registration of any FCI shall not affect any mortgage registered over that vessel, irrespective of whether such mortgage registration is affected prior or after the recordation of an FCI, and any rights of the mortgagee shall in no way be prejudiced by the registration of any FCI. This essentially also means that, under Maltese law, it is permissible to have the concurrent registration of both a mortgage and an FCI over the same vessel. This framework affords finance lessors considerable flexibility, as it enables them to formally record their rights as lessors while simultaneously allows the ves - sel to be leveraged as collateral through the granting of a mortgage in favour of a third-party lender – pro - vided naturally that this is not expressly prohibited under the bareboat charterparty terms. As a result, Maltese law offers a notably versatile platform for structuring more complex ship leasing and financing arrangements. Looking ahead, the authors expect that the FCI will continue to gain traction over the coming year and is likely to become a more standard security feature in typical finance lease transactions involving Maltese- flagged vessels. At the same time, the continued pri - macy of the mortgagee’s position under Maltese law, and the flexibility afforded by the concurrent registra - tion regime, will continue to bolster and reinforce Mal - ta’s standing as a financier-friendly flag jurisdiction.

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