The law lays down that executive titles, including judgments and decrees of the Maltese courts may, according to circumstances, be enforced by an executive act. One such act is the warrant of arrest of a sea vessel.

Article 281 of the Code of Organization and Civil Procedure also provides for the manner in which executive acts may be impugned.

To this end, the person against whom an executive act had been issued, or any other person who has an interest, may file an application, containing all desired submissions together with all documents sustaining the application, to the court issuing the executive act asking for that executive act to be revoked, either totally or partially, for any reason valid at law.

The application is to be served on the opponent who shall, within ten days (the court may, in urgent cases, reduce this period), file a reply with all submissions which this opposite party may wish to make together with all documents sustaining the reply. In default of such opposition the court shall accede to the demand.

The court is to decide on the aforementioned application after hearing the parties and receiving such evidence as it may deem fit, within one month from the filing of the said application.

An appeal from a court decree acceding to, or refuting the application may be entered by application within six days from the date on which such decree was read out. The Court of Appeal is then to appoint the appeal for hearing within one month from the date when the decree was read, and the appeal shall be decided within three months. No security for costs of the appeal is required.

The First Hall of the Civil Court, presided by Madame Justice Anna Felice in a  decree of 8 August 2023, dealt with one such application filed in terms of article 281 of the Code of Organization and Civil Procedure. The case was Nassau Maritime Holding DAC of Ireland, locally represented by Dr Louis Cassar Pullicino, vs M/V Dominia.

Case summary

The facts of the case may be summarised as follows.

By means of an urgent application to the court, Captain Antonio Cilidonio appearing on behalf of the M/V Dominia as well as on behalf of its owners Morfini SpA requested the revocation of a warrant of arrest issued against his ship.

The applicant based his claim on the fact that the company that owns the vessel affected by the arrest warrant had, in July 2021 filed in the court of Bari, judicial procedures in the context of which that court had ordered a moratorium (temporary prohibition) on the filing of judicial acts against Morfini SpA.

A restructuring plan had been presented to the court in Bari in February 2022. The company’s creditors did not approve the said plan and bankruptcy procedures were initiated. Following a request from Morfini SpA, the court in Bari imposed a ban on the filing of judicial proceedings by the creditors.

Citing local jurisprudence, the Maltese court observed that the procedure in terms of article 281 is essentially limited to what may result from the judicial act itself. The procedure does not reopen the merits of the dispute between the parties.

The court made reference to Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast), specifically to article 8 which states that the opening of insolvency proceedings is not to affect the rights in rem (a right which rests on an object or good) of creditors or third parties in respect of tangible or intangible, moveable or immoveable assets, both specific assets and collections of indefinite assets as a whole which change from time to time, belonging to the debtor which are situated within the territory of another member state at the time of the opening of proceedings.

These rights in rem of creditors, in particular, refer to:

• (a) the right to dispose of assets or have them disposed of and to obtain satisfaction from the proceeds of or income from those assets, in particular by virtue of a lien or a mortgage;
• (b) the exclusive right to have a claim met, in particular a right guaranteed by a lien in respect of the claim or by assignment of the claim by way of a guarantee;
• (c) the right to demand assets from, and/or to require restitution by, anyone having possession or use of them contrary to the wishes of the party so entitled;
• (d) a right in rem to the beneficial use of assets. Furthermore, the right, recorded in a public register and enforceable against third parties, based on which a right in rem within the meaning of the above may be obtained.

The court considered that in the case at hand the credit of Nassau Maritime Holding was secured by a "First Priority Mortgage" and therefore constituted a right in rem attracting the protection of article 8 of the Regulation.

The court also made reference to the local Pre-Insolvency Act, specifically to article 25 (5) of the said Act, which provides for exclusions from stay of individual enforcement actions in relation to, amongst others: (a) any action in rem against a ship or sea vessel; (b) any proceedings that may be instituted by the holder of a registered mortgage or a privileged creditor over a ship or sea vessel, or any other actions or proceedings to which a ship or sea vessel may be subject in terms of the Merchant Shipping Act; and (c) any warrant of arrest, whether in personam or in rem, of a sea-going vessel.

The court strongly disagreed with the applicant’s argument that the order of the court of Bari, following the request by Morfini SpA was applicable or subject to recognition in Malta. In addition to the dubious jurisdiction of the court in Bari in the case of a vessel arrested in Maltese waters, the court noted that the request filed therein by Morfini SpA was never notified to Nassau Maritime Holding.

Neither could the applicant seek refuge in the provisions of Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (recast).

The court also rubbished as superfluous the applicant’s claims of fraud and forum shopping as allegedly perpetrated by Nassau Maritime Holding. It also found as baseless the applicant’s allegation of untimeliness of the executive act, particularly considering that the debt in question had been due for years.

The court therefore proceeded to dismiss the applicant’s request, with costs.

 Dr Keith Anthony Borg, is a partner at Azzopardi, Borg and Associates Advocates