On the 13 October, 2021, the Court of Appeal (Inferior Jurisdiction) (the “Court”), presided by the Honourable Mr Justice Lawrence Mintoff, in the case of Jean Luke Azzopardi  (the “Complainant”) versus BNF Bank p.l.c.  (the “Bank”), upheld the Bank's request to cancel and revoke a decision of the Arbiter for Financial Services (the “Arbiter”) established under the Arbiter for Financial Services Act (Chapter 555, Laws of Malta) (the “Act”). The Arbiter had previously determined that he was competent to take cognisance of a complaint brought by the Complainant in respect of the Bank's conduct. In handing down judgement, the Court delved into important legal considerations relating to the competence of the Arbiter in terms of the Act.

Relevant Facts of the Case

The Complainant sent a legal letter to the Bank to formally notify it of his disagreement with the Bank's decision to prohibit him from withdrawing funds from a bank account held in his name with the Bank (the “Account”).

The Bank replied to the Complainant's letter, explaining that the Bank was disallowing withdrawals from the Account given that the funds deposited in the Account (i) represented income received from the employer of the Complainant's mother, therefore belonging to the Complainant's mother, and (ii) were subject to two garnishee orders issued by the Courts of Justice which were also duly served upon the Bank.

The Complainant subsequently filed a complaint before the Arbiter, noting that while he received funds from his mother within the Account on a regular basis, the Bank was not allowing the Complainant to withdraw funds from the Account, presumably in view of the garnishee orders which were in force in respect of the Complainant's mother. The Complainant was adamant that the funds held in the Account were his and did not belong to his mother and/or the Bank; he therefore requested the Arbiter to order the Bank to permit withdrawals from the Account.

In reply to the complaint, the Bank argued, inter alia, that it always acted in good faith and in accordance with the orders of the Courts of Justice. It also pleaded that, in this context, only the Courts of Justice are competent to decide whether the Bank may release the funds subject to the garnishee order in favour of the Complainant, and that, therefore, the Arbiter did not possess the competence to take cognisance of the complaint.

The Arbiter's Decision

In his decision of the 22 June, 2020, the Arbiter initially considered the preliminary plea raised by the Bank relating to the Arbiter's lack of competence. The Arbiter disagreed with the Bank's line of thinking in this regard, and decided that the Arbiter was indeed competent to take cognisance of the complaint. The Arbiter explained that his decision was motivated by the relevant provisions of the Act setting out the conditions which must be satisfied in order for the Arbiter to be competent to hear a complaint. In his decision, the Arbiter made reference to the following non-exhaustive conditions emanating from the Act on the matter:

  • the complaint must be instituted by an ‘eligible customer' (as defined by the Act);
  • the complaint must relate to the conduct of a ‘financial services provider' (as defined by the Act) which occurred on or after the 1 May, 2004; and
  • the conduct complained of is not, or has not been, the subject of a lawsuit before a court or tribunal initiated by the same complainant on the same subject matter.1

The Arbiter noted that since the above-mentioned conditions were satisfied, and that the Bank failed to (i) submit any evidence before the Arbiter in support of the plea of lack of competence, and/or (ii) indicate the relevant provisions of the law which, in the Bank's view, exclude the competence of the Arbiter, the Arbiter rejected the Bank's plea and found that he had the competence to hear and decide upon the complaint.

The Arbiter concluded that the complaint was fair, equitable and reasonable in the context of the substantive merits of the case, and ultimately upheld the Complainant's complaint.


The Bank felt aggrieved by the decision of the Arbiter and lodged an appeal before the Court, requesting the Court to cancel and revoke the Arbiter's decision noted above on the grounds that the Arbiter (i) should not have had the competence to hear the Complainant's complaint, and (ii) interpreted the law and the relevant facts erroneously.

Legal Considerations

The Court proceeded to establish whether the Arbiter had the competence to hear and decide upon the complaint.

The Court made it clear that the Arbiter is not responsible for reviewing each and every conduct of a financial services provider; otherwise, it noted, the Act would have provided the Arbiter with exclusive competence in this regard.

The Court also noted that the fact that the complaint found its roots in two garnishee orders issued in respect of the Complainant's mother cannot be negated; it explained that the complaint would not have been necessary but for the existence of such garnishee orders.

The Court stressed that since garnishee orders issued by the Courts of Justice were in place, and only the court issuing the order has the power to revoke it, it is that same court which is empowered to provide any necessary direction in respect of such garnishee order. It emphasised that no other authority (including the Arbiter) may decide upon matters relating to a garnishee order issued by a court.

The Court further noted that as the Bank was well aware of the particular circumstances of the case, it agreed with its approach to prohibit withdrawals from the Account before the Complainant sought further clarity on the matter from the Courts of Justice which had issued the garnishee orders.

Court's Decision

In light of the above considerations, the Court upheld the Bank's first ground of appeal (relating to the plea of the Arbiter's lack of competence), abstained from taking cognisance of the Bank's second ground of appeal, and effectively cancelled and revoked the Arbiter's decision and rejected the Complainant's complaint.


1 Note that the relevant provisions of the Act setting out this condition were amended following the date of the Arbiter's decision (Act XVIII of 2021 refers).

Originally Published by The Malta Independent

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