Litigation Dispute Resolution Comparative Guide -

1 Legal framework

1.1 What system of jurisprudence applies in your jurisdiction? What implications does this have for litigation?

The Maltese legal system embodies a fusion of different legal traditions. The backbone of Maltese law is founded on continental or civil law. The Civil Code was in fact originally modelled on the French Napoleonic Code. Nonetheless, as a result of British colonial rule, certain areas of Maltese law have been heavily influenced by the common law tradition. For instance, Maltese shipping laws and fiscal and corporate legislation largely mirror the British model. Likewise, administrative law and public law in Malta follow British tradition. The Maltese courts are often guided by, or refer to, English jurisprudence and jurists in relation to matters touching upon these areas.

Maltese procedural law has also been heavily influenced by the common law tradition. Civil and commercial litigation is predominantly adversarial: the respective parties must advocate their case and the judiciary is only permitted to reach its conclusions based upon the evidence produced by the parties.

However, unlike in common law jurisdictions, the Maltese legal system does not recognise legal precedent. Thus, the binding effects of a judgment do not extend beyond the merits of the case decided upon. Nevertheless, the Maltese courts do recognise the authoritative weight of judgments delivered by the Maltese appellate courts.

In addition, following Malta's accession to the European Union in 2004, European legislation forms an integral part of Maltese municipal law.

1.2 What rules govern litigation in your jurisdiction?

The procedural rules governing civil and commercial proceedings are regulated by the Code of Organisation and Civil Procedure (Chapter 12 of the Laws of Malta) (COCP), as well as subsidiary legislation enacted under the auspices of the COCP. The provisions of the COCP generally regulate all procedural aspects and facets of the conduct of civil and commercial litigation, from how court cases are to be conducted to the rules applicable to the production of witnesses, documentary evidence and the various types of acts and applications which may be filed.

1.3 Do any special regimes apply to specific claims?

Specific claims which are presided over by a specialised court, tribunal or board are also subject to most of the procedural rules laid down in the COCP. Indeed, very often the legislative instruments establishing a specialised court, tribunal or board include a generic provision stating that the general rules applicable to the ordinary courts will also apply in the context of proceedings before that specialised court, tribunal or board.

1.4 Which bilateral and multilateral instruments have relevance to litigation in your jurisdiction?

Malta is a signatory to several international, regional (EU) and bilateral instruments affecting the regulation of a plethora of sectors and industries. As one might expect, the provisions of these instruments may have a significant relevance on the substantive merits of a litigious suit.

Malta has also been a signatory to the European Convention on Human Rights since 1987 and is presently a signatory to 116 conventions of the Council of Europe. These instruments have played a large part in the determination of litigants' fundamental rights.

As an EU member state, Malta is also bound by EU legislation, including regulations which are directly enforceable before a Maltese court, as well as directives (which must be transposed into Maltese domestic law). Noteworthy EU regulations include:

the Brussels I Regulation;
the Brussels I Recast Regulation;
the Rome I Regulation;
the Rome II Regulation; and
the Rome III Regulation.

Malta is also a state party to the Hague Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters.

Malta is additionally a party to the New York Convection on the Recognition and Enforcement of Foreign Arbitral Awards, which facilitates the cross-border enforcements of awards delivered abroad.

In addition, Malta is a party to several family law-related international treaties, such as the Hague Convention on Civil Aspects of Child Abduction, which can also affect contentious parties' rights and remedies.

2 Judicial structure

2.1 What courts exist in your jurisdiction and how are they structured?

The Maltese courts are divided into inferior and superior courts. The latter are presided over either by a single judge or by a chamber of three judges; while the former are presided over by a magistrate.

The inferior courts are the Court of Magistrates (Malta) and the Court of Magistrates (Gozo), sitting in their inferior jurisdiction. These hear both criminal proceedings and commercial matters regarding monetary claims of between €5,001 and €15,000. Any pecuniary claims of less than €5,000 are heard by a tribunal (the Small Claims Tribunal).

The rest of the Maltese courts are of a superior jurisdiction.

The Civil Court is divided into four sections:

the General Jurisdiction Section (known as the First Hall of the Civil Court);
the Family Section;
the Commercial Court Section; and
the Voluntary Jurisdiction Section.

The First Hall deals with all matters, civil and commercial, which are not by special provision of law assigned to be tried and determined by another court. The First Hall also handles all cases at first instance regarding violations of constitutional rights. Monetary claims above €15,001 are also determined by the First Hall. In Gozo, being another island forming part of the Maltese archipelago, the jurisdictional competences exercised by the First Hall in Malta are exercised by the Court of Magistrates (Gozo) in its superior jurisdiction. The Family Section, as the name suggests, deals with matters regarding family law. The Commercial Section determines matters regarding corporate law disputes. The Voluntary Jurisdiction Section generally deals with non-contentious matters.

Appeals of judgments delivered by the First Hall are heard by the Court of Appeal in its superior jurisdiction, composed of three judges. Appeals of constitutional cases are heard by the Constitutional Court, also composed of three judges. Appeals of a judgment issued by any other court, board or tribunal are heard by the Court of Appeal in its inferior jurisdiction, which is presided over by one judge.

There is also the Criminal Court, which hears trials by jury; any appeal will be heard by the Criminal Court of Appeal.

2.2 What specialist courts or tribunals exist in your jurisdiction?

Malta has several specialised courts, judicial bodies and tribunals, which have been established to determine specific categories of claims. For instance, the newly established Commercial Section of the Civil Court is considered as a specialised court, as it is tasked with solely determining claims relating to claims revolving around company law disputes.

With respect to real estate rights and claims:

the Rent Regulation Board is competent to hear all matters emanating from lease agreements;
the Rural Leases Control Board deals solely with cases involving rural leases; and
the Land Arbitration Bord is tasked with dealing with claims following the expropriation of land by the government.

There are also specialised tribunals set up to protect consumer rights, such as:

the Consumer Claims Tribunal, which deals with disputes between consumers and traders; and
the Financial Services Tribunal, which deals with disputes involving consumers of financial products.

Contestations regarding administrative decisions taken by the government or any governmental department, body or entirety are heard before the Administrative Review Tribunal.

Another specialised tribunal is the Industrial Relations Tribunal, which deals exclusively with employment-related matters.

While Malta does not have specialised courts in every field of law, the court registrars tends to assign cases to the same judge or judges according to the nature of the claim. Over the years, certain judges have accordingly acquired a wealth of knowledge and detailed technical understanding in certain specialised areas of law (eg, maritime law and IP law).

3 Pre-litigation

3.1 What formalities apply before litigation can be commenced in your jurisdiction?

As a general rule, there are no formalities which need to be adhered to prior to the commencement of litigation and a claim may be filed immediately. However, specific actions may require that certain formalities be adhered to, which will vary depending on the nature of the claim.

In practice, however, it is not uncommon for the plaintiff's lawyer to test the waters by sending the defendant a legal letter outlining the client's demands. This tends to instigate discussions between the parties with a view to finding an amicable settlement.

If the letter is ignored or the discussions break down, the claimant may also send a judicial letter to the defendant, putting it in bad faith. If an agreement or a settlement still cannot be reached, judicial proceedings will be filed in before the competent court or tribunal.

3.2 Do any pre-action protocols or similar rules apply prior to the commencement of litigation? What are the consequences of non-compliance?

In general, no pre-action protocols are required prior to filing a claim; however, in specific circumstances, the law requires the filing of a judicial letter or the initiation of mediation proceedings. For instance, all family law matters require that mediation proceedings be conducted prior to the commencement of an action. Similarly, a claim against the Maltese government and/or any governmental entity or body cannot be filed before 10 days have elapsed since the date on which the government official or entity is served with a judicial letter. Should the plaintiff fail to abide by these specific requirements imposed by law, the action could be declared null and thrown out by the court.

3.3 What other factors should a party consider before commencing litigation in your jurisdiction?

When considering litigation, plaintiffs should be conscious of the costs and court expenses involved, which vary depending on the nature of the claim and the type of action filed. Plaintiffs should also take into consideration the timeframes involved and the probability of a positive outcome.

It is also in the plaintiff's general interest to assess the defendant's financial standing prior to filing any suit, especially in money claims, so as to avoid incurring any further expenses pursuing claims against persons or companies that do not possess sufficient assets to honour any eventual judgment or decision.

4 Commencing litigation

4.1 What rules on limitations periods apply in your jurisdiction?

The applicable rules of limitation depend on the nature of the action or claim being commenced. The respective time bars are scattered among several statutes, including the Civil Code and the Commercial Code. By way of example:

actions for the payment of the following are barred once five years have elapsed since the date on which the obligation fell due:
- a debt arising from a commercial transaction;
- rent of urban or rural property;
- interest on sums taken on loan; and
- the return of money given on loan where this does not result from a public deed; and
actions for damages not arising from a criminal offence are barred once two years have elapsed since the date of the event that gave rise to the damage.

These prescriptive periods may be interrupted, and start to run afresh, upon the service of a judicial act on the party against which it is sought to prevent the running of prescription or the filing of a judicial demand, even if not notified to the other party. Likewise, a time bar will normally be interrupted whenever the debtor acknowledges the debt or makes any payment on account.

In terms of the Carriage of Good by Sea Act, carriers and ships are discharged from all liability in respect of loss or damage falling within the scope of the act unless suit is brought within one year of the date of delivery or the date when the goods should have been delivered. This period may not be interrupted or extended.

Similarly, those time bars found under the Commercial Code cannot be interrupted or extended. For instance, any action involving payment of freight, victuals supplied to seamen or the delivery of goods is barred definitively after one year.

4.2 What rules on jurisdiction and how this is determined apply in your jurisdiction?

Articles 742 and following of the Code of Organisation and Civil Procedure (COCP) lay out the jurisdictional powers and limits of the Maltese civil courts. The Maltese civil courts have jurisdiction to try and determine all actions concerning:

Maltese citizens, provided that they have not fixed their domicile elsewhere;
persons that are domiciled or resident or present in Malta; and
any persons in matters relating to property situated or existing in Malta.

The Maltese courts also have jurisdiction to determine actions concerning persons present in Malta that have contracted any obligation in Malta or that have agreed to carry out an obligation in Malta. Additionally, the Maltese courts have jurisdiction to try and determine actions in relation to obligations contracted in favour of Maltese citizens, residents or companies, provided that the judgment can be enforced in Malta. The Maltese courts will also have jurisdiction over any person that has expressly or tacitly submitted to their jurisdiction.

Notably, Maltese law also provides that the jurisdiction of the Maltese courts is not precluded by the fact that an arbitration agreement exists between the parties. Nevertheless, if arbitration proceedings have already been commenced, the court may opt to stay the judicial proceedings.

In addition to the foregoing, the rules on jurisdiction provided for under EU Regulation 1215/2012 are also directly applicable in Malta. Likewise, the jurisdictional provisions under its predecessor, EU Regulation 44/2001, will also apply in proceedings instituted before 10 January 2015 which would fall within the scope of that regulation.

The Maltese courts may exercise jurisdiction in rem against ships, aircraft and aircraft engines in respect of specific claims, exhaustively listed in the COCP. However, jurisdiction in rem may be exercised only if the relevant asset is physically situated in Malta.

4.3 Are class actions permitted in your jurisdiction?

In terms of the Collective Proceedings Act (Chapter 520 of the Laws of Malta), class actions may be instituted by a class representative in respect of actions under:

the Competition Act;
Articles 101 and 102 of the Treaty on the Functioning of the European Union;
the Consumer Affairs Act; and
the Product Safety Act.

Moreover, the Arbiter for Financial Services Act (Chapter 555 of the Laws of Malta) allows for the collective treatment of individual complaints against holders of financial services licences.

It is also possible in terms of Maltese general procedural law for numerous plaintiffs to commence an action jointly against one or more defendants.

4.4 What are the formal requirements for commencing litigation?

Proceedings are commenced through the filing of an application, which must generally be confirmed on oath by the plaintiff or its representative. This sworn application must clearly indicate the remedies being sought and must include an exhaustive list of witnesses. In some cases, the application may need to be accompanied by a sworn declaration by the plaintiff or its representative. The requisite court registry costs are payable upon filing of the application.

4.5 What are the procedural and substantive requirements for commencing litigation?

Once the action has been instituted and has been appointed for hearing, the defendant must be duly served with the acts of the case. Service is generally effected by the physical delivery of a copy of the pleading to the party on which the pleading is to be served, wherever that party may be. It may also be effected by leaving a copy of the pleading at the place of residence or business of that party. Additionally, the COCP sets out the rules on how service should be effected and the procedures to be followed whenever the normal methods of service are unsuccessful.

Where the defendant is not present in Malta, but is domiciled within the European Union, service may be effected through the modes indicated in EU Regulation 1393/2007 of the European Parliament and of the Council on the service in member states of judicial and extra judicial documents in civil or commercial matters (service of documents), including through postal or courier service.

Where the defendant is present in a contracting state to the Hague Convention of 15 November 1965 on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters, service may be effected through the designated central authority of that contracting state.

Once the defendant has been served with the sworn application, it has 20 consecutive days in which to file a reply/defence together with any counterclaim it may wish to bring.

4.6 Are interim remedies available in your jurisdiction? If so, how are they obtained?

A claimant may obtain provisional security for its claim through the issuance of a precautionary act, which may be applied for even prior to the commencement of any action on the merits. The interim measures available are:

warrant of description;
warrant of seizure;
warrant of seizure of a commercial going concern;
garnishee order;
warrant of impediment of departure;
warrant of arrest of sea vessels; and
warrant of arrest of aircraft.

Each of these provisional measures has a specific purpose and seeks to attack a particular type of asset of a debtor.

In addition, a claimant may seek to obtain a warrant of prohibitory injunction, in order to prohibit the defendant from doing anything which could prejudice the former's rights.

Whenever an interim measure is pursued, the claimant will need to show to the court's satisfaction that it has a claim to bring forward, at least on a prima facie basis. The relevant application for the issuance of any interim measure must be confirmed on oath by the claimant.

Once an interim measure has been obtained, the claimant has 20 consecutive days to commence the action on the merits before the competent court.

4.7 Under what circumstances must security for costs be provided?

Security for costs must be provided whenever a party appeals a judgment or decree given in the context of an action instituted by a sworn application. This security for costs must be deposited in court before the date on which the appeal is set for hearing, in default of which the appeal will be declared to have been abandoned.

5 Disclosure

5.1 What rules apply to disclosure in your jurisdiction? Do any exceptions apply to certain types of documents?

There are no discovery procedures per se under Maltese law. However, the courts are empowered to order a party to disclose documentation where this is required for the purpose of producing evidence or for the enforcement of judgments. The courts are also empowered to exercise their discretion in restricting access to certain evidence, which may be privileged in nature.

5.2 What rules on third-party disclosure apply in your jurisdiction?

It is lawful for a party to a suit to demand the production of documents, which are in possession of third parties in the following cases:

The documents are the property of the party demanding the production thereof or are co-owned by that party;
The party demanding the production shows that it has an interest in such documents, despite not being an owner or co-owner thereof;
The party in whose possession those documents may be does not declare on oath that, independently of any favour for either side, it has special reasons not to produce the documents; or
The documents are public acts or acts intended to constitute evidence in the interest of the public in general.

However, it is not lawful to demand the production of documents which would be deemed exempt in terms of the Freedom of Information Act, including documents that:

would cause, or could reasonably be expected to cause, damage to the security, defence or international relations of Malta; or
would divulge any information or matter communicated in confidence by or on behalf of a foreign government.

Similarly, documents that have been submitted to the Maltese Cabinet, that are an official record of Cabinet or that would involve any deliberation or decision of Cabinet are deemed to be exempt documents.

The courts are empowered to exercise discretion in restricting access to evidence where this would not be in the interests of justice, as is the case with certain banking documents.

5.3 What rules on privilege apply in your jurisdiction? Does attorney-client privilege extend to in-house counsel?

Privileged communications are exhaustively listed in the Code of Organisation and Civil Procedure (COCP). Advocates, legal procurators and clergymen may be compelled to testify only if they have the consent of the client or confessor. This privilege extends to in-house counsel.

Accountants, medical practitioners, social workers, psychologists and marriage counsellors may be compelled to testify only by court order.

Spouses similarly may not be compelled to testify against each other.

5.4 How have technological advances affected the disclosure process in your jurisdiction?

Recent advancements in video-conferencing technology, together with recent amendments to the COCP, now permit the production of evidence to be taken remotely. By virtue of these amendments, any party or witness in a location other than the court itself is nonetheless treated as being present in court for the purposes of those proceedings.

5.5 What specific considerations should be borne in mind during the disclosure process, for both plaintiff and defendant?

It is paramount to consider that anything which is not presented in the acts of the case may not be relied upon by any party at any stage of the proceedings. Therefore, all documents, witness statements and other pieces of evidence must be duly submitted. The court will be barred from taking cognisance of any documentation which is not presented in the court acts.

6 Evidence

6.1 What types of evidence are permissible in your jurisdiction?

All evidence that is relevant to the matter in issue and would be the best evidence that the party may produce is permissible. The court is empowered to disallow irrelevant or superfluous evidence. It is also lawful for the court to require a party to state the purpose of presenting particular evidence.

Witnesses may testify either orally (in court or via video conferencing) or by means of written affidavits. Where a foreign witness resides in another EU member state, the provisions of EU Regulation 1206/2001 on cooperation between the courts of the EU countries in the taking of evidence in civil and commercial matters and the Hague Convention on the Taking of Evidence Abroad in Civil or Commercial Matters (1970) will also apply.

Documents of any nature may also be produced as evidence, provided that they are not considered exempt documents.

Notably, the Maltese courts do not adhere to the doctrine of the forbidden fruit. Nonetheless, however, the courts are empowered to exercise discretion on whether to allow recordings taken without the consent of the recorded person to be admissible as evidence.

6.2 What rules apply to expert evidence in your jurisdiction? What specific considerations should be borne in mind when preparing and presenting expert evidence?

A party may produce an ex parte expert witness where such person is suitably qualified and where the evidence is relevant to the matter. Any such experts must be included in that party's list of witnesses. Generally speaking, ex parte expert witnesses are relied upon to give evidence on matters of a technical nature. That said, however, Maltese law also permits ex parte experts to be produced to testify on matters of foreign law. In such cases, the experts tend to be foreign legal professionals.

The general rules relating to witnesses will also apply to expert witnesses. Accordingly, such persons must confirm any reports under oath and may be subject to cross-examination.

6.3 What other factors should be borne in mind when preparing and presenting evidence in your jurisdiction?

Any witness who testifies in any proceedings remains subject to cross-examination by the other party, where direct and leading questions may be asked to that witness. Where cross-examination is not possible, the testimony of the witness in question may be struck off the records of the court act.

When presenting documentary evidence of foreign witnesses such as affidavits, these must be sworn before a notary (or any other person empowered to take oaths in that jurisdiction) and must also be legalised.

7 Court proceedings

7.1 What case management powers do the courts have in your jurisdiction?

The Code of Organisation and Civil Procedure (COCP) affords wide case management powers to the courts. A judge is permitted to give, at any stage of the proceedings, any order in camera or directive as he or she may deem fit in order:

to ensure full compliance with all matters of procedure;
to seek more detailed information; or
to expedite proceedings or avoid the unnecessary appearance of parties or witnesses.

Moreover, a court is empowered to appoint judicial assistants to facilitate and expedite the production of witness evidence in a case. The general management of court proceedings is also regulated by the Court Practice and Procedure and Good Order Rules, Subsidiary Legislation 12.09, which set out the framework rules on the conduct of the proceedings and on the adjournment of cases, among other things.

7.2 Are court proceedings in your jurisdiction public or private? If the former, are any options available to the parties to keep the proceedings or related information confidential?

Civil and commercial judicial proceedings in Malta are largely held in public. Likewise, any respective court records and any documents in the court file may be accessed by the general public. Nonetheless, the COCP permits a court to order proceedings to be heard behind closed doors where this is requested by both parties involved and upon good cause being shown. Furthermore, it is possible for a party to request leave of the court to present redacted documents or to have certain evidence sealed, due to its sensitive or confidential nature.

7.3 How is the applicable law determined? What happens in the event of a conflict of laws?

Generally, the Maltese courts will apply domestic law to determine any matter being heard before them. However, any of the parties may raise the issue of applicable law in the initial stages of the trial.

Given that Malta is an EU member state, the legal regime regulating matters regarding contractual obligations in civil and commercial matters will be determined by the provisions of the Rome I Regulation (593/2008). With respect to matters regarding non-contractual obligations in civil and commercial matters, the relevant applicable law will be decided pursuant to the provisions of the Rome II Regulation (847/2007). The provisions of these EU instruments can be described as having ‘universal' character and should be applied to any dispute which falls within the scope of the respective regulations, irrespective of the domicile or nationality of the parties involved.

Where the subject matter of the claim falls beyond the scope of the cited regulations, any issue regarding proper law will be determined either by specific choice of law provisions found under different statutes or, in the case of any lacuna, by English conflict of laws rules.

Where a Maltese court determines that the lex causae is a foreign law, the parties will need to bring ex parte expert witness evidence on the position under that foreign legal system (generally by means of legal opinions). The Maltese court will then determine the matter based on what such foreign law provides.

7.4 What rules apply to the joinder of third parties?

A third party may be ordered to be joined in any proceedings being heard by a court of first instance. Such an order must be made by court decree, which may be issued at any stage of the proceedings. While it is usually one of the parties involved in a suit that will file a demand for a joinder, the law provides that a court may issue an order to this effect even in the absence of any specific request.

Once a third party is ordered to join a suit, it will be served with a copy of the court application, and for all intents and purposes of the law, that third party will be considered as a defendant in the proceedings. The law stipulates that a joinder will be entitled to file any written pleadings and raise any pleas and defences which the law affords to defendants. Subsequently, the court will ultimately need to determine whether the claim should be allowed or disallowed with respect to the joinder.

7.5 How do the court proceedings unfold in your jurisdiction? What specific considerations should be borne in mind at each stage of the process, for both plaintiff and defendant?

Proceedings are normally commenced when the plaintiff files its sworn application, which must include, among other things, a statement explaining the nature of the case and the cause of the claim. It is imperative that the plaintiff ensures that its sworn application is accurate. While it is possible to make superficial corrections (eg, typos), it is not possible to subsequently amend anything which could have a material bearing on the substance of the action or on the defences raised.

The sworn application is served on the defendant, which has 20 consecutive days to file its sworn reply indicating its pleas and defences therein. This time period is peremptory and thus it is imperative that the defendant respect it. Failure to do so will result in the defendant being declared contumacious and as such it will be prohibited from submitting any evidence in support of its position. Nonetheless, the defendant will still be permitted to make any legal submissions.

When filing the sworn application or reply, each respective party should list all of its prospective witnesses. This list should be as exhaustive as possible, since, as a rule of procedure, only listed witnesses may be called up to testify.

Following the first hearing, the court will determine any preliminary defences raised. Subsequently, the court will hear all evidence on the merits, afford the parties the right to make legal submissions (written, orally or both), and deliver its judgment on the matter.

7.6 What is the typical timeframe for the court proceedings?

The timeframe to conclude the proceedings will depend on a number of factors, including:

the nature of the action;
the number of parties involved;
whether any preliminary defences have been raised; and
whether the bulk of the evidence is given viva voce (orally in open court) or by means of affidavit.

Suits before a court of first instance typically take between one and three years. If an appeal is filed, it can take several years to be appointed for hearing. Once appointed, the appeal procedure is relatively expedient.

8 Judgment and remedies

8.1 What types of judgments, orders and other remedies are available in your jurisdiction?

Judgments may be final or partial. A final judgment is one where the merits of the claim have been decided upon in their entirety. A partial judgment is usually given in cases where there are several heads of claims or matters which need to be determined separately. By way of example, issues regarding preliminary defences such as jurisdiction or time bars are generally determined by means of partial judgments. A final judgment may be declaratory in nature or may impose an order. In the latter case, a claimant will have sought the recovery of a debt, the award of damages or the performance of any act by the defendant. Conversely, a declaratory judgment is usually sought by a claimant that seeks the court's confirmation as to a certain state of fact, legal title or position at law.

Apart from judgment, the courts may deliver decrees (which are court orders). Different types of decrees may be issued, some of which may be appealed and others which may not. Court decrees usually do not determine the merits, but will entail an order on a specific aspect of the proceedings (usually of a procedural nature).

In terms of other available remedies, a creditor has an array of provisional interim measures to which it may resort to seize the debtor's movable or immovable assets and moneys as security for its claim. Whenever a precautionary act is commenced, the creditor has 20 days within which to commence its action on the merits.

9 Appeals

9.1 On what grounds may a judgment be appealed in your jurisdiction?

In civil and commercial matters, an appeal is available from final judgments of the first court, on both points of law and points of fact. That said, the Court of Appeal will not entertain a re-examination of all facts of the case and as a general rule, the appellate court will not disturb a judgment from the court of first instance on a point of fact, unless there are grave justifications which merit that it does so. Judgments delivered by the Court of Appeal are not subject to further appeal. It is also not possible to appeal a judgment delivered by a court of first instance which was given upon an admission of the claim or where such judgment was accepted by renunciation of the right of appeal.

9.2 What is the appeals process? Is the judgment stayed while the appeal is pending?

As a general rule, an interested party may file an appeal within 20 consecutive days of delivery of the judgment by a court of first instance. The appellant will also be required to deposit security for costs of the appeal. Once the appeal application is served on the respondent, the latter has 20 consecutive days to file its reply. The respondent is also entitled to file a cross-appeal along with its defence to the main appeal. Where a cross-appeal is filed, this must be served on the appellant, which will have a further 20 days from service to file its reply to the cross-appeal.

Subsequently, the parties will need to wait until the Court of Appeal appoints a first hearing. The court will then hear the parties' submissions and subsequently deliberate upon and deliver its final judgment.

However, the litigants may agree to expedite the procedure by filing a joint note in the court acts before the appeal is appointed for hearing, to declare that they do not wish to make any further submissions. In such cases, the appeal will be adjourned for a final judgment, which should be delivered no later than six months from filing of the joint note.

A Maltese judgment which is subject to appeal or does not yet constitute a res judicata will not be provisionally enforceable, unless the claimant applies for and obtains a court order to that effect.

9.3 What specific considerations should be borne in mind during the appeals process, for both plaintiff and defendant?

Where several issues in an action are determined by separate partial judgments, an appeal from any partial judgment may be entered only after the final judgment, unless the party seeking to appeal the decision obtains leave from the court of first instance. Such a request for leave to appeal must be made either:

orally, immediately after the delivery of the judgment; or
by application, which must be filed within six days of the date on which the judgment is read out in open court.

Nonetheless, any judgment relating to issues concerning the jurisdiction of the Maltese courts may be immediately appealed, without the need to seek leave of any court.

10 Enforcement

10.1 How are domestic judgments enforced in your jurisdiction?

Certain judgments may be enforced once 24 hours have elapsed since their delivery. Most judgments, including pecuniary or monetary orders, may be enforced once two days have elapsed since their delivery. Nevertheless, in urgent matters, the courts have the power to order the immediate enforcement of a judgment. Such an order will normally be made in the judgment itself. In cases where the enforcement of a judgment is to be carried out after five years have elapsed since the first day on which judgment became enforceable, the claimant must file an application before the court which delivered the judgment and must therein confirm the nature of the claim and the amount or part thereof which is still due.

A judgment may be enforced against any movables or immovables of the debtor through the issuance of executive acts, including:

the warrant of seizure of movable property;
the warrant of seizure of immovable property;
the warrant of seizure of a commercial going concern;
the executive garnishee order (which is akin to a freezing order);
the warrant of arrest of a vessel; and
the warrant of arrest of an aircraft.

10.2 How are foreign judgments enforced in your jurisdiction?

The procedure to be followed will depend on the jurisdiction in which the judgment in question was delivered. A judgment delivered by a court within an EU member state will generally be enforced through the expedient procedures envisaged under EU legislation, and in particular Eu Regulation 44/2001 (Brussels I Regulations) which is limited to proceedings commenced before January 2015, EU Regulation 1215/2012 (Brussel I Recast Regulation), and EU Regulation 805/2004 (EEO Regulation). These regional instruments have abolished the requirement for the exequatur process, and accordingly a claimant may proceed to immediately enforce a judgment delivered in another EU member state in Malta as long as the requirements of the relevant regulation are fulfilled.

Following Brexit, the enforcement of judgments delivered in the United Kingdom will be regulated by the British Judgments (Reciprocal Enforcement) Act (Chapter 52 of the Laws of Malta). The claimant must file an application before the Court of Appeal to have the judgment registered and ordered enforceable in Malta. This regulates, among other things, the powers of the court in relation to applications of this nature and the grounds upon which the registration and enforcement of a British judgment may be denied.

With respect to judgments delivered in other countries, the claimant will need to follow the procedure provided for under Articles 826 and following of the Code of Organisation and Civil Procedure. The claimant must file an application before the court requesting that it order recognition and enforcement of the judgment in Malta. However, such enforcement will be limited to judgments which constitute a res judicata.

10.3 What specific considerations should be borne in mind during the enforcement process, for both plaintiff and defendant?

As a rule, a defendant cannot oppose the enforcement of an executive warrant or garnishee order until after it has been executed. The only challenge which may be put forward by a defendant is to try to have the warrant or garnishee immediately impugned on the basis that there is a material error or shortcoming in the form of the executive act itself.

It is also worth noting that the various executive warrants and the executive garnishee order all target specific assets of a debtor. It is often the case that a plaintiff will resort to filing more than one executive act to improve its chances of seizing enough assets to get paid. It is therefore always advisable that a plaintiff first try to assess what assets the defendant owns, in order to be in a better position to determine which warrants and order it should seek to obtain to enforce its judgment.

11 Costs, fees and funding

11.1 What costs and fees are incurred when litigating in your jurisdiction?

Court costs and judicial fees are calculated according to statutory tariffs found in the Code of Organisation and Civil Procedure (COCP). These costs and fees tend to increase based on the value of the claim. The higher the claim value, the higher the associated court costs and fees.

11.2 Are contingency fees and similar arrangements permitted in your jurisdiction?

Maltese law strictly prohibits success fees or contingency fees arrangements with respect to judicial or litigious matters. The Maltese Civil Code provides that stipulations quotae litis are void. Likewise, the COCP states that advocates shall not, directly or indirectly, enter into any agreements or stipulations quotae litis.

That said, there is nothing in the law which precludes such arrangements from being made in the context of extra-judicial assistance.

11.3 Is third-party funding permitted in your jurisdiction?

Third-party funding is not prohibited under Maltese law. However, the arrangement may not involve the legal representatives of either party. A third-party litigation funder will not be considered a party to the proceedings, unless it has been assigned or subrogated into the rights of a party. Accordingly, the court will not make any orders directed at the third-party financier, such as to pay a successful adverse party's costs.

11.4 What other strategies should parties consider to mitigate the costs of litigation?

Maltese law offers claimants an array of different judicial tools and remedies. A claimant should seek to explore these avenues prior to commencing a full-blown action on the merits. By way of example, under certain circumstances, it may be possible for a claimant to open special summary proceedings, which are cost-efficient and expedited proceedings. Likewise, there are several EU instruments which are often resorted to as an alternative to a trial (eg, the European payment order).

12 Trends and predictions

12.1 How would you describe the current litigation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

COVID-19 has had a devastating impact on almost all sectors of business. Consequently, many businesses have been struggling to stay afloat. It is therefore anticipated that over the coming year, there will be a surge in companies resorting to company recovery procedures, in order to obtain a moratorium with respect to creditors' claims and gain some time to get back on their feet.

As a result of COVID-19, the Maltese courts had to be shut down for several months. While the courts have now reopened, pending litigation faces numerous delays relating to the pandemic, as adjournments were sought when interested parties were in quarantine. Consequently, many courts have started conducting virtual sittings and, in view of global flight restrictions, are allowing cross-examinations to be carried out online.

The Maltese government has already confirmed that it will shortly be enacting legislation to regulate holistically the use of virtual sittings and online technology. Hopefully, this new legislation should significantly expedite court proceedings in Malta and reduce potential costs for the parties (eg, by cutting out any travel costs for witnesses).

The government is also exploring the possibility of modernising the court filing system, as current practices are regarded by most as somewhat archaic. This would ensure that litigants have a better overview of their case management.

On a different note, and as a direct result of a series of recent constitutional judgments relating to real estate, it is anticipated that in the coming years, there will be an influx of similar cases instituted by property owners to better safeguard their position.

13 Tips and traps

13.1 What would be your recommendations to parties facing litigation in your jurisdiction and what potential pitfalls would you highlight?

One potential pitfall which litigants should bear in mind relates to legal interest, particularly in the case of monetary judgments. If the claim requested is a liquidated and due debt, legal interest at a rate of 8% will accrue from the due date and will continue to accrue until payment is made in full. In the case of sums liquidated by the courts, legal interest will accrue from the date of the first judgment until payment is made in full. Moreover, the fact that an appeal has been filed will not in itself stop legal interest from accruing

For monetary claims, creditors should also assess the financial position of the debtor to ensure that, in the event of a favourable judgment, it has sufficient assets against which a judgment may be enforced.

Anyone contemplating litigation should further take into consideration:

the timeframes involved and how they may affect the potential claimant's short and long-term plans; and
whether its intended outcome from the case falls within the parameters of the law.

Co-Authored by Adrian Attard

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Malta: Litigation Dispute Resolution Comparative Guide