1. EXECUTIVE SUMMARY

1.1 What are the advantages and disadvantages relevant to arbitrating or bringing arbitration-related proceedings in your jurisdiction?

The choice of Malta as a seat of arbitration has become increasingly more popular, mainly due to the following reasons:

  • Malta's arbitration law is closely modeled on the UNCITRAL Model Law on International Arbitration 1985 (with amendments as adopted in 2006) (UNCITRAL Model Law). As such, it is familiar to experienced arbitration practitioners and corporate counsel alike.
  • An arbitral award, once registered with the Malta Arbitration Centre (MAC), constitutes an executive title and can be executed very effi ciently.
  • The availability (and enforcement by the courts) of protective and interim measures are similar to those available in leading arbitration venues.
  • The MAC offers a panel of experienced arbitrators from whom parties may choose, without limiting the choice of arbitrators by the parties.
  • The geographical location of Malta enables it to serve as an accessible, neutral location, and it is very often perceived as an ideal location for the settlement of disputes between European and Northern African companies.
  • Malta is a party to The Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention), and its provisions have been incorporated into domestic law. The courts have generally applied the New York Convention with a pro-enforcement bias.
  • As a seat of arbitration, Malta can be said to provide an exceptionally good cost to quality ratio.

However, Maltese arbitration law does not provide for discovery proceedings, and this may be perceived as a handicap by parties coming from a non-civil law jurisdiction.

1.2 How would you rate the supportiveness of your jurisdiction to arbitration on a scale of 1 to 5, with the number 5 being highly supportive and 1 being unsupportive of arbitration? Where your jurisdiction is in the process of reform, please add a + sign after the number

The jurisdiction is generally supportive of arbitration, and the courts have extensive powers of support (including interim relief) for both domestic and international arbitrations having their seat in Malta. However, some recent court judgments have been inconsistent with Malta's historically pro-arbitration position, hence we would grade the jurisdiction with a score of 3 at the present time.

It seems unlikely that these judgments will be followed in the future and under Maltese law judgments do not constitute binding legal precedent. Therefore, in our opinion, it is very likely that the traditional pro-arbitration approach will be fully restored in the coming months.

2. GENERAL OVERVIEW AND NEW DEVELOPMENTS

2.1 How popular is arbitration as a method of settling disputes? What are the general trends and recent developments in your jurisdiction?

Arbitration is currently a widely used dispute resolution method in commercial matters. An ever increasing number of disputes in insurance, maritime, building and construction, and corporate claims are being resolved by way of arbitration.

2.2 Are there any unique jurisdictional attributes or particular aspects of the approach to arbitration in your jurisdiction that bear special mention?

Chapter 387 of the Laws of Malta (the Arbitration Act) establishes the publicly funded MAC, which acts as the default arbitration registry/secretariat in domestic arbitration and can be selected as the default appointing authority, in international arbitrations having Malta as their seat of arbitration.

2.3 Principal laws and institutions

2.3.1 What are the principal sources of law and regulation relating to international and domestic arbitration in your jurisdiction?

The Arbitration Act and the Arbitration Rules (Subsidiary Legislation 387.01) are the principal legislative instruments regulating arbitration in Malta. The Arbitration Act is modelled on the UNCITRAL Model Law, and the Arbitration Rules are likewise modelled on the UNCITRAL Arbitration Rules 1976 (revised in 2010). The Arbitration Act also incorporates the New York Convention, the Geneva Protocol on Arbitration Clauses of 1923, the Convention on the Execution of Foreign Arbitral Awards 1927 (Geneva Convention) and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States 1965.

2.3.2 Which are the principal institutions that are commonly used and/or government agencies that assist in the administration or oversight of international and domestic arbitrations?

The MAC is the principal institution that oversees the conduct of domestic arbitrations and international arbitrations having Malta as their seat of arbitration. It is run by a publicly appointed board of governors that is responsible for the policy and general administration of the affairs and business of the Centre. The MAC offers not only the necessary facilities for the conduct of arbitration, but also a choice of arbitrator(s) from panels of professionals in different areas of law.

Malta can and does serve as the seat of ad hoc international arbitrations, as well as the seat of institutional arbitrations under the rules of leading arbitration institutions (including the International Chamber of Commerce (ICC) and the London Court of International Arbitration (LCIA)).

2.3.3 Which courts or other bodies have judicial oversight or supervision of the arbitral process?

The superior courts (First Hall Civil Courts and the Court of Appeal, as the case may be) are vested with the powers to stay arbitration proceedings, grant interim relief, hear procedural challenges and make recognition orders. The specific division of powers and jurisdiction of the particular courts depends on the nature of the relief sought. They are regulated by the Arbitration Act and the Code of Organization and Civil Procedure (Chapter 12 of the Laws of Malta), and will be addressed in more detail in the questions below.

To read this Chapter in full, please click here.

Originally published by Thomson Reuters

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.