Maltese court has jurisdiction of vessels found in Malta’s territorial waters

The jurisdiction of the courts is generally applicable when the matter relates to property that is situated in Malta. The same provision also applies to movables as long as the movable is located in Malta and the merits of the case concern precisely that movable.

This was held in a decision delivered by the First Hall Civil Court in Lawyer Cedric Mifsud in his name and in representation of the foreign company Adria Yachting N.V. vs Stephan Cristoph Schlosser, by Madam Justice Anna Felice on 14 December 2023.

During these proceedings, the Court was requested by the defendant to deliver a decision on a preliminary plea based on jurisdiction.

The case involved a dispute over the ownership of the ship S/Y Adria, which was situated in Maltese territorial waters. The plaintiff, Adria Yachting N.V., had instituted proceedings against the defendant for the return of the ship. On 19 June 2012, the plaintiff had authorised the defendant to act as the captain and representative of the ship. On 9 October 2019, the plaintiff terminated this agreement. The defendant, however, kept possession of the vessel without authorisation leading the plaintiff to file for a precautionary warrant for the arrest of the vessel in Maltese territorial waters. Furthermore, the plaintiff requested the Court to declare the defendant responsible for any damages the plaintiff incurred due to this action by the defendant and to liquidate damages accordingly.

The defendant argued that this case should be declared null because the defendant was not present in Malta when the case was presented. The defendant claimed that since he lives in Germany, a procedure for notification based on Regulation E.C 1393/2007 should have been performed. Furthermore, the defendant stated that this Court lacks competence in this case as he is not one of the persons listed under Article 742 of the Code of Organisation and Civil Procedure, Chapter 12 of the Laws of Malta. In addition, the defendant, referring to Article 742B(a), claims that he is not the legitimate opponent in this case, and this is because the claims of the plaintiff concern the ownership and the title of the vessel. Therefore, the plaintiff should have proceeded with an action in rem (against the ship) and not against him.

On 16 March 2022, the defendant filed an additional plea whereby he challenged the jurisdiction of this Court to preside over the case in question-based on Article 730 of the Code of Organisation and Civil Procedure. The main argument raised by the defendant regards a Novation Agreement signed on 24 April 2018 between Altra Foundation and the defendant expressly stating that exclusive jurisdiction in matters relating to the said agreement shall lie with the Court in Zurich.

The court examined the Novation Agreement and determined that it did not specifically address the vessel in question but was limited to debts between the parties. Since the plaintiff was not a party to the agreement, the court concluded that the only remedy for the plaintiff to enforce claims on the vessel was to institute proceedings against the defendant.

The court then considered the jurisdictional issue, referring to Article 742(1)(c) of the Code of Organisation and Civil Procedure, which grants Maltese civil courts jurisdiction over matters concerning property situated in Malta. The court noted that, in previous jurisprudence, the jurisdiction provision also applied to movables as long as the movable was located in Malta, and the merits of the case concerned that movable.

In rejecting the defendant’s additional plea challenging jurisdiction, the court emphasised that the primary issue in the proceedings was the ownership of the vessel. Since the vessel was located in Maltese territorial waters, and the primary remedy sought by the plaintiff was the return of the vessel, the court declared that it had jurisdiction in the case and ordered the continuation of the proceedings.