Transport Malta breached natural justice in attempt to de-register vessels linked to Darren Debono

A court has ruled that Transport Malta acted unreasonably and disproportionately when it moved to cancel the registration of six fishing vessels owned by World Water Fisheries Limited, linked to Darren Debono

The judgement, delivered on Friday, concluded that the authorities failed to give clear reasons for the attempted de-registration, breaching the company’s right to a fair hearing.

The dispute dates back to March 2018, when the Registrar General of Ships informed the company that the vessels risked being struck off the Maltese Ship Registry unless an unspecified “cause” was remedied within one month.

The notices referred only to “the national interest and the interest of Maltese Shipping”, without further detail. Six vessels, Albasel, Marie De Lourdes, Marie De Lourdes III, Marie De Lourdes V, Marie De Lourdes I and Zeus, were affected.

It later emerged, in proceedings linked to a Mandate of Injunction, that the real motivation was the involvement of shareholder Darren Debono, who, together with some of the vessels, appears on a sanctions list issued by the United States Office of Foreign Assets Control (OFAC). The plaintiff company argued that the letters’ vague wording made it impossible to understand or address the authorities’ concerns.

World Water Fisheries submitted that OFAC sanctions have no legal force in Malta, are addressed to US persons alone, and cannot be applied by EU Member States. The company also stressed that Debono is facing criminal proceedings in Sicily that remain sub judice, and that no action has been taken against him or the vessels in Malta. Cancelling the vessels’ registration, the plaintiff said, would have rendered them stateless and put crews and fishing licences at risk.

The defendants maintained that the measure was justified under Article 29 of the Merchant Shipping Act, which allows the minister to de-register vessels in the national interest. They argued that the presence of OFAC-listed vessels under the Maltese flag posed a reputational risk to the registry. The court heard that the Sanctions Monitoring Board (SMB) had recommended urgent de-registration to signal Malta’s commitment to international obligations.

However, testimony from the SMB Chairman confirmed that no United Nations sanctions had been issued against the shareholder or vessels, as the matter is political, and that OFAC designations are not applicable to Malta. He also acknowledged that assessing the national interest fell outside the SMB’s remit. Evidence from vessel captains indicated that the vessels were used solely for fishing and were under continuous monitoring.

The court noted that Minister Ian Borg had played a limited role in the process, merely forwarding the SMB recommendation to the registrar. It held that this fell short of the level of scrutiny required by law, particularly given the wide discretion vested in the Minister. Evidence from the registrar indicated that the Maltese merchant registry had continued to grow throughout the period, undermining the argument of reputational harm.

In its judgement, the court emphasised that administrative authorities must give clear, sufficient reasons when threatening measures as serious as de-registration. A reference to the “national interest”, without explanation, was not enough. The failure to specify the actual grounds deprived the plaintiff of a meaningful opportunity to respond and breached principles of natural justice.

The court therefore declared the attempted de-registration unreasonable and disproportionate. It held that the registrar and minister had no basis to cancel the vessels’ registration and confirmed that the company is free to transfer the vessels or its interests in them.

Costs were awarded against the defendants, including those related to the injunction proceedings.

Judge Ian Spiteri Bailey presided over the case.