Insights

Introduction

On the 10 May 2023, the Court of Appeal in its Inferior Jurisdiction, presided by the Honourable Judge Mr. Mark Chetcuti, in the names Malta Boatmen & Mooring Services Co-Op Limited vs. Awtorita’ għat-Trasport f’Malta, decided against the defendant’s request for the retrial of the judgement given by the Court of Appeal in its Inferior Jurisdiction, in the abovementioned names, presided differently by the Honourable Judge Mr. Lawrence Mintoff, on the basis that the grounds indicated were inapplicable and further awarded damages in favour of the plaintiff company.

First Hearing before the Arbitral Tribunal

On the 1 November 2012, the abovementioned parties entered into a contract wherein Malta Boatmen & Mooring Services Co-Op Limited (hereinafter referred to as the ‘Co-Op’) bound itself to provide mooring services to the Authority of Transport in Malta (hereinafter referred to as “Transport Malta”).  Subsequently, the Co-Op initiated proceedings before the Arbitral Tribunal on the basis that Transport Malta had breached their duties and obligations by allowing, on several occasions, third parties to carry out mooring works on two ships, namely ‘St. John Paul II’ and ‘Jean de la Valletta’, whilst docked at ‘Deep Water Quay 5’. The Co-Op pleaded that this was not only in breach of the contract, but was also prejudicial to it and thus requested that damages be liquidated and paid by Transport Malta.

The crux of the matter lies in the fact that the contract between the parties contemplated an exclusivity clause which allowed the Co-Op to provide mooring services to the ships docked at the ports (as listed in the annex to the contract). Moreover, the Co-Op was of the view that in order to provide its mooring services, the pilot or master of the ship need not be present at the time. Transport Malta, on the other hand, was of the opinion that the Co-Op was only authorised to carry out its services when the pilot, master or any other authorised personnel was aboard the ship. The Arbitral Tribunal took cognisance of the fact that the contract was entered into following the promulgation of Legal Notice 253 of 2012 (the “Legal Notice”), which regulates mooring services provided at terminals that accommodate ships which are obliged to navigate under the direction of a pilot. However, it further noted that Transport Malta’s view that the Co-Op may not carry out its services when the pilot or master are not aboard the ship, is incorrect and contrary to what was agreed to in the contract. The Arbitral Tribunal decided in favour of the applicant company and further liquidated the of damages to be paid by the defendant.

Appeal Proceedings before the Court of Appeal in its Inferior Jurisdiction

Transport Malta felt aggrieved by the arbitral award given and initiated appeal proceedings before the Court of Appeal in its Inferior Jurisdiction, presided over by the Honourable Mr. Lawrence Mintoff, on the 21 December 2021, whereby it requested the Court to cancel the arbitral award given on the basis that the interpretation of such contract by the Arbitral Tribunal was not done in light of Legal Notice 253 of 2012 and that such misinterpretation constitutes a point of law which may be appealed  before this court.

In its defence, Transport Malta made reference to articles 1(2) and 3(1) of the Legal Notice and further to article 4A(2) of the Maritime Pilotage Regulations (Subsidiary Legislation 499.26 of the Laws of Malta), and noted that although the Arbitral Tribunal recognised the validity of the Legal Notice, in its considerations, it had wrongly extended the validity of the contract to ships which were covered by that same legislation and that thus the contract was wrongly interpreted.

In its deliberation, the Court of Appeal presided over by the Honourable Mr. Lawrence Mintoff, noted that the Arbitral Tribunal’s decision was based on the idea that such contract constituted ‘law’ between the same parties. It was further highlighted that although the parties were aware of the entry into force of the Legal Notice, they had specifically agreed that the applicant company is to exclusively provide mooring services even in the absence of a pilot, a captain, or other authorised personnel aboard the ship.

In cognisance of the above, the Court of Appeal, on the 14 September 2022, declared the appeal null and held that although article 992(1) of the Civil Code (Chapter 16 of the Law of Malta) states that contracts legally entered into shall have the force of law for the contracting parties, this does not mean that the parties to a contract have a right to appeal from every interpretation of the law, as is outlined in article 70A(1) of the Arbitration Act, Chapter 387 of the Laws of Malta. The Court of Appeal further noted that the legislator in drafting such article wanted to create parameters within which an appeal may be made and that thus one has a right to appeal only when a question on the interpretation of a law arises, and not when a question on the interpretation of a contract between two parties arises.

On this note, the Court of Appeal decided in favour of the plaintiff company and ordered Transport Malta to pay the damages which had been previously liquidated by the Arbitral Tribunal.

Retrial Proceedings

Transport Malta went a step further with this matter and initiated retrial proceedings, in order to have the judgement given by the Court of Appeal presided by the Honourable Judge Mr. Lawrence Mintoff cancelled, reheard and reconsidered by the same court, presided differently. Retrial proceedings were brought on the basis of articles 811(e) and 811(l) of the Code of Organisation and Civil Procedure, Chapter 12 of the Laws of Malta (hereinafter referred to as “COCP”).

With respect to article 811(e) of the COCP, Transport Malta reiterated their argument that the contract should have been interpreted by the Arbitral Tribunal, and Court of Appeal. in light of the Legal Notice. The Court of Appeal, presided by the Honourable Mr. Mark Chetcuti (the “Retrying Court”) noted that a request for retrial based on article 811(e) implies that the judgement given by a previous court, was based on the wrong application of the law and that another law should have been applied instead of the one which was applied by the Court. Moreover, it was stated that in such circumstance, the party requesting the retrial is to further indicate the correct law which should have been applied. Consequently, Transport Malta held that the Court of Appeal had wrongly applied article 70(1) when making reference to what constitutes an appealable point of law. The Retrying Court disagreed with Transport Malta but acceded to the fact that this may have been applied restrictively. Nonetheless, the Retrying Court held that article 811(e) is inapplicable as the correct law was applied, albeit wrongly.

Furthermore, during retrial proceedings, Transport Malta also noted that the judgement given by the Court of Appeal in its Inferior Jurisdiction was the effect of an error of fact as per article 811(l) of the COCP. Such argument was brought on the basis that the judgement was given on the supposition that the basis of the case and subsequent appeal regarded solely the wrong interpretation of the contract and failed to consider the Legal Notice. Article 811(l) of the COCP states that there shall be deemed to be an error of fact when such error stems from the records or documents of the case. The Retrying Court here noted that the error of fact must be of a material nature and not an error of interpretation and further stated that in the case at hand, Transport Malta had based their appeal before the Court of Appeal on the Tribunal’s misinterpretation of the contract and that thus, such error of interpretation does not fall within the scope of Article 811(l) of the COCP. Therefore, on 10 May 2023, the Retrying Court dismissed Transport Malta’s request to have the judgement in the above names cancelled.

Conclusion

Considering the above, it may be held that at all three instances; the Arbitral Tribunal, the Court of Appeal in its inferior jurisdiction and the Retrying Court all decided in favour of the plaintiff company, whilst awarding damages to the plaintiff company and imposing costs on the defendant.

Disclaimer: Ganado Advocates is responsible for contributing this law report but was not in any way involved as legal advisor for the parties in the judgement being covered in this law report.

Giannella Vella is an Advocate at Ganado Advocates.

This article was first published in the Malta Independent on 17/05/2023.