Insights

Cases involving the application of the Council Regulation (EC) No. 1346 / 2000 (the ‘Regulation’) have been rare before the Maltese Courts since Malta joined the European Union in May 2004. Thus far, the only instance where an issue involving the interpretation of the Regulation arose involved a maritime case – The Foreign Economic Technical Co. Operative Company of China et vs m.v. Beluga Sydney (Civil Court, 30 November 2011) – where  the arrest of the vessel “Beluga Sydney” was challenged by a German Insolvency Administrator who filed an application requesting an order to lift the arrest and authorisation to take possession of the vessel. The Court had rejected the application and ordered the continuation of enforcement proceedings and the judicial sale of the vessel.

In a judgment delivered on 26 February 2019 by the Civil Court (Commercial Section) in the case Malaysia Debt Ventures Berhad vs Picsel International Limited, the Court was originally dealing with an application by a creditor to declare the defendant company insolvent. During the course of the proceedings, the creditor also activated secondary proceedings in Scotland which proceedings however were eventually converted into main proceedings by the Scottish Court since it resulted that the debtor company had its centre of main interests in Scotland. This decision of the Scottish Court, in turn, necessitated the conversion of the Maltese proceedings into secondary proceedings within the framework of the Regulation. Article 27 of the Regulation provides that the opening of proceedings by a Court of a Member State, of which main proceedings are recognised in another Member State, shall permit the opening of secondary proceedings being examined in that other State and such proceedings shall be restricted to the assets of the debtor situated with the territory of that other Member State. Accordingly, the Court determined the assets forming part of the Maltese assets and ordered that the Official Receiver should take all appropriate steps in accordance with the Regulation to transfer such assets to the Liquidator nominated in main proceedings.