The First Hall Civil Court presided by Mr Justice Joseph Zammit McKeon on April 25, 2018 in the case “World Water Fisheries Limited vs Registrar General of Ships and the Minister of Transport and Infrastructure” held among other things that that the good reputation of the Malta Flag would not be compromised, if applicant were permitted to contest the merits of defendant’s decision to delete its five Malta registered vessels. It said that appellant would suffer disproportionate harm and accordingly the Court accepted applicant’s request to issue the injunction to prevent the deletion of the vessels from the Malta flag.
The facts in this case were as follows:
Darren Debono was one of the shareholders of the Company, World Water Fisheries Ltd which was the registered owner of five fishing vessels, all registered under the Malta Flag: Mv Albasel, mv Marie De Lourdes, mv Marie De Lourdes II, mv Marie De Lourdes V and mv Marie De Lourdes I.
After Darren Debono was arrested in Italy and charged with the illegal importation of fuel into Italy from Libya (these criminal proceedings were still pending against Darren Debono), Transport Malta gave one month notice to cancel all five vessels from the Malta flag.
Faced with this situation, the Company took legal proceedings against the Ministry of Transport, requesting the issuance of an injunction to prevent the deletion of these vessels until the merits of the claim was determined.
Transport Malta maintained that it had to take these measures in the national interest and to safeguard the reputation of the Malta Flag, especially in view of the changes taken against Darren Debono. It said that the reputation of the Malta Flag which was acquired over the years should not be tainted by Darren Debono. Allegedly, Darren Debono acts violated sanctions of the United Nations Security Council as well as US Sanctions which prohibited the illicit and unauthorized exportation of fuel from Libya.
Transport Malta maintained that it had every right to delete these five vessels from our Shipping Register.
The First Hall Civil Court considered Article 873 of Chapter 12 of the Laws of Malta. In the first place the applicant had to show that the injunction was necessary to protect his rights and that prima facie he had such right.
Reference was made to the Court of Appeal decision of 14th July 1988 in Grech pro et noe vs Manfre (Vol LXXII.II.290)
“...huwa rekwizit oggettiv u mhux soggettiv, ma jiddependix mill-element diskrezzjonali tal-gudikant, jew il-jeddijiet jidhru ‘prima facie’, ma’ l-ewwel daqqa t-ghajn, jew ma jidhru xejn, ghall-finijiet tal-hrug tal-mandat.
Hemm imbaghad is-subinciz (3) li jaqra hekk –
Il-qorti m[‘ghanda tohrog ebda mandat bhal dak kontra l-Gvern jew awtorita mwaqqfa bil-Kostuituzzjoni jew xi persuna li jkollha kariga pubblika fil-kariga ufficjali taghha kemm- il darba l-awtorita jew il-persuna li kontra taghha jintalab il-mandat ma tikkonfermax fil-qorti bil-miftuh li l-haga li qed tintalab li tigi mizmuma tkun fil-fatt mahsuba li ssir, u l-qorti tkun sodisfatta, wara li tisma l-ispegazzjonijiet moghtija, li kemm-il darba ma jinharigx il-mandat, il-pregudizzju li jinholoq lil min ikun qed jitlob il-mandat ikun sproporzjonat meta mqabbel mal-istess ghemil tal-haga li qed tintalab li tigi mizmuma.”
The Court also had to consider whether applicants would suffer disproportionate harm if the injunction were to be refused.
The Court noted that the elements to justify the issuance of a warrant of injunction were cumulative. This meant that if one of the elements did not exist, the Court was obliged to reject the request for the issuance of the warrant.
In these proceedings, it was not the task of the Court to determine the rights of the parties on the merits. The fact that it issued the warrant did not mean that the applicant did have such rights; nor did it mean that if the request was rejected that the alleged right did not exist. The consideration of the Court was limited to determine whether the injunction should be issued. In addition, the warrant of injunction was an exceptional remedy and it was not possible for a warrant to be issued if the alleged damage could be rectified in another way.
The Court considered that:
- If this Court would not accept to issue the warrant, the defendants would proceed to delete the five vessels.
- It resulted that OFAC indicated Darren Debono and suggested close monitoring of applicant’s vessels:
On 03rd March 2019 the Malta Sanctions Monitoring Boars stated:
“The SMB is therefore calling for special attention regarding the decision taken by the OFAC, considering that Maltese national and legal persons, entities and bodies feature on the list. The SMB strongly recommends that all economic operators and financial institutions in the Republic of Malta exercise enhanced due diligence when dealing with the persons, entities and bodies listed by the OFAC and with assets belonging to these persons, entities and bodies. Economic operators and financial institutions should closely monitor and record the activities and transactions carried out by the persons, entities and bodies on the list and ensure that they keep an up to date record of all assets, funds and economic resources held by the said persons entities and bodies with them.”
On 06th March 2018 however, the Chairman of the Sanction Board wrote to the Transport Minister:
“The Board’s recommendation is for Transport Malta to actively consider the de-flagging the mentioned vessels in terms of Article 29 of the Merchant Shipping Act – in doing so Malta would be sending a strong message, nationally and internationally on matters relating to the observance of international law.”
It was clear that the order of Transport Malta to delete the vessels was based upon Article 29 of the Merchant Shipping Act.
The vessels Albasal, and Maria de Lourdes III even if owned by the applicant Company were not implicated, in the illicit exportation of fuel from Libya. The Court said, therefore that the applicant company had prima facie, the right to request the issuance of the warrant in respect of these two vessels.
The Court disagreed with the Sanctions Monitoring Board. It should not have recommended that the vessels be deleted from the Malta Flag, without giving reasons. Originally on 03rd March 2018 it had called for special attention, enhanced due diligence and close monitoring and recording of activities.
The Court felt that applicants had a prima facie right to prevent the deletions of these five vessels and to contest the action of defendants. Applicant had to follow up by filing legal proceedings under Article 409A Chapter 12.
The forced deletion of the vessels would have serious consequences. In this case, this Court was satisfied that it was necessary for applicant to obtain this injunction. The applicant had no other remedy other than contesting the merits that these five vessels should not be deleted from the Malta Flag.
In addition, the Court was of the opinion that the damage applicant would suffer would be disproportionate in the circumstances. There were several people employed on these vessels. None of these were under investigation or charged of any offence. The deletion of these vessels would make these vessels “stateless”.
If they had no flag, these vessels would also lose all their rights, including its fishing licence, which was very valuable in the EU. In this regard, the Court maintained that the Transport Minister was taking draconian measures, which were also premature, in particular when criminal proceedings against Darren Debono were still pending, and he was still presumed to be innocent, until proven guilty.
For these reasons, this Court concluded that the good reputation of the Malta Flag would not be compromised, if applicant were permitted to contest the merits of defendant’s decision to delete these five vessels. It said that appellant would suffer disproportionate harm and accordingly accepted applicant’s request to issue the injunction to prevent the deletion of these five vessels.
Dr Karl Grech Orr – Partner at GANADO Advocates