The First Hall of the Civil Court, presided over by Mr Justice Raymond C. Pace, on June 12, 2012, in the case “Malta Towage Ltd vs Dr Adrian Camilleri and legal procurator Victor Bugeja as deputy curators of M/T Fendercare Independence now called m/t Grampian Dee” held, among other things, that, as the vessel had departed and the deposit had been withdrawn, it had no jurisdiction to hear and decide this action in rem. An action in rem, by necessity, required the presence of the vessel in Maltese territorial waters or, at least, after the arrest of the vessel, the deposit of the amount in the Court Register to permit the vessel to leave Malta.

The facts in this case were as follows:

The curators argued that this lawsuit appeared to be an attempt by Malta Towage Ltd to try and obtain payment from the buyers Fendercare Marine Ltd and it remained to be seen whether Malta Towage’s claims were genuine, legal and due

The Malta company Malta Towage Ltd filed an action in rem against the vessel M/T Fendercare Independence – now called M/T Grampian Dee (IMO No. 7342380) – on February 22, 2010.

In rem is a legal term describing the power a court may exercise over property (either real or personal) or a “status” against a person over whom the court does not have “in personam jurisdiction”.

At the time of the presentation of the lawsuit, the vessel was not in Malta.

The company said that it was engaged by Britannia Shipping International Ltd to carry out works on the vessel. These works consisted of construction, repair and conversion of the said vessel, which works were itemised in more detail in its invoice, which it attached.

The works were carried out between July 2, 2009 and September 12, 2009. Malta Towage claimed that it had a right of action in rem against the vessel under Article 742 B (p) of Chapter 12 of the Laws of Malta.

Subsequently the vessel was transferred to new owners and the company was still not paid for its work. Malta Towage Ltd contended that it had a right to take action directly against the vessel in order to safeguard its rights for payment.

Faced with this situation, it filed legal proceedings against the vessel, asking the Malta courts:

• To declare that the vessel was responsible for payment of the works;

• To liquidate the amount; and

• To condemn the vessel to pay this amount with interests from the date when the works were completed up to the date of effective payment.

Lawyer Adrian Camilleri and legal procurator Victor Bugeja were appointed to represent the vessel as curators.

In reply the curators pleaded that Malta Towage’s claims should be dismissed. It was submitted that:

• The Malta Courts of Justice did not have jurisdiction in rem over the vessel, as the vessel was not in Malta; re Ghirxi vs Rodente (Com) dated October 9, 1997; Mifsud vs Migliori (Com) dated October 22, 1923.

• The essential requisites for an action in rem against a vessel as contemplated in Article 742 B of Chapter 12 were not satisfied. An action in rem against the vessel could not succeed and, in this respect, the court should dismiss Malta Towage’s legal action.

• The present owner of the vessel (Fender Care Marine Ltd) was not responsible in persona to Malta Towage. It was not the relevant person as required by Article 742 D. The relevant person was Britannia Shipping International Ltd with whom Malta Towage contracted and which was the owner of the vessel at the time of the occurrence of the cause of action.

As regards the merits, the curators disputed the value of the works and the period when they were carried out. No sum, it was argued, was due. Besides, Malta Towage had the burden of proof and it had to prove its allegations.

The curators argued that this lawsuit appeared to be an attempt by Malta Towage Ltd to try and obtain payment from the buyers Fendercare Marine Ltd and it remained to be seen whether Malta Towage’s claims were genuine, legal and due.

On June12, 2012, the First Hall of the Civil Court declared that it lacked jurisdiction in rem to decide this case. The following reasons were given for the court’s decision.

Claim: The court considered that this was an action in rem by Malta Towage Ltd against the vessel, for payment of alleged repairs and works which were made on the vessel. Malta Towage also requested the court to determine and assess the value of the works, even if its invoice amounted to €28,670.

The vessel was later transferred to Fendercare Marine Ltd on September 14, 2009. It resulted that the vessel was arrested in Malta. A deposit and bank guarantee in court were made to clear the vessel from arrest.

On June 14, 2010 the court ordered Malta Towage to file a €6,000 guarantee within two weeks. As no guarantee was given on July 2, 2010, an application was filed by the vessel to authorise it to withdraw the amount. The court accepted its application on August 26, 2010 and funds were withdrawn on September 22, 2010.

Location of vessel: The vessel was not in Malta at the time these legal proceedings were filed nor was it in Malta today. The court noted that jurisdiction in rem of the Maltese courts was based on a number of factors:

1. Whether the claim was a cause of action listed in the law;

2. Whether the action was brought against the vessel as the defendant in the suit;

3. The vessel had to be in Maltese territorial waters;

4. The vessel had to be arrested or prohibited from leaving Malta, throughout the court proceedings, even if the amount claimed had not been deposited. In this way, the court decision could be enforced re: Dr K. Dingli noe vs Capt. Sebastian Pizzimenti pro et noe (PA, DS) dated July 11, 2001; AWT Handels Gesellshaft mbH vs M/V Dimitri Poluyan et (PA, (AJM) dated October 11, 2001); S. Mifsud & Sons Limited vs M.V. Euredika et (PA, GCD) dated November 23, 2001; Valfracht Roro Line Ltd vs Dr Louis Cassar Pullicino nomine (PA, JRM) dated April 10, 2003; Dr Max Ganado nomine vs Capt. Sebastiano Pizzimenti proprio et nomine (AC) dated November 30, 2003.

As the vessel had departed and the deposit had been withdrawn, the court said that it had no jurisdiction to hear and decide this action in rem, which by necessity required the presence of the vessel in Maltese territorial waters or, at least after the arrest of the vessel, the deposit of the amount in the Court Register to permit the vessel to leave Malta.

For these reasons, the court accepted the jurisdiction plea, and dismissed Malta Towage’s requests. All judicial costs had to be borne by Malta Towage.

Dr Grech Orr is a partner at Ganado & Associates.