Arbitration in Malta represents an alternative dispute resolution (ADR) procedure employed to settle commercial disputes. Arbitration has started to gain terrain in front of court settlements when it comes to resolving disputes as it takes less time and it costs less money. The main disputes settled by the Malta Arbitration Centre (MAC) refer to:
- construction public procurement,
- maritime issues,
- litigation between shareholders.
What is an Arbitration Court?
An arbitration court in Malta is a private institution where parties can resolve arguments and misunderstandings with the help of an impartial third party. The main difference between this form and the traditional one is that the final decisions are not subject to appeal. It is important to note that this decision does not stop the parties involved from further going to a court as well if they are not content with the result.
In addition to this, solving an issue in an Arbitration Court in Malta is in a less formal frame.
Due to the fact that Malta is part of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, the results of the settlement set in an arbitration court can be recognised in other countries that have signed the same convention.
The main benefit of this problem solving solution is the fact that it can be more efficient and cost saving.
The parties involved have freedom of choice over the following elements:
- – the arbitrator;
- – they can set together the rules of the arbitration;
- – and decide before if the decision is binding legally and final.
Our law firm in Malta can offer more information on the arbitration procedure in this country.
What are the main steps for initiating an arbitration procedure in Malta?
The first step in initiating an arbitration procedure in Malta is for the parties to agree to use arbitration to resolve their misunderstanding. It can be in a verbal or written form as a part of a binding understanding.
The next step refers to the selection of the arbitrator or arbitrators from an official list of professional conflict mediators. There is also an option that permits the parties to choose a representative from the outside of the official list offered by the Malta Arbitration Centre.
The arbitration proceedings are conducted in private and it is organised in a very efficient and fast manner with a strict time limit for presenting evidence.
Malta has a respected role when it comes to settling conflicts in an arbitration court with a strong historical background in this domain. Even if the process is meant to be efficient it is advisable that you receive advice from an experienced law firm in Malta, before filling an application with Malta Arbitration Centre.
The Malta Arbitration Centre
The Malta Arbitration Centreis the main dispute settlement instrument in litigation cases when parties agree to submit their claims to it. The Arbitration Centre is also involved in promoting arbitration as a method of resolving issues without appealing to court proceedings.
The Malta Arbitration Centre can arbitrate various disputes except for marriage dissolutions. Also, disputes involving real estate properties, traffic accidents with no injured persons and with damages not exceeding 12,000 EUR, as well as litigations concerning utilities matters, such as electricity, can only be addressed with the Malta Arbitration Centre.
Those who want to purchase a property in Malta have legal support from our lawyers. Once the documents of the desired property have been verified, the preliminary agreement is drawn up, followed by the final sale and purchase contract. This document normally contains information about the property, the seller and the buyer, the purchase price, and the payment method. All the information regarding this approach can be provided by our specialists in the field.
The Arbitration Law in Malta
The Arbitration Act or Chapter 387 is comprised in the Laws of Malta and it is based on the UNCITRAL Model Law (The United Nations Commission on International Trade Law). The main regulations of the Maltese Arbitration Act states that dispute settlement must be done only if an arbitration agreement was concluded in writing and if the claims have been registered with the Malta Arbitration Centre. However, the process mustn’t necessarily take place at the Malta Arbitration Centre.
The arbitration procedure in Malta
An arbitration procedure in Malta can start after one of the parties, named claimant, files an arbitration notice with the Arbitration Centre. MAC will register the notice and send it to the other party known as the respondent.
The respondent will send a statement of defense to the claimant, but also to the Malta Arbitration Centre or the arbitral tribunal. If the dispute will be settled by an arbitral tribunal, the panel can be formed of one arbitrator or more depending on the sum of the claim.
Both parties are allowed to present the evidence they gathered. The award of the arbitration must be written and once it is registered by the MAC it will be definitive.
The arbitration agreement in Malta
The arbitration procedure is based on an agreement which is signed by both parties participating in the process. Nowadays, most contracts contain arbitration clauses, however this contract can also take the form of a separate document which is attached to another contract. According to the Arbitration Law in Malta, this type of agreement must be in writing and must provide for the parties admitting to any dispute to be resolved by the Arbitration Court in Malta.
In Malta, an arbitration agreement is a legal contract between two or more parties in which they agree to settle a dispute through arbitration instead of going to court.
The arbitration agreement must be in writing and should contain the following information:
- ● the parties to the agreement
- ● the subject matter of the dispute
- ● the number of arbitrators and the procedure for appointing them
- ● the rules that will govern the arbitration
The form of the contract might differ according to each specific situation. Thus it is advisable that you seek professional advice from a law firm in Malta.
Why choose arbitration over other legal proceeding in Malta?
Arbitration is usually used in commercial disputes because of the shorter procedure and the lower costs involved. Also, the parties can choose the rules under which the dispute can be resolved, meaning they can even negotiate various clauses in the contract, therefore they can reach an agreement. The parties will be the ones deciding on the method of appointing the arbitrators; however, these must be impartial in judging the case.
There are no limitation periods in an arbitration process, however the parties must know that they have the right to appeal a decision one time only.
Another advantage of arbitration is that it is regulated at international level, therefore a Maltese company can also carry out these proceedings in another jurisdiction by following international regulations. Malta is currently one of the most appreciated arbitration centers in Europe.
There are several reasons why parties may choose arbitration over other legal proceedings in Malta:
- Efficiency: Arbitration proceedings in Malta are efficient and take up less time than the traditional version. The parties can receive the final decision quite easily.
- Flexibility: Arbitration In Malta is less formal. The parties involved can choose the location, the arbitrator and the rules of the debate. This is particularly important when the subject of the situation is related to a very specific or technical matter and it would require the opinion of an expert in the field.
- Confidentiality: The final decision is not made public.
- Cost: The cost of arbitration can be lower than traditional court proceedings
- Finality: The decision of the arbitrator is final and binding, and the parties cannot appeal the decision to a higher court. And this can bring peace and closure.
- This being said, this alternative resolution method is a cost and time efficient option. Because each case is different it is always advisable to seek legal advice from professional local lawyers before deciding on the right option for your situation. One of our experienced lawyers can offer you all the support you need.