Earlier this year, Parliament passed Act I of 2018[1] which amends the Maltese court structure to make room for a Commercial Section of the Civil Court.  The legal effect of this Act had been suspended until the Minister for Justice appoints a date by Legal Notice and last week, on the 23rd of March, The Hon. Owen Bonnici, Minister for Justice, Culture and Local Government, and the Hon. Silvio Schembri, Parliamentary Secretary for Financial Services, Digital Economy and Innovation issued a joint Press Release[2] stating that Act I of 2018 establishing the Civil Court (Commercial Section) will enter into force on the 9th of April 2018. The respective Legal Notices is therefore expected to be published in the coming days.

While a Commercial Court had already existed in Malta, this court had an entirely different competence than the one to be introduced now. The previous Commercial Court heard all cases dealing with the Commercial Code. In fact, since determining whether an issue had been correctly categorised as commercial or civil in nature by the applicant to the lawsuit was very time consuming, this Commercial Court was abolished in 1995. In terms of Act I of 2018, the new Civil Court (Commercial Section) will only hear cases related to matters which are specifically regulated by the Companies Act; namely bankruptcy, dissolution, winding up, the Article 214 application, and the Article 402 application known as ‘the unfair prejudice remedy’.

Lawsuits pending before the Civil Court First Hall but which relate to the Companies Act will be continued before the Civil Court (Commercial Section) unless they were put off for final oral or written submissions or for judgment before the 9th of April 2018.

The need to establish such a Commercial Section has been felt for some time now, principally in terms of lengthy lawsuits and the need for specialized judges. In fact, the courts have been operating an informal arrangement as to how commercial cases are assigned, therefore, in court practice there has already been a move towards the categorisation of cases. As Malta’s economy is increasingly based on attracting foreign investment, efficiency has been the overarching ambition of the Maltese Government.

Maltese civil court move praised

In the Press Release, Hon. Minister Owen Bonnici said “This Government is committed to increase the efficiency and quality of the Maltese Courts. Undeniably, the setting up of a section tasked with Company Law matter clearly crystallises the said commitment in that it provides a more specialised and accessible judicial service to citizens running a business as well as companies in commercial disputes.”

Whereas Hon. Silvio Schembri added that “It will create greater confidence in the commercial community in view that Malta is about to explore and develop new market, including the digital and financial technology sectors.”

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[1] http://www.justiceservices.gov.mt/DownloadDocument.aspx?app=lp&itemid=28883&l

[2] http://www.gov.mt/en/Government/Press%20Releases/Pages/2018/March/23/pr180619en.aspx