Sometimes things go wrong, relationships break down, plans are disturbed. Whatever the reason for such an unfortunate turn of events, there is a point at which trying to resolve a dispute amicably is not possible, and the parties in disagreement will need to turn to litigation or some other form of dispute resolution. There are various options available to such parties, as explained hereunder.

Litigation is the prevailing option for dispute resolution in Malta, and provided that the Maltese Courts have jurisdiction, one can certainly institute court proceedings for any legal disagreement.

The Maltese Courts of Justice are divided into Superior Courts and the Inferior Courts. The Superior Courts, presided by judges, are the Constitutional Court, the Civil Court, the Court of Civil Appeal, the Criminal Court and the Court of Criminal Appeal. The Inferior Courts, presided by magistrates, are the Court of Magistrates (Malta) and the Court of Magistrates (Gozo); however, the Court of Magistrates (Gozo) has both a superior and an inferior jurisdiction. Whether one’s case is heard in the Superior or Inferior Courts will depend on the subject-matter of the suit, its gravity and/or the amount being claimed, for example the Court of Magistrates (civil jurisdiction) is limited to claims of an amount not exceeding €15,000.

Additionally, again depending on the subject-matter, a case may be lodged in a variety of specialised tribunals such as the Small Claims Tribunal, dealing with monetary claims of an amount not exceeding €5,000 or the Consumer Claims Tribunal, which deals exclusively with consumer matters.

In the case of a cross-border issue when other attempts to solve a claim against a foreign party have failed, another option available to the aggrieved party is the European Small Claims Procedure. This procedure was introduced by means of EU Regulation No. 861/2007 and aims to simplify cross-border small claims litigation while reducing the costs. The procedure applies in cross-border litigation to civil and commercial matters for claims up to €2000. Non-monetary claims can also be made under the procedure. The procedure is a written one and is be conducted mainly through correspondence although the court may request an oral hearing if it deems necessary.

When a dispute needs to be resolved, there are various alternatives to litigation. By far the most popular is arbitration, which normally requires the consent of all the parties to the dispute. However, in Malta, arbitration is mandatory in certain situations such as minor traffic accidents, condominium disputes and disputes connected with electricity and water services.

Arbitration offers the following advantages when compared to litigation:

  • Choice: the parties can decide where a dispute will be arbitrated, which rules will govern the proceedings, the number of arbitrators and the method for selecting them, the nationalities and qualifications of arbitrators, the timetable for the arbitration and virtually anything they may agree upon. Due to the fact that it will be hard to agree on anything at all once the relationship has already degenerated, it would be best for such matters to be decided, where possible, at the beginning of the relationship, before it has turned sour.
  • Neutrality: One of the main attractions of arbitration, especially in the case of cross-border contracts, is that the process can be structured to reduce the fear of nationalistic bias, often a concern in foreign courts. Although arbitrations are typically held under the arbitration law of the chosen place of arbitration, the arbitration may occur in a third country or be conducted by neutrals from third-party nations.
  • Enforceability: at the root of arbitration’s broad acceptance in trans-national dispute resolution is the near-universal enforceability of an arbitration award as a consequence of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which entered into force on 7 June 1959. The Convention requires courts of Contracting States (over 120 countries) to give effect to private agreements to arbitrate and to recognise and enforce arbitration awards made in other contracting States. Thus, enforcement of an arbitration award can be easier to achieve than recognition of a judicial judgement in which the court has ruled against the foreign party.
  • Cost-effectiveness: most times arbitration is more cost-effective than litigation, as the mutual agreement on many procedural issues saves time and legal fees.
  • Confidentiality: while court litigation is usually open to public and media scrutiny, arbitrations and mediations are conducted in privacy, thus the identity of the parties, the nature of the dispute, the material presented during the course of the hearing and the outcome of the proceedings generally remains confidential.

In Malta, the Arbitration Act (Chapter 387 of the Laws of Malta) provides the legal framework governing arbitration proceedings and establishing the Malta Arbitration Centre, while the Arbitration Rules (Chapter 387.01 of the Laws of Malta) regulate matters relating to proceedings, costs and other details. Most of the provisions in the aforementioned laws may be overridden by the agreement of the parties. For an arbitration in Malta to be valid, the claimant must file the relative notice of arbitration with the registrar of the Malta Arbitration Centre and this same notice shall be transmitted to the other party.

Having the right advocate on your side can make all the difference when dealing with a legal dispute. Equinox offers support in all types of court proceedings, arbitration proceedings and out of court settlements. We are also able to carry out arbitrations and to draft your arbitration agreements whether your issue relates to domestic or cross-border matters.

For more information on litigation and/or arbitration, please contact us on info@equinoxlegal.com

For more information about our Litigation & Arbitration services, please contact us here.