Ganado Advocates

Ganado Advocates is pleased to announce the appointment of Lorraine Poole and Robert Taylor-East as new Partners within the firm’s banking and finance practice and corporate finance and tax practice, respectively. Their individual expertise and professional dedication further strengthen the firm’s commitment to delivering the highest standard of legal services across our key practice areas. Lorraine has extensive experience in complex cross-border transactions and advises on a wide spectrum of syndicated financing arrangements, including acquisition and project finance, in addition to broader transactional work. She is also a key person for prime brokerage, securities lending, repos and derivatives, being responsible for the firm’s industry opinions to organisations such as ISDA, and providing bespoke advice on specialised issues such as close-out netting on insolvency and collateral arrangements. Robert provides tax advisory services across a broad range of sectors and in relation to varied transactions, and is well regarded for his practical, solutions-driven approach in an increasingly complex fiscal landscape. He brings both technical expertise and pragmatism to his new role, supporting individuals and businesses alike. André Zerafa, the firm’s Managing Partner, commended their diligence, commitment, and professionalism in their work and their interactions with colleagues and clients. He emphasised that their achievements exemplify the collective excellence expected from lawyers at the firm, and these appointments will contribute to the success of the firm.

Introduction In a recent judgment delivered on the 6 June 2025, the First Hall Civil Court (the “FHCC”), in the case Raymond Azzopardi (the “Claimant”) vs Adrian Borg (the “Respondent”) presided by Madame Justice Audrey Demicoli, considered the legal obligations of contractors concerning the standard of skill and craftsmanship required under a contract of works. The Claimant requested the FHCC to (i) declare and decide that the Respondent shall pay the Claimant and is consequently a debtor of the Claimant in connection with any sum due for works carried out at the Respondent’s property, (ii) liquidate the sum which shall be due to the Claimant in the amount of €37,286.74 with the appointment of experts engaged by this Honourable Court should their assistance be necessary, (iii) order the Respondent to pay the Claimant the amount liquidated with costs including those of the judicial letter and precautionary garnishee order filed against the Respondent. The Background The dispute emerged following construction works carried out by the Claimant at a site in Luqa owned by the Respondent. The works included those that were covered by the necessary Planning Authority permits, specifically at ground floor level, while additional works needed at first floor level were arranged through verbal agreements and lacked the necessary permits. Despite various payments being made throughout the relationship, the Respondent withheld a significant outstanding sum. The Respondent contended that the Claimant proceeded with the works independently, disregarding instructions from the appointed architect Mark Frendo, and alleged that the quality of workmanship was substandard and posed considerable risks. These concerns ultimately led to an intervention by the Building and Construction Authority (“BCA”) which ordered termination of works in May 2023. The Respondent, in his Sworn Reply, held that: The Claimant’s claims are unfounded both in fact and in law; The Claimant solely decided to carry out works not under the instructions of the Architect Mark Frendo who was engaged to monitor such works. The Respondent noticed that the works being carried out by the Claimant were not in accordance with the level of skill and craftsmanship expected, and such works were going to cause a serious risk; The works had to be stopped by the BCA given that they were going to cause serious damage and harm to the building in question; and The Claimant’s claims are all false and are nowhere close to the truth. Key issues before the Court The FHCC proceeded to address the following key issues:  Technical Expert & Quantity Surveyor’s report At the Claimant’s request, the FHCC appointed Architect Michael Lanfranco and Quantity Surveyor Kevin Borg to assess the works. Following a site visit, the report concluded as follows: Certain works lacked the requisite permits – a fact acknowledged by both parties. Some elements of the work fell short of the expected standard of skill and craftsmanship; Due to the above, remedial works valued at €11,545 were necessary; The overall value of the completed works stood at €39,145; and After accounting for necessary deductions, the experts recommended a payment of €27,600 to the Claimant. Nonetheless, the Court made reference to Article 618 of Chapter 12 which provides that the court is in no way bound to accept those conclusions made in a technical expert’s report.  Works which were allegedly not carried out in accordance with the level of skill and craftsmanship The Court examined the Claimant’s admissions, where he conceded that parts of the works were executed without oversight from the architect and absences of the necessary permits for the works to be carried out at ground floor level. As to other works, the Claimant held that the architect was not involved at this stage. The Court also asked whether he was given proper plans, and the Claimant stated that he was only given a piece of paper by the Respondent. In fact, Architect Mark Frendo agreed with this and held that there were works which were not carried out under his supervision and which were not covered by the required permits. It also transpired that the Claimant used to follow instructions given by the Respondent who is an Engineer. While the Claimant did not contest the fact that certain works were not carried out with the required level of craftsmanship, he nonetheless tried exonerating himself from responsibility claiming that the works were carried out on the instructions of the Respondent. However, the FHCC firmly rejected this defence, affirming that contractors remain fully responsible for ensuring the quality and legality of their work, regardless of client instructions that contravene professional standards or legal requirements.  A contractor is bound to carry out works with a certain level of skill and craftsmanship. The Court further emphasised that the contractor bears the responsibility to perform works to a professional standard, and that delegation of responsibility to the client is not a valid excuse for subpar or unlawful execution of works. The FHCC additionally held that reports made with the BCA, irrespective of who actually made these reports (the Claimant or Architect Mark Frendo), further substantiate that the works carried out were not of the level of trade and craftsmanship expected. Determination of Amount Payable First and foremost, the Court held that it certainly cannot grant payment for works which were not executed to the requisite standard once it resulted that: From a technical point of view, the works were contested both by the technical expert and by the Claimant himself as works were not carried out according to the level of trade and craftsmanship expected; and More so, works were carried out in breach of development laws and obligations imposed by the law on the contractor. Naturally, given that it was the Respondent himself who engaged and authorised the Claimant to perform certain works, all remedial works that are necessary are to be carried out by the Respondent at his own expense. The FHCC took into consideration the following: Payment due for works carried out on the first floor; Material; Works which were not taken into consideration by the technical expert; and Payments already made. After taking the above into account, the FHCC determined that the Respondent owed the Claimant the sum of €4,266 together with interest from the date of judgment to the date of effective payment. Decision In conclusion and for the above-mentioned reasons, the FHCC ruled in favour of the Claimant, declaring Adrian Borg liable to pay Raymond Azzopardi the sum of €4,266 for construction works carried out at BVA Engineering, Plot 143, Industrial Estate Luqa, and dismissed all the Respondent’s pleas in their entirety. Disclaimer: Ganado Advocates is responsible for contributing to this law report but was not in any way involved as legal advisor for the parties in the judgement being covered in this law report. This article was first published in ‘The Malta Independent’ on 25/06/2025.

The European Accessibility Act (“EAA”), formally known as Directive (EU) 2019/882 (and the Maltese transposition through the “Accessibility Measures (European Accessibility Act) Regulations” – S.L. 627.03), is set to significantly transform the digital and consumer landscape across the European Union. With full implementation required by June 28, 2025, this landmark legislation aims to reduce barriers and foster universal design, ensuring greater accessibility for people with disabilities. Aim Despite existing legal commitments, such as the UN Convention on the Rights of Persons with Disabilities, there remain substantial disparities in accessibility standards across EU Member States. The EAA seeks to bridge these gaps by obliging companies to make specific products and services accessible when placed on the EU market. The EAA will have a far-reaching impact on businesses operating in the sectors mentioned below as it applies to products for consumers with digital components, such as smartphones, e-books or self-service terminals, or certain digital services such as B2C online shops or access services for audiovisual media services, such as streaming providers. Applicability The EAA is applicable to the following products, placed on the market after 28 June 2025: consumer general purpose computer hardware systems and operating systems for those hardware systems; the following self-service terminals: (i) payment terminals; (ii) automated teller machines; (iii) ticketing machines; (iv) check-in machines; (v) interactive self-service terminals providing information, excluding terminals installed as integrated parts of vehicles, aircraft, ships or rollingstock; consumer terminal equipment with interactive computing capability, used for electronic communications services; consumer terminal equipment with interactive computing capability, used for accessing audiovisual media services; e-readers. These regulations also apply to the following services provided to consumers after 28 June 2025: electronic communications services with the exception of transmission services used for the provision of machine-to-machine services; services providing access to audiovisual media services; the following elements of air, bus, rail and waterborne passenger transport services: (i) websites; (ii) mobile device-based services, including mobile applications; (iii) electronic tickets and electronic ticketing services; (iv) delivery of transport service information, including real-time travel information; with regard to information screens, this shall be limited to interactive screens located within the territory of the European Union; and (v) interactive self-service terminals located within the territory of the European Union, except those installed as integrated parts of vehicles, aircraft, ships and rollingstock used in the provision of any part of such passenger transport services; This category of services excludes urban, suburban and regional transport services, except the requirement (v) above. consumer banking services; e-books and dedicated software; e-commerce services. However, these regulations do not apply to the following content of websites and mobile applications: pre-recorded time-based media published before 28 June 2025; office file formats published before 28 June 2025; online maps and mapping services, if essential information is provided in an accessible digital manner for maps intended for navigational use; third-party content that is neither funded, developed by, or under the control of, the economic operator concerned; content of websites and mobile applications qualifying as archives, i.e. that contain content that is not updated or edited after 28 June 2025. The EAA also sets out a number of obligations for the manufacturers, authorised representatives, importers and distributors, when making a product available on the market. Amongst others, these include the strict requirements of CE markings on products, rules on packaging and instructions of products. Various examples of ways in which to meet these obligations are provided in the annexes to the Regulations. It is important to also point out that two exemptions exist in relation to the application of these rules. These are: (a) microenterprises providing services (fewer than 10 staff and less than €2 million turnover); and (b) where compliance imposes a “disproportionate burden” or leads to “fundamental alteration”. In these cases, businesses must document and justify this burden and an assessment must be reviewed at least every 5 years. Time Periods Recognising the need for businesses to adapt, the Directive includes specific transitional periods. There is a grace period for existing products and services that were introduced before June 28, 2025. These must achieve compliance by 28 June 2030. There is an extended deadline for long-life self-service terminals. These devices, such as ATMs or ticketing machines, must comply within 20 years of their installation or by June 28, 2045, whichever comes first. Penalties and Non-Compliance Penalties applicable to infringements of provisions of these regulations, to be enforced by the market surveillance authority, and taking into account the extent of the non-compliance, including its seriousness,  and  the  number  of  units  of  non-complying  products or services concerned, as well as the number of persons affected, shall be prescribed, and necessary measures to ensure their implementation shall be undertaken by the market surveillance authority. The penalties shall also be accompanied by effective remedial action in case of non-compliance. Affected service providers and manufacturers, importers and distributors of products that fall within scope should ensure that they are aware of and able to comply with these obligations.

Ganado Advocates is the author of the 2025 Marine Money International chapter on shipping in Malta (Q2, volume 41, number 2). Marine Money International is a leading quarterly publication focused on maritime finance, providing comprehensive coverage of key issues affecting the shipping industry, including deal transactions, legal matters, company performance, industry awards, innovation, ESG topics, and public company rankings. In their article, authors Jan Rossi, Nikolai Lubrano, and Sarah Demicoli discuss the introduction of a security interest in ship finance lease transactions, delivering an essential resource for professionals within the shipping industry. Click here to view and download the full article within the publication.

The Regulation (EU) 2024/1689 (AI Act), published in July 2024, applies across all sectors, including insurance. The AI Act follows a risk-based approach and classifies AI systems into four categories according to their risk level: prohibited, high risk, limited and minimal risk. The AI Act defines a comprehensive set of governance and risk management measures that high-risk systems need to comply with, alongside the requirements already in place under sectoral legislation. AI systems with limited or minimal risk under the AI Act can operate without additional measures, except for transparency rules (e.g., informing the customer of AI interaction), promoting AI literacy among staff, and developing voluntary codes of conduct. However, their use by insurance companies and intermediaries must follow governance and risk management rules in sectoral legislation. Art.3.1 of the AI Act: defines “AI system” as “a machine-based system that is designed to operate with varying levels of autonomy and that may exhibit adaptiveness after deployment, and that, for explicit or implicit objectives, infers, from the input it receives, how to generate outputs such as predictions, content, recommendations, or decisions that can influence physical or virtual environments”. Current Status  EIOPA: Consultation Paper on Opinion on Artificial Intelligence Governance and Risk Management On 10 February 2025, EIOPA released a draft opinion on governance and risk-management principles for responsible AI use in insurance for consultation. The principles include: Risk-based and proportional approach throughout the AI lifecycle Fairness and ethics, prioritizing consumer interests Clear roles and responsibilities for relevant staff Explanation of AI outcomes Sound data governance policies Adequate documentation and records EIOPA emphasizes the need for accurate, unbiased data and explainable AI outputs, along with monitoring and redress mechanisms for affected customers. The draft opinion provides guidance on applying existing insurance sector legislation like Solvency II and IDD to AI systems. It aims to mitigate AI risks while maximizing benefits and promoting good supervisory practices. The draft opinion does not cover prohibited or high-risk AI systems under the AI Act to avoid regulatory overlaps but follows a flexible principle-based approach. The aim of the consultation was for EIOPA to consider the feedback received, develop the impact assessment based on the answers to the questions included in the consultation paper, and revise this Opinion accordingly. Commission’s Q&A on AI Literacy As of 2 February 2025, providers and deployers of AI systems, including insurance service providers, must ensure AI literacy among their staff. The Commission’s Q&A clarifies AI literacy requirements, emphasizing informed deployment and awareness of AI opportunities and risks. The document elaborates that the concept of AI literacy, as referenced in Article 4 of the AI Act, is based on the definition provided in Article 3(56) of the AI Act. According to this definition: “AI literacy’ means skills, knowledge and understanding that allow providers, deployers and affected persons, taking into account their respective rights and obligations in the context of this Regulation, to make an informed deployment of AI systems, as well as to gain awareness about the opportunities and risks of AI and possible harm it can cause.” The Commission further clarifies that Article 4 of the AI Act does not impose an obligation to measure the AI knowledge of employees. However, it asserts that AI providers and deployers should ensure an adequate level of AI literacy, considering the technical knowledge, experience, education, and training of employees. The Commission Q&As section provides valuable insights regarding the definition of AI literacy (e.g., which target group is in scope), compliance with Article 4 (e.g., what should be the minimum content of an AI literacy programme, specific requirements for financial services, how to document actions to comply with Article 4), enforcement of Article 4 (e.g., who will be enforcing, consequences of non-enforcement), and the AI office’s approach to AI literacy (e.g., guidelines).      iii. European Parliament Draft Report on AI On 14 May 2025 the European Parliament’s Economic and Monetary Affairs Committee (ECON) published a draft report on impact of artificial intelligence on the financial sector. The report highlights AI applications in fraud detection, customer support, compliance, and personalized advice. While acknowledging AI risks, it calls for clear regulatory guidance and support for responsible AI use without introducing new legislation. Due to regulatory overlaps and legal uncertainties, which can limit the use of AI and complicate compliance for financial institutions, ECON suggests responsible use of AI instead of new restrictive legislation. The motion for a resolution requests the European Commission to: provide clarity and guidance on the application of existing financial regulations to AI, ensuring consistent definitions and a simplified regulatory framework to avoid duplicative requirements; avoid introducing new sector-specific AI regulations that could increase complexity and uncertainty within established sectoral rules, potentially creating barriers in cross-border markets. assist industry efforts to enhance understanding and responsible use of AI, providing clear guidance on the EU AI Act’s requirements for financial institutions regarding AI literacy. The ECON vote is scheduled for 13 October and the Plenary vote for November 2025. European Commission Consultation on High-Risk AI Systems On 6 June 2025, the European Commission launched a consultation on the implementation of the AI Act’s rules for high-risk AI systems, including those used for creditworthiness evaluation and insurance risk assessment. The AI Act identifies two types of ‘high-risk’ AI systems: (1) important for product safety under the Union’s harmonised legislation on product safety; and (2) those that can significantly affect people’s health, safety, or fundamental rights in specific use cases listed in the AI Act. Stakeholders, including providers and developers of high-risk AI systems, businesses and public authorities using such systems, as well as academia, research institutions, civil society, governments, supervisory authorities, and citizens in general are invited to share their views. The questionnaire is divided into five sections: Sections 1 and 2 classify high-risk AI systems per Articles 6(1) and 6(2) of the AI Act. Section 3 discusses broader classification issues like intended purpose and category overlaps. Section 4 outlines requirements and obligations for high-risk AI systems, including value chain responsibilities and definitions such as “substantial modification.” Section 5 seeks opinions on revising the list of high-risk use cases and prohibited practices. The consultation seeks input from stakeholders and is open until 18 July 2025.

On 10 June 2025, the European Banking Authority (“EBA”) published its long-awaited Opinion[1] on how the existing second Payment Services Directive (“PSD2”) interacts with the Markets in Crypto-Assets Regulation (“MiCA”), in the context of electronic money tokens (“EMTs”). The issue at hand is that EMTs, under MiCA, are defined as electronic money—meaning they also fall within the definition of “funds” under PSD2. This dual classification has created a regulatory grey area for crypto-asset service providers (“CASPs”), who may find themselves needing two separate authorisations to carry out what is essentially one activity. The Opinion aims to provide clarity to national competent authorities (“NCAs”) during the transitional period before PSD3 and the new Payment Services Regulation (“PSR”) come into force. It also offers legislative suggestions to the EU institutions to help resolve this overlap in the long term. Another important aspect is that for CASPs that offer transfer, administration and custody services relating to EMTs, the EBA advises the NCAs to grant such applicants a transition period until 1 March 2026, until the PSD2 authorisation has to be obtained. The EBA’s guidance is structured around the following seven key areas: Scope and Definitions The EBA recommends that NCAs treat the transfer of EMTs by CASPs on behalf of clients as a payment service under PSD2. Similarly, custody and administration of EMTs—especially when custodial wallets allow transfers to and from third parties—should also fall under PSD2. However, the Opinion draws a line when it comes to exchange services: exchanging crypto-assets for funds or for other crypto-assets, when done using proprietary capital, should not be considered a payment service. Authorisation To reduce the burden on CASPs, the EBA advises NCAs to streamline the authorisation process. This includes reusing information already submitted during the MiCA application and applying existing PSD2 exemptions (with some exceptions). The idea is to avoid duplicative requests and make the process more efficient. Capital Requirements The EBA takes the view that capital requirements under MiCA and PSD2 should apply cumulatively to CASPs offering both crypto and payment services, ensuring that risks associated with both activities are adequately covered. However, NCAs should apply proportionality when assessing capital adequacy and ensure that CASPs are well-informed of the different elements that may be considered towards minimum capital. Consumer Protection The EBA stresses the importance of applying PSD2’s consumer protection rules to EMT-related services. These include requirements for transparency, fee disclosures, execution times, and liability for unauthorised transactions. However, the EBA acknowledges that some of these rules may be difficult to implement in a blockchain environment—for example, gas fees can be unpredictable, and execution times may vary due to network congestion. To address this, NCAs are advised not to prioritise enforcement of certain PSD2 provisions during the transition, such as the information requirement concerning the charges payable by the user to the CASPs. Meanwhile, EU legislators should consider incorporating equivalent protections into MiCA or clarifying their application in PSD3/PSR. Security and Strong Customer Authentication Given the fraud risks associated with EMT transactions, the EBA insists that strong customer authentication (“SCA”) and fraud reporting requirements must apply. These should cover both access to custodial wallets of EMTs and the initiation of EMT transfers. However, recognising the technical challenges involved, the EBA recommends a grace period until 2 March 2026 before full enforcement. After that date, CASPs should be expected to comply with SCA and begin reporting fraud data as per the Annex of the applicable EBA guidelines (EBA/GL/2018/05). Safeguarding and Safekeeping MiCA already imposes safekeeping obligations on CASPs holding EMTs on behalf of clients. The EBA believes these are sufficient and that PSD2’s safeguarding rules should not apply concurrently, as this would create unnecessary duplication. Open Banking Finally, the EBA addresses whether custodial wallets should be subject to PSD2’s open banking rules. If these wallets are considered payment accounts, CASPs could be required to develop an interface through which third-parties could access and provide their services. The EBA advises NCAs not to prioritise enforcement of open banking provisions for EMT-related services during the transition. Final Thoughts While the EBA’s Opinion goes a long way in clarifying the regulatory treatment of EMTs, it still leaves some uncertainty unresolved. The guidance provided to NCAs is helpful in the interim, however, the fact remains that CASPs offering services involving EMTs may still find themselves navigating overlapping frameworks. Unless the legislative amendments proposed by the EBA are taken up, CASPs could continue to face disproportionate compliance burdens. This Opinion is a step in the right direction, but further clarity and legislative alignment will be essential to ensure a coherent and workable regulatory environment for EMTs going forward. [1] Opinion on the interplay between PSD2 and MiCA.pdf

The Malta Financial Services Authority (“MFSA”) has published a Dear CEO letter addressed to all chief executive officers and compliance officers of ‘persons professionally arranging or executing transactions’, particularly to investment services providers. The letters sets out the MFSA’s main findings following numerous market abuse-related supervisory inspections which it carried out with numerous Maltese investment services providers – primarily member firms of the Malta Stock Exchange – between 2020 and 2024.The letter makes for some interesting reading as it gives the MFSA’s perspective on the industry’s compliance with MAR generally. The letter also includes some recommended best practice to help investment services providers adhere to their obligations under the Market Abuse Regulation (“MAR”), as well as a number of poor practices which the MFSA observed in the market, all of which are summarised below. General observations The tone of the letter is overall quite positive since it opens by saying that the “very large majority” of investment services providers had at least undertaken efforts to implement appropriate systems and procedures to allow them to fulfil their obligations under MAR. That said, the MFSA also admits that there is “significant room for improvement” when it comes to general MAR compliance, even though the “general level of compliance had markedly improved” since the first set of inspections which the MFSA carried out between 2018 and 2020. In our view, a number of shortcomings identified by the MFSA are, and can be, easily remedied by a minor investment of time and effort by investment services providers. For instance, the MFSA places significant emphasis on a lack of training, both in respect of market soundings as well as market monitoring, which can be easily rectified with a well thought out and planned training programme. Best and poor practices As mentioned, the letter sets out recommended best practices, as well as examples of poor practices observed by the MFSA. We’ve set out a summary of these in the table annexed to the article and have split them according to the key areas which the MFSA focused on in the letter, namely: (1) market soundings, (2) market monitoring, and (3) investment recommendations. Kindly note that the good practices do not necessarily correspond to the poor practices set out in the same row and each column should therefore be read separately. Next steps Given that MAR has been in force since 2016 and taking into consideration the various MFSA circulars and supervisory interactions held with market participants, the MFSA has made it clear that it expects all investment services providers to comply with MAR in full. From experience, we’ve seen the MFSA ramp up its oversight of MAR — with more supervisory inspections and a notable rise in enforcement actions, including significant fines. Given the MFSA’s own assessment that there’s “significant room for improvement” in overall MAR compliance, we expect this intensified scrutiny to continue — or even escalate. Investment services providers should be ready for sustained regulatory attention in this area. To this end, entities which fall in scope of MAR would be well advised to review their existing policy frameworks and operational arrangements to ensure that they are in full compliance with MAR and regulatory expectations. (Click the table below to view the complete version) (Link to Photo: https://bit.ly/3GhjoXs ) Ganado’s Capital Markets team is well-versed in all market abuse-related matters and will be pleased to assist any issuer or potential issuer should the need arise.

Recent launch of public consultation on the proposed introduction of an auto-enrolment occupational pension regime in Malta Last week, on 18th June 2025, the Government of Malta, via the Ministry for Finance (MFIN), launched a one-month public consultation on the proposed introduction of an auto-enrolment occupational pension regime in Malta. Along with the consultation document published by the Government, the Malta Financial Services Authority (MFSA) has also issued its own consultation document, with the aim of further explaining the amendments proposed to the two main legislative Acts – the Retirement Pensions Act and the Insurance Business Act. This consultation follows the Government’s announcement of the Malta Budget for 2025 back in October 2024, where the Government announced its commitment to introduce a new set of rules which will require employers to have an occupational pension scheme in place and to auto-enrol their employees into this scheme. The intention behind the proposed regime is to improve the adequacy of pensions via the promotion of occupational pension plans, whereby every employee entering the workforce will have to be offered a pension plan, which they will participate in, unless they opt out. The deadline for the application of this system to the private sector is being proposed as June 2026. What will this mean for employers? Based on the consultation document, employers can expect some of the following obligations which are found in the proposals: Employers will be required to identify an occupational pension scheme which qualifies, which they wish to use to offer pensions within their organisation. Employers will also need to ensure that the chosen pension scheme is in line with the auto-enrolment rules. Employers will then be obliged to enter into a contractual arrangement with the chosen pension scheme provider to regulate the obligations of the employer and the scheme provider. Employers will be required to identify which employees are considered ‘eligible employees’ under the rules, and to automatically enrol all eligible employees working within their organisation into the chosen occupational pension scheme. Employees will however have the right to opt-out of the scheme, and if an employee does opt-out, employers will then be obliged to offer employees the opportunity to re-enrol into the scheme on an annual basis. Pension contributions may be made solely by the employee, or jointly by the employee and the employer. A minimum monthly pension contribution by the employee is set at €50, which contribution shall be deducted directly from the employee’s salary following their written consent. Employer contributions will remain voluntary. The Government has, however, announced its commitment to match employee contributions for public sector employees, up to a maximum of €100 per month. Next steps The public consultation period is now open, and will run up to 17th July 2025. During this period, interested parties should look into providing comments, suggestions, and requests for clarifications. Once the consultation period closes, the Government and the MFSA will issue a Feedback Statement to address the suggestions received via the public consultation, and to outline any proposed changes to the framework. As the Ganado Pensions Team, which has been active in this space since 2010, we shall shortly be launching webinars and information sessions on this topic, so as to ensure that employers are well prepared for the auto enrolment changes to come.

Introduction Over the past few years, the European Union has been actively working to overhaul its pharmaceutical legislative framework to better address unmet medical needs, such as those relating to rare diseases, as well as to improve Europe’s competitiveness in the pharmaceutical market and to support innovation. In fact, in April 2023, the European Commission (the “Commission”) had published a new so-called ‘pharma package’ which included proposals for a new regulation and a directive aimed precisely at tackling such issues. Such proposals now have to be negotiated with the European Parliament for a final version of these new rules to be agreed upon. In tandem with such developments, the EU is also trying to tackle the vulnerabilities in Europe’s pharmaceutical supply chains which have caused and continue to cause shortages in essential medicines for patients across the Union. Such concerns have been exacerbated in recent years due to Europe’s experience during the Covid-19 pandemic, and due to ongoing geopolitical unrest in the region and globally. Therefore, on 11 March 2025, the Commission also unveiled a proposal for a new Critical Medicines Act (the “CMA”), which complements the pharma package, and which aims to strengthen the production, supply and accessibility of those critical medicinal products for which insufficient supply would risk or result in serious harm to patients. The proposal also seeks to improve access and security for other ‘medicines of common interest’ for which, in at least three Member States, the market fails to adequately ensure availability and accessibility for patients, in the necessary quantities and forms. The CMA’s approach for tackling such issues is essentially two-fold. Firstly, it introduces measures for supporting and encouraging private investments in projects which would play a role in enhancing the Union’s manufacturing capacity for critical medicinal products. Secondly, it provides for demand-side measures relating to the public procurement of critical medicinal products and medicines of common interest. Strategic projects The CMA outlines specific benefits for projects located within the Union that are designated as ‘Strategic Projects’. Strategic Projects are undertakings aimed at establishing or expanding EU manufacturing capacity for critical medicines, their active substances, or key inputs. A project may qualify as a strategic project if it meets at least one of the following criteria: it creates or increases manufacturing capacity for one or more critical medicinal products or for collecting or manufacturing their active substances; it modernises an existing manufacturing site for one or more critical medicinal products or their active substances to ensure greater sustainability or increased efficiency; it creates or increases manufacturing capacity for key inputs necessary for the manufacturing of one or more critical medicinal products or their active substances; or it contributes to the roll-out of a technology that plays a key role in enabling the manufacturing of one or more critical medicinal products, their active substances or key inputs. The CMA aims to ensure that Strategic Projects designated as such by a Member State would be granted priority status and would benefit from expedited permitting processes. Furthermore, upon request from the project’s promoter, Member States would be obliged to provide administrative and regulatory support. This includes, for example, prioritising inspections for good manufacturing practices at new, expanded or modernised manufacturing sites, and an expedited and streamlined process for any necessary environmental impact assessments. The CMA further permits Member States to prioritise financial support for strategic projects aimed at addressing vulnerabilities in the supply chains of critical medicinal products, provided such vulnerabilities are identified through a formal evaluation and aligned with the strategic guidance issued by the Critical Medicines Group. Such financial support must nevertheless adhere to the state aid restrictions set out in Articles 107 and 108 of the TFEU. In this respect, it is important to note that the European Commission has already issued a working document which provides guidance on how Strategic Projects can receive financial support from Member States while remaining within the bounds of EU state aid rules. Undertakings receiving such financial support must prioritise EU market supply for as long as the product in question remains on the Union List of Critical Medicinal Products. They are also required to use their best efforts to ensure continued availability in the Member States where the product is marketed. Where necessary to prevent shortages, the supporting Member State may require the beneficiary to supply the EU market with the relevant product, active substance, or key input. Additionally, other Member States facing imminent shortages may request the supporting Member State to act on their behalf. The CMA also provides for EU financial support to strategic projects under programmes such as EU4Health, Horizon Europe, and the Digital Europe Programme. However, Article 16 of the proposal limits such funding to the current Multiannual Financial Framework (2021–2027). The absence of long-term EU budget commitments raises concerns about the effectiveness of this provision – especially considering that the investment required to meet the CMA’s strategic objectives is expected to be significant. This is particularly relevant given existing concerns about the profitability of manufacturing medicines within the Union, as well as the potential for increased medicine prices resulting from efforts to reduce dependency on third country suppliers. Mandatory use of most economically-advantageous tender criteria From a public procurement perspective, the CMA introduces a requirement for contracting authorities to apply the most economically advantageous tender criteria, rather than awarding contracts based solely on price, in procurement procedures for critical medicinal products. These award criteria may include factors such as stockholding obligations, supplier diversification, or supply chain monitoring. In addition, the CMA also introduces a preference for EU-based manufacturing. For critical medicinal products identified as vulnerable due to a high dependency on a single or limited number of third countries, contracting authorities are, where justified, required to favour suppliers that manufacture a significant portion of these critical medicinal products within the EU. This measure, while intended to enhance supply security and autonomy, raises concerns regarding its long-term impact on drug prices, as production within the EU may be more expensive than sourcing from lower-cost countries. Furthermore, although the CMA mandates that these procurement rules must be implemented in compliance with the EU’s international obligations, including the WTO Agreement on Government Procurement and applicable Free Trade Agreements, the preference for EU manufacturing could nonetheless provoke trade tensions. There is a risk that such a policy may be perceived as discriminatory by third countries, potentially leading to retaliatory measures or reduced market access for European companies in non-EU markets. Collaborative procurement mechanisms The CMA also provides for collaborative procurement across Member States and outlines three distinct models through which such cooperation may take place. Collaborative procurement is completely optional for Member States to participate in. It is not mandatory. Firstly, upon a reasoned request by at least three Member States, the Commission may act as a facilitator for cross-border joint procurement of medicinal products of common interest by such Member States. Once such request is received, the Commission is required to notify all other Member States of the initiative and invite them to declare their interest within a specified timeframe. If the Commission accepts such a request, it will provide secretarial and logistical support to the interested Member States by facilitating cooperation and providing advice on the applicable rules. Secondly, where there is a request from nine or more Member States, the Commission may, in certain scenarios, procure on behalf of the Member States opting to participate. Such a procedure can be adopted where the procurement relates to critical medicinal products for which an evaluation has identified a vulnerability in the supply chains or for which the Executive Steering Group on Shortages and Safety of Medicinal Products within the European Medicines Agency has recommended a common procurement initiative or where it relates to a medicinal products of common interest, for which a joint clinical assessment report or a clinical assessment carried out under the voluntary cooperation among Member States has been undertaken in terms of Regulation (EU) 2021/2282 on Health Technology Assessment. Thirdly, where a contract is necessary for the implementation of joint action between the Commission and Member States, the Commission and at least nine participating Member States may jointly engage as contracting authorities in a joint procurement procedure. This mechanism is limited to the scenarios defined above as well. On an EU level, concerns persist that joint procurement may be used excessively as a cost-containment tool. Excessive downward pressure on prices could undermine incentives for European pharmaceutical companies to invest in R&D, potentially stifling innovation within the Union. This underscores the need for a balanced application of joint procurement mechanisms, which should be targeted to facilitate genuine access and supply vulnerabilities rather than as a default pricing strategy. Conclusion The CMA represents a significant step toward ensuring the strategic autonomy of the EU in the field of pharmaceuticals. Through the recognition of strategic projects, modernised procurement practices, coordinated planning, and potential joint procurement initiatives, it aims to improve the availability and security of supply of critical medicinal products within Europe. Nevertheless, the proposal’s modest indicative budget, its omission of a unified stockpiling strategy, and its potential to trigger international trade tensions may undermine its effectiveness. Ultimately, its success will undoubtedly depend on thoughtful implementation, sustained investment, and ongoing dialogue among Member States, industry stakeholders, and international partners. Disclaimer: Ganado Advocates is responsible for contributing to this law report but was not in any way involved as legal advisor for the parties in the judgement being covered in this law report. This article was first published in ‘The Malta Independent’ on 18/06/2025.

The Malta Financial Services Authority (MFSA) has reaffirmed its commitment to robust supervision and regulatory innovation in the insurance sector, as detailed in its 2024 Annual Report. The Authority’s efforts throughout the year focused on enhancing prudential oversight, consumer protection, and regulatory alignment with evolving European standards. A key area of focus was the prudential supervision of insurance and reinsurance undertakings, intermediaries, and retirement schemes. The MFSA conducted targeted inspections, particularly of tied insurance intermediaries, to assess the handling of funds held in fiduciary capacity and compliance with claims reserving processes. These inspections ensured alignment with the Motor Insurance Directive and broader European regulatory standards. The Authority also intensified its scrutiny of newly licensed insurance entities, conducting compliance inspections during their first year of operation to verify adherence to approved business plans and regulatory obligations. Given the cross-border nature of many firms, the MFSA collaborated closely with other national supervisory authorities, including those in the UK, to assess governance arrangements in third-country operations—an increasingly important focus in the post-Brexit regulatory landscape. From a conduct perspective, the MFSA addressed several consumer-centric issues. Reviews of selling practices examined cold calling techniques, AML procedures, and value-for-money assessments, particularly in the context of online sales and sustainability disclosures. The Authority also launched a two-phase review of credit protection insurance (CPI), with the first phase focusing on policy wording and commissions, and the second phase—set for 2025—targeting distribution practices. In terms of regulatory developments, 2024 saw significant legislative and rulebook updates. Amendments to the Insurance Business Act introduced new requirements for motor vehicle liability insurers to contribute to the Protection and Compensation Fund. The MFSA also reissued the Insurance Business (Protection and Compensation Fund) Regulations to transpose key provisions of the Motor Insurance Directive (Directive 2021/2118), ensuring enhanced consumer protection in the event of insurer insolvency. Further reforms included the introduction of Chapter 17 of the Insurance Rules, which clarified procedures for transferring and winding up insurance cells. Updates to the Insurance Distribution Rules and Pension Rules were also implemented to reflect EU directives and feedback from market participants. The MFSA continued to integrate environmental, social, and governance (ESG) considerations into its supervisory framework. In 2024, the Authority launched a Sustainable Finance Programme through its Financial Supervisors Academy, equipping staff with the tools to assess climate-related risks and combat greenwashing. The MFSA also participated in EU-wide initiatives such as the Technical Support Instrument (TSI) and the Network for Greening the Financial System (NGFS), reinforcing its role in promoting sustainable finance. Overall, the MFSA’s initiatives in 2024 underscore its proactive approach to regulation, responsiveness to market developments, and commitment to safeguarding the integrity and resilience of Malta’s insurance sector.

Ganado Advocates is the author of the Malta chapter in Lexology Panoramic – Trademarks guide, 2025 edition. The publication serves as a comprehensive guide to domestic and international law, offering insights into the legal framework in Malta, registration and uses of trademarks, filing procedures and documentation, third-party oppositions, as well as licensing and assignment documentation. Click here to download the publication.

Ganado Advocates has contributed to the Malta chapter in the 2025 edition of Lexology Panoramic – Restructuring and Insolvency guide. This publication delves into excluded entities and assets, insolvency regarding public enterprises, protection for large financial institutions, voluntary/involuntary liquidations & reorganisations, corporate procedures for the dissolution of a corporation the conditions for insolvency & the relevant filing procedures, Directors’ duties, powers & liability in such cases, intellectual property assets, personal data restrictions, and employment-related liabilities among other topics Click here to download the publication.

Ganado Advocates has contributed to the Malta chapter in the 2025 edition of Lexology Panoramic: Financial Services Compliance. The publication provides valuable local insight into various aspects of the regulatory framework governing financial products and services in Malta, covering enforcement powers, including tribunals and penalties, compliance programmes, crossborder issues, and current trends. Click here to access our contribution and gain insights into financial services compliance in Malta.

Ganado Advocates has contributed to the Malta Chapter of the 4th edition of the Legal 500 Renewable Energy Comparative Guide. This chapter provides an overview of Malta’s legal and regulatory framework for renewable energy, covering licensing, incentives, and compliance matters relevant to businesses in the sector. For more information, access the full publication here.

The general provisions found under Council Directive 93/13/EEC of 5 April 1993 on unfair terms in consumer contracts (the “Unfair Terms Directive”), which is aimed at safeguarding consumer rights in contracts with suppliers, have often been analysed and supplemented by judgments of the Court of Justice of the European Union (“CJEU”) over the years. Particularly in relation to banking and financial contracts, the CJEU has assessed specific terms in such contracts, including clauses on variable interest rates and foreign currency loans, alleged to be unfair. The CJEU’s ruling in the joint cases of Abanca Corporación Bancaria SA v. WE (C-6/24) and VX (C-231/24), delivered on 8 May 2025 is in fact another judgment added to the list of cases concerning the interpretation of the Unfair Terms Directive, particularly in the context of personal loan agreements. Background and Facts of the Case Abanca Corporación Bancaria SA (the “Bank”) extended two separate personal loan agreements with the two defendants in this case. The terms and conditions of the two loan agreements included a clause granting the Bank the right to initiate a procedure to accelerate the repayment of the full loan in the event of non-payment by the borrowers, hence rendering the outstanding balance due for immediate repayment (the “Acceleration Clause”). In accordance with the loan terms and conditions, one of the conditions which should have subsisted in order for the Acceleration Clause to be considered triggered is that the borrower must have been given notice by the Bank to pay the amount due within one month. In this respect, it is worth noting that Spanish law on mortgage loan agreements explicitly requires that the possibility of a creditor to trigger the acceleration of repayments in case of default is conditional upon the provision by the lender to the borrower of such one-month notice. A similar requirement is however not found under Spanish law applicable to personal loan agreements. The borrowers defaulted in their repayments and the Bank proceeded to initiate the procedure to trigger such Acceleration Clause by bringing two cases in respect of both borrowers before the Juzgado de Primera Instancia No 8 de La Coruña (Court of First Instance No 8, A Coruña, Spain) (the “Referring Court”). In considering whether the Acceleration Clause in the personal loan agreements is an unfair term in accordance with the national law transposing the Unfair Terms Directive, the Referring Court needed to determine which factors it should take into account for the assessment of the unfairness of such a clause. In this regard, the Referring Court was faced with the question it eventually referred to the CJEU for a preliminary ruling: is an acceleration clause which enables or prevents acceleration within a certain period of time consistent with the Unfair Terms Directive, particularly Article 3(1) thereof (further explained below), or does the possibility of acceleration have to be provided for in national law? The provision under Spanish law applicable to mortgage agreements may have particularly triggered this question brought forward by the Referring Court, since national law does not equally provide for the acceleration of repayments in case of default which would be preceded by a one-month notice. Furthermore, the Referring Court also referred a sequential question on what period of time would be considered reasonable as a condition for the enforcement of such acceleration of repayments. CJEU Considerations General considerations By referring to the primary objective of the Unfair Terms Directive being that of ensuring consumer protection, the CJEU reiterated the notion contemplated by such Directive that the consumer is in a weak position, both in respect of bargaining power and of the level of knowledge. This is evidenced in Article 3(1) of this Directive, which categorises as unfair any contractual terms which has not been individually negotiated where it causes a significant imbalance in parties’ rights and obligations under the contract, to the detriment of the consumer in question. Article 6(1) of the Directive renders such an unfair term to be not binding on the consumer. The CJEU acknowledged that the Unfair Terms Directive only generally defines the criteria which must be considered to render unfair a contractual term that has not been individually negotiated. Previous case law on this matter has highlighted that all circumstances relevant to the conclusion of the contract and to all other terms of the contract must be considered in this respect. The CJEU in fact referred to a previous judgment where it was held that, in determining whether a clause in a contract places the consumer in an unfair detrimental position, national courts must examine whether the option available to the supplier to request the repayment of the total amount due is conditional upon the consumer’s non-compliance with an obligation which is “of essential importance” in the contractual relationship. Amongst other factors, consideration must also be had to the option being provided for in cases where consumer’s non-adherence to legal obligations is serious enough in the context of the duration and amount of the loan. In its consideration of the questions referred, the CJEU noted that the consumers’ obligations that were not complied with (namely, the non-payment of the loan instalments) is essential in the context of the contractual relationship and sufficiently serious in light of the duration and amount of the loan. National law provisions on acceleration In assessing the Referring Court’s question as to whether national law should expressly provide for a consumer’s ability to avoid the accelerated repayment of the loan, the CJEU referred to the assessment which the Referring Court must conduct of the effectiveness and adequacy of the means available to the consumer to avoid the application of such accelerated repayment. In this respect, the CJEU concluded that the absence of a rule under national law specifically applicable to personal loan agreements in this respect is irrelevant to the assessment and does not on its own render the Acceleration Clause unfair within the meaning of the Unfair Terms Directive. Consequently, the possibility for the consumer to avoid the accelerated repayment being set out in the Acceleration Clause in the loan agreement is a factor which is to be considered by the Referring Court in assessing whether such Clause is unfair, and it is therefore unnecessary for national law on personal loan agreements to explicitly provide for this possibility. Adequacy of the one month notice period With respect to the time period afforded to the consumer to pay overdue amounts (i.e. one month) before acceleration is triggered, the CJEU also referred to preceding case law on this matter. The CJEU previously held that, for a limitation period to be considered effective, it must be long enough to allow a consumer to bring an effective action to enforce the rights granted under the Unfair Terms Directive and the consumer must have had the opportunity to become aware of such rights before the limitation period started to run or expired. A further consideration made by the CJEU was the practical implementation of the provision under Spanish law applicable to loan agreements secured by mortgages on immovable property, which provision similarly affords the consumer a period of one month to repay the amounts due. The CJEU noted the relevance of this legal provision, despite the fact that this national law applies to different types of loan agreements. The fact that the one-month period is sufficient in practice to enable the consumer to repay the amounts is to be taken into account, according to the CJEU. The CJEU here expressed its view on the unfairness of the clause allowing the consumer a period of one month’s notice, as it noted that a conclusion by the Referring Court to the effect that such period is an adequate and effective means to enable the consumer to avoid the application of the Acceleration Clause would be plausible. Conclusion Although the CJEU generally leaves it to the discretion of national courts to determine what clauses in consumer contracts should or should not be considered “unfair”, this CJEU ruling sheds light on how fairness is calculated in respect of clauses in loan agreements, particularly where acceleration clauses requiring the immediate repayment of the total loan sums due are concerned. The questions submitted in these joint cases for preliminary ruling also continue to highlight the generality of the Unfair Terms Directive, which is a rather old legal instrument that may now be deemed to require a review to better eliminate grey areas addressed by national courts. Disclaimer: Ganado Advocates is responsible for contributing to this law report but was not in any way involved as legal advisor for the parties in the judgement being covered in this law report. This article was first published in ‘The Malta Independent’ on 04/06/2025.

The most recent amendments to the Maritime Labour Convention (MLC) of 2006, represent a significant step in strengthening the rights and welfare of seafarers. These changes, adopted at international level during the 110th session of the International Labour Conference have been transposed into Maltese law through Legal Notice 26 of 2025 and published by Transport Malta through the Merchant Shipping Notice No. 190 of the 5th February 2025. The amendments respond to critical issues exposed during the COVID-19 pandemic and reflect a broader commitment to the progressive enhancement of international maritime labour standards. A significant addition to the regulatory framework is introducing a mandatory wage protection system. Under the newly inserted Regulation 19A of the Merchant Shipping (Maritime Labour Convention) Regulations (Subsidiary Legislation 234.51 Laws of Malta), shipowners are now required to ensure that an insurance mechanism or an equivalent appropriate measure is in place to compensate seafarers for monetary losses resulting from the failure of a recruitment or placement service, or the shipowner’s non-fulfilment of contractual obligations under a seafarer’s employment agreement. As outlined under Regulation 1.4 and Standard A1.4 of the MLC, such failures may include, the unlawful charging of recruitment fees to seafarers, the provision of misleading or fraudulent employment information, failure to arrange the agreed placement after a seafarer has incurred related expenses due to administrative negligence. Furthermore, seafarers must be informed, either before or during the engagement process, of their entitlements under this protective scheme. Regulation 54 pursues the same objective of wage protection and affirms that a seafarer’s entitlement to wages is not contingent upon the earning of freight. This provision reinforces the principle that wages are payable under the employment agreement, regardless of the voyage’s commercial outcome. Another important development is the enhancement of onboard nutrition standards. Shipowners must now provide food and drinking water free of charge, ensuring that all meals are balanced, nutritious, and sufficient in both quantity and quality. While the MLC does not prescribe a specific dietary or caloric standard, these requirements are understood to be assessed according to national health guidelines and relevant ILO recommendations, such as those found in the ILO Guidelines on the Training of Ships’ Cooks. Compliance is typically evaluated through a combination of onboard inspections, crew feedback, and documentation of food provisions. Occupational safety requirements have also been reinforced. Shipowners are obliged to provide appropriately sized personal protective equipment to all seafarers. This measure aims to prevent occupational accidents and reflects a greater focus on the suitability and adequacy of protective gear provided onboard. The obligation to report deaths of seafarers occurring on board Maltese-flagged vessels was already established under national law, specifically under the Merchant Shipping Act. The 2025 amendments build upon this framework by introducing an international reporting obligation. Finally, the amendments also address the social dimension of seafarers’ welfare. Shipowners are now required to ensure that recreational facilities support social connectivity. This includes, where available, reasonable access to ship-to-shore telephone communications and internet connectivity. These measures aim to mitigate the psychological strain of long periods at sea and promote mental well-being, an area of concern brought into sharp focus during the COVID-19 pandemic. The amendments introduced to domestic legislation earlier this year, rooted in the outcomes of the 110th Session of the International Labour Conference, entered into force internationally on 23 December 2024, aligning national frameworks with evolving global maritime labour standards. This article was co-authored by Matteo Fugazza.

Ganado Advocates is the author of the Malta chapter in the Chambers Global Practice Guide 2025 on Artificial Intelligence (AI). The publication serves as definitive global law guide, offering comparative analyses from global top-ranked lawyers. In this Malta Chapter, the authors provide a comprehensive overview of Malta’s legal and regulatory landscape concerning AI, whilst also examining the general legal framework, commercial applications, sector-specific regulations, and the impact of EU law on AI in Malta. Click here to download the publication.

The European Securities and Markets Authority (“ESMA”), the EU’s financial markets regulator and supervisor, has today released its final reports on the Prospectus Regulation and on civil prospectus liability. The reports set out recommendations designed to support capital markets activity by streamlining regulatory requirements. Prospectus Regulation As part of its efforts to enhance access to the capital markets, the European Commission adopted a legislative package – commonly referred to as the ‘Listing Act’ – to simplify the listing requirements to promote better access to public capital markets for EU companies, in particular SMEs, by reducing the administrative burden on companies that seek a listing or want to remain listed on a trading venue. To this end, ESMA has, on the request of the European Commission, published its final report setting out inter alia proposed amendments to (1) Commission Delegated Regulation (EU) 2019/980 and (2) Commission Delegated Regulation (EU) 2019/9791. The most relevant amendments for issuers and advisers will be the amendments to Commission Delegated Regulation (EU) 2019/980 (“CDR 980”) which set out, amongst other things, the relevant disclosure requirements (annexes) to be complied with when drafting a prospectus. A clean version of the updated CDR 980 is available here. Unfortunately, the markup provided by ESMA is not very helpful, as it does not show all the proposed changes to the CDR. It only reflects the additional changes that ESMA is proposing since the publication of its initial consultation paper on 28 October 2024, which itself included a markup of the earlier proposed updates to CDR 980. It would be helpful if ESMA could publish a consolidated markup showing all proposed changes to CDR 980 to allow for a clearer understanding of the full set of amendments. Although ESMA has submitted its final report to the European Commission, it is not immediately clear to us when the proposed amendments to the CDR will enter into force. Civil Prospectus Liability Under the Prospectus Regulation, the European Commission is required to assess whether further harmonisation of the provisions across the European Union on prospectus liability is warranted. If so, the European Commission is to consider amendments to the liability provisions set out in article 11 of the Prospectus Regulation. On this basis, on 6 June 2024, the European Commission mandated ESMA to provide technical advice on civil liability regarding the information given in prospectuses to include an assessment and recommendations on whether further harmonisation should be considered. The European Commission further asked ESMA to compare the civil liability provisions in article 11 of the Prospectus Regulation with those set out in the Markets in Crypto Assets Regulation (MiCAR) and to assess the need for possible alignment with or departure from those provisions. To this end, ESMA’s final report setting out the technical advice on civil prospectus liability includes: a summary of feedback to ESMA’s call for evidence on civil prospectus liability, where many respondents consider the current framework to be sufficiently balanced and argue that no changes are required at present – this includes a section of civil liability in Malta; ESMA’s resulting recommendations; and an update of the relevant sections of ESMA’s 2013 report on prospectus liability addressing civil prospectus liability. The 2013 report can be accessed here. The updated 2025 report can be accessed here. The European Commission is required to present a report to the European Parliament and the Council by 31 December 2025. This report will assess the current regime for prospectus liability and consider whether further harmonisation at EU level may be appropriate. [1] Commission Delegated Regulation (EU) 2019/979 of 14 March 2019 supplementing Regulation (EU) 2017/1129 of the European Parliament and of the Council with regard to regulatory technical standards on key financial information in the summary of a prospectus, the publication and classification of prospectuses, advertisements for securities, supplements to a prospectus, and the notification portal, and repealing Commission Delegated Regulation (EU) No 382/2014 and Commission Delegated Regulation (EU) 2016/301.

On 25 February 2025, the Court of Justice of the European Union (CJEU) issued a pivotal ruling in BSH Hausgeräte GmbH v. Electrolux AB (Case C-339/22), addressing jurisdictional issues in cross-border patent litigation. The Court held that a Member State court retains jurisdiction to hear an infringement action under Article 4(1) of Regulation (EU) No 1215/2012 (“Brussels I bis Regulation”), even when the defendant challenges the validity of the intellectual property (“IP”) right. Additionally, the ruling sheds light on how disputes involving IP rights registered in non-EU countries – such as Turkey – are to be handled. Background The case originated from proceedings brought before the Swedish Patent and Commercial Court by BSH, a Swedish company, alleging that Electrolux had infringed its European Patent EP1434512 concerning vacuum cleaners. The patent had been validated in several EU Member States and in Turkey. BSH sought an injunction and damages across all relevant jurisdictions. In response, Electrolux disputed the validity of the patent and challenged the jurisdiction of the Swedish court. They argued that under Article 24(4) of the Brussels I bis Regulation, the Swedish court lacked competence to adjudicate the infringement claim because questions of validity and infringement were inseparable and should be heard exclusively by courts with authority over patent validity. This prompted the Swedish appellate court to refer several questions to the CJEU, including: Whether a court competent under Article 4(1) loses jurisdiction over an infringement action if the patent’s validity is contested. Whether the need for a separate invalidity action under national law influences jurisdiction. Whether Article 24(4) applies to patents registered in third countries, such as Turkey. The CJEU’s ruling In making its assessment, the CJEU firmly sided with BSH, delivering a judgment that both narrows and clarifies the interpretation of Article 24(4). The Court emphasised that Article 24(4), which confers exclusive jurisdiction to the courts of the Member State where a patent is registered to determine its validity, must be read narrowly. It is an exception to the general rule in Article 4(1), which grants jurisdiction to the courts of the Member State where the defendant is domiciled. The CJEU held that a court seized under Article 4(1) retains jurisdiction to adjudicate a patent infringement claim, even if the defendant challenges the validity of the patent. Secondly, while that court cannot determine the validity of a foreign patent with erga omnes (universal) effect, it may still rule on infringement claims. Decisions on invalidity made in the context of infringement proceedings have inter partes effect only, meaning that they bind only the parties to the case and do not affect the status of the patent in the jurisdiction of registration. Where there is a credible challenge to validity, the infringement court has the discretion to stay the proceedings pending a decision by the competent court on validity. The court also highlighted the fact that the mere raising of an invalidity defence does not shift jurisdiction; otherwise, Article 24(4) would transform from an exception into a rule, undermining the principle established by Article 4(1). Third-country patents The judgment also addressed the scenario involving third-country IP rights, such as Turkish patents. As Turkey is not covered by the Brussels I bis Regulation, jurisdiction must be assessed under alternative frameworks. These include, specific instruments like the Lugano Convention (Article 73(1)) or bilateral agreements, provisions on lis pendens and related actions (Articles 33 and 34), and general principles of private international law. Under these regimes, a Member State court may still rule on the validity of a third-country patent with respect to the parties only, provided it has jurisdiction over the defendant. However, such a ruling does not affect the legal existence or registration of the patent in the third country itself. Implications The judgment effectively narrows the scope of the CJEU’s earlier decision in GAT v. LuK (C-4/03), decided in 2006, which required a court to decline jurisdiction entirely if patent validity was contested. This change is significant for cross-border IP litigation, particularly concerning European patents. The decision enables rightsholders to consolidate infringement claims in the court of the defendant’s domicile, even when the patent is protected in a number of Member States. In the context of the Unified Patent Court (“UPC”), the ruling reinforces that where a defendant is domiciled in a UPC Member State, the UPC has jurisdiction under Article 71a of the Brussels I bis Regulation. However, a defendant challenging validity must still bring invalidity actions in each Member State where the patent is validated, unless those parts fall under UPC jurisdiction. Where the patent has been opted out of the UPC system, the national court of the defendant’s domicile still holds general jurisdiction for infringement. But again, separate actions must be brought to contest validity in the respective Member States, and a suspension of proceedings may follow if invalidity is raised as a defence. Therefore, this decision has practical implications for how litigants approach venue selection and strategic coordination of infringement and invalidity actions across the EU. Conclusion In conclusion, the Grand Chamber of the CJEU’s judgment in BSH v. Electrolux provides authoritative guidance on the jurisdictional interface between infringement and validity disputes in cross-border IP cases under the Brussels I bis Regulation. It confirms that the existence of a validity challenge does not divest the court of the defendant’s domicile of its jurisdiction to hear an infringement claim. By reinforcing a narrow interpretation of Article 24(4), the ruling ensures that plaintiffs are not deprived of their right to consolidate infringement claims, thereby fostering legal predictability and procedural efficiency. At the same time, it protects the role of competent courts in deciding validity issues, preserving the integrity of national IP registers. The judgment will undoubtedly influence national court practice and strategy in the years to come, including that of the First Hall of the Civil Court in Malta. This will also likely encourage an uptick in cross-border enforcement actions and will shape the procedural landscape of both national IP litigation and proceedings before the UPC. Legal practitioners and rightholders alike will need to recalibrate their strategies in light of this landmark decision. Disclaimer: Ganado Advocates is responsible for contributing to this law report but was not in any way involved as legal advisor for the parties in the judgement being covered in this law report. This article was first published in ‘The Malta Independent’ on 11/06/2025.

Introduction In today’s rapidly evolving global economy, ships are identified as key industry players by virtue of their day-to-day cross-border voyages making them one of the most essential and volatile economic units. The invaluable nature of shipping must not be underestimated, especially considering that it transports about 90% of global trade whilst simultaneously being the least environmentally harmful mode of transportation, as held by the International Maritime Organization (“IMO”).1 One crucial factor to be considered is the international character of maritime law since it is within every ship’s lifetime that it will be owned, chartered and/or used by people from different jurisdictions.2 Therefore, it is important to note that the ship will be subject to the laws of the flag State, to be analysed on a case-by-case basis. The unique nature of ships can be seen in Malta’s own legislation, where they are classified as ‘a particular class of moveable property which are separate and distinct assets from any other asset within the estate of their owners…’.3 Another unique aspect of ships is that they are often used as a security interest, however this does not come without its pitfalls. Given the transnational nature of ships, often is the case that purchasers of second-hand ships through a judicial sale encounter obstacles in other jurisdictions with its recognition and enforcement. Before the introduction of the United Nations Convention on the International Effects of Judicial Sales of Ships4 (“Convention”), there was a vacuum on the uniform interpretation of the effects of a judicial sale in an attempt to avoid conflict. Naturally, such a risk would seriously jeopardise the strength of the security allocated to the ship whose clean title is being questioned, which is why the Convention was welcomed by the industry with open arms. As a result of the above discussed matters, Section 1 will explore the nature and characteristics of ship arrests, judicial sales under Maltese law along with a comparative analysis of judicial sales in other jurisdictions. Section 2 then delves into how the Convention seeks to aid the industry by enforcing judicial sales and also explores case law concerning challenges faced in the enforcement of a title of ownership, which is obtained clean and unencumbered. This submission has been prepared based on information available as of October 31, 2024 and therefore subsequent developments may affect the accuracy and relevance of the information presented. Section 1: The elements of a judicial sale by auction As mentioned above, a ship can act as a security for obtaining financing through a mortgage registered over the subject ship. The lender (mortgagee) would be able to enforce his rights under the mortgage should the borrower (mortgagor), who would usually be the shipowner, be in default. In such a situation, the mortgagee would be entitled to enforce his rights under the mortgage and proceed to sell the ship. One of the ways in which the ship may be sold is through a judicial sale by auction. 1.1 Arresting of ships to permit the eventual judicial sale Malta’s legislation surrounding ship arrest makes it more than favourable for creditors to enforce their claims over defaulting ships. Re-registration under the Maltese flag following a judicial sale by virtue of recognition of said sale from a foreign jurisdiction is paramount and is one of the factors that makes our flag the largest ship register in Europe. The procedure of a judicial sale by auction under Maltese law may only occur upon obtaining an executive title as held within the Code of Organisation and Civil Procedure5 (“COCP”) via ‘judgements and decrees of the courts of justice of Malta’6 as held under Article 253. In the case of a ship sale, an executive title may be enforced by a ‘judicial sale by auction of movable or immovable property or of rights annexed to immovable property’7 or a ‘warrant of arrest of sea vessels’8 amongst other methods of enforcement including foreign judgements and court approved private sales. The abovementioned mortgage is also considered to be an executive title under Article 253, as held under Article 42(2) of the Merchant Shipping Act (“MSA”).9 With regard to the actual arresting of the ship, recourse under Maltese law comes in two forms; a precautionary and an executive warrant of arrest. Article 855 of the COCP describes that a precautionary warrant of arrest of a sea-going vessel may be issued against all vessels having a length exceeding ten metres which may solely be issued to secure a debt or claims, whether in personam or in rem, which could be frustrated by the departure of the said ship.10 Said claim or debt must not be less than seven thousand Euros (€7,000) for the precautionary warrant to be issued.11 As mentioned above, the claim to be secured can be of an in rem or an in personam nature. An action in rem is one that would be initiated against the ship directly as the primary object of the action. The action in rem prevents a creditor from initiating proceedings against the debtor himself (in personam) and would be against the res itself (the ship). The main characteristic of the action in rem is that it is linked with the content and utility of the maritime security along with the practical necessity for a mechanism of payment of debts when the debtor may be difficult to locate and also considering that the ship moves around the globe out of reach of the courts and does not escape proceedings.12 Where an in rem claim is involved, the creditor must present prima facie evidence that his claim falls under one of the claims listed under Article 742B of the COCP. Upon the issuance of the precuationary warrant of arrest, the creditor must file an application on the merits within twenty days from said date of issuance.13 Following the decision of the First Hall Civil Court (“FHCC”), the precautionary warrant is rendered as an executive title once the twenty day appeal period elapses, following which, the judgement is rendered as a res judicata. If appealed, the executive title will be enforceable after two days from the delivery of the judgement by the Court of Appeal (“CoA”).14 If a creditor is enforcing his claim by means of a registered mortgage, the MSA implies that the mortgage itself is considered to be an executive title ab initio upon default of the mortgagor. However, in practice, the mortgagee would still need to file an application for a precautionary warrant of arrest to be issued to secure the ship, whilst also informing the mortgagor by means of a judicial letter to determine the sum which is certain, liquidated and due.15 The reasoning behind the precautionary warrant of arrest is that it primarily acts as a method of safeguarding creditor interests. Following the ship’s arrest, the next step is for the precautionary warrant of arrest to be converted into an executive one which is done through the filing of a note by the execution creditor in the acts of the precautionary warrant within fifteen days from the judgement becoming a res judicata whereby such note would request to convert it into an executive warrant.16 However, this does not automatically mean that the execution creditor may proceed with the judicial sale of the subject ship as it is still within the Court’s discretion to determine whether it shall order the sale or establish a date by when the debtor is to pay what is owed to the creditor.17 Should the Court approve the judicial sale by auction, then the procedures as laid down in the COCP are to be followed. 1.2 The judicial sale by auction under Maltese law Upon the issuance of an executive warrant of arrest, a ship can be sold through the Maltese courts in one of two ways: 1) a judicial sale by auction or 2) a court approved private sale. Given the topic of this submission, the authors will focus on the judicial sale by auction. Despite both forms of sale being very different from one another, they both result in the ship being sold with a clean title of ownership. Prior to engaging in the judicial auction itself, the sale is to be advertised by means of advertisements placed in two newspapers, one in English and another in Maltese, with the aim of attracting interested bidders.18 One of the risks associated with the judicial sale by auction is that there is a lack of reserved price, which is a concern to competing creditors as the ship may be sold for less than its current market value. Whereas Article 319(5) stipulates that ‘no offer may be accepted if such offer is less than sixty (60%) of the value at which the movable or immovable property or the going concern has been appraised’, the second proviso dictates that this “safety net” does not apply to ships exceeding ten metres in length. This uncertainty in the purchase price results in the proceeds of the sale potentially not being able to satisfy all creditor claims. Due to the lack of control over the purchase price, legislators introduced the court approved private sale in 2006, which offers creditors more assurance since the fear of uncertainty on the purchase price is eliminated as there would be mutual agreement between the parties beforehand on the price. To facilitate agreement between the parties on the purchase price, along with the application, the creditor must also submit two valuations from independent and reputable valuators. Within said application, the execution creditor must also include evidence that the ‘private sale is in the interest of all known creditors and that the price offered by the proposed buyer is reasonable with the circumstances of the case’19 and is within acceptable range of the valued price of the ship. 1.3 Judicial sales in other jurisdictions: Singapore and Panama Before discussing the Convention in detail, one must compare and contrast how judicial sales by auction operate in other jurisdictions; namely Singapore and Panama. As at the writing of this submission, only Singapore has signed the Convention,20 whereas Panama has yet to do so.21 Placing the spotlight on Singapore, there are three primary bodies of legislation which speak on judicial sales of ships namely: the Admiralty and Maritime Law Act22 (“AMLA”), the Supreme Court of Judicature Act23 (“SCJA”) and the Merchant Shipping Act24 . The AMLA specifies that in the exercise of its admiralty jurisdiction, the General Division of the High Court orders any ship, aircraft or other property sold, the General Division of the High Court shall have jurisdiction to hear and determine any question arising as to the title of the proceeds of the sale. Similarly to Malta, in Singapore an action in rem may (whether or not the claim gives rise to a maritime lien on that ship) be brought in the General Division of the High Court against that ship, if at the time when the action is brought the relevant person is either the beneficial owner of that ship as respects all the shares in it or the charterer of that ship under a charter by demise or any other ship of which, at the time when the action is brought, the relevant person is the beneficial owner as respects all the shares in it.26 This echoes what is held under Article 742D of the COCP. Whereas the SCJA does not directly reference judicial sales, it nonetheless mentions enforcement orders for the seizure and sale of property and which property may not be subject to such seizure and sale.27 Although not directly related to judicial sales by auction, similarly to Article 358 of the COCP, which speaks on court approved private sales, Singapore’s Merchant Shipping Act lays down that the order of the court is to contain a declaration vesting in some person named by the court the right to transfer that ship or share, and that person is thereupon entitled to transfer the ship or share in the same manner and to the same extent as if that person were the registered owner thereof.28 The procedure of a judicial sale by auction is governed by the Rules of Court29, a subsidiary legislative act under the SCJA, which dictate that upon a creditor obtaining a favourable judgement, they are to apply to the courts to request an auction. Similarly to the provisions under the COCP, the sale is auctioned in newspapers to attract interested bidders, with the difference that after the ship has been sold, the courts may order that within fourteen days following the sale, a notice is published which states that: The ship was sold by order of the court by means of an action in rem and such action is identified; The specified amount of proceeds of the sale have been deposited in court; The ranking of claims will not be determined until after the expiration of the period30 specified in the order of the sale; Any creditor with a claim against the ship on which the person intends to proceed to judgement should do so before the expiration of that period.31 On the other hand, Panama is not yet a signatory to the Convention as at the writing of this submission. Despite not being a party to the Convention, Panama, as the second-largest register globally in terms of registered tonnage,32 is still a party to key international conventions such as the International Convention on the Arrest of Ships.33 Panamanian legislation which governs the arrest of ships and the eventual judicial sales is Law No. 8 of 1982.34 Said law dictates that the order of arrest is served upon the person in charge and has custody of the vessel and in the proceedings to enforce one’s claims, such service is deemed to constitute service of process upon the defendant.35 Upon obtaining a favourable judgement, the execution creditor may proceed with the judicial sale of the vessel, where in the case of a Panama-registered vessel, the Court shall obtain details of all registered mortgages, encumbrances or arrests along with her cargo and freight.36 The Court shall then hold a meeting between all other claimants and shall order the publication of an edict in a local newspaper for five days and for ten days at the Public Registry of Property of Vessels (“PRV”) of the Panama Maritime Authority.37 Once fifteen days elapse from the expiry of the PRV’s publication, the vessel may be sold via judicial sale whereby the funds are to be deposited in the name of the Court into a non-interest-bearing account with the Banco Nacional de Panama.38 Article 522 of Panama’s Maritime Code lays out the procedure to be abided by in special proceedings for the enforcement of mortgages, whereby the claim must be accompanied by prima facie evidence of its existence, specifically the registration of the vessel and the mortgage affecting it, and the amount secured by said mortgage.39 A judgement is then delivered on the claim not more than thirty days from when it was presented. A notable difference from the judicial sale procedure from Malta is that in Panama, the Court shall fix three different dates, where each date shall not be less than five but not more than ten days apart from one another.40 On the date when the vessel is first offered for sale, she may not be sold for less than three-quarters (¾) of her estimated market value, where if no adequate bid is made, a fresh notice is published, and another auction takes place on the second scheduled date. During the second auction, the vessel may not be sold if an offer of at least half of her appraised value is made, in the absence of which, the third and final auction is held, where the vessel is sold to the highest bidder without a minimum price threshold.41 For a bid to be deemed valid for the purposes of the judicial sale by auction, bidders must deposit five percent of the market value price of the vessel. This only applies to interested bidders who are not creditors since they are entitled to place bids against their credits and ensures the legitimacy of the bids placed and that only credible bidders may participate. If a bid is successful, the deposit is deducted from the purchase price whereas if the bid is not the winning one, the deposit is returned to the bidder.42 This section has outlined the basic process of ship arrest and judicial auction, both locally and internationally, while emphasizing the role of the Convention in aiding potential bidders and new shipowners. Although domestic law is crucial in conducting judicial sales, it would be fruitless if the sale’s effects are not globally recognized. The following section examines case law which shows issues encountered in the past, along with the Convention’s key provisions, highlighting its essential role in the international shipping industry. Section 2: A Call For an International Intervention The judicial sale of ships is a mechanism through which a creditor can seek to satisfy his claim against a ship or a shipowner. Considering the special nature of ships as a security interest and that they are constantly operating on a transnational basis, various intricacies may arise when one purchases second hand tonnage via a judicial sale and when such person seeks to obtain its recognition in another jurisdiction. The purpose of a judicial sale is two-fold: a) the proceeds from the sale are used to satisfy claims against the ship and b) the new owner obtains a clean title to the ship, free from any encumbrances. This second limb has been the subject of controversy as evidenced in jurisprudence for the simple reason that there is no uniform interpretation with regard to the effects of a judicial sale and thus may give rise to conflicting scenarios in different jurisdictions. If there are doubts as to the effects of a judicial sale on an international scale, the value of the security represented by the ship would be heavily affected. This is why the recognition of judicial sales on a cross-border basis is crucial for the modern shipping industry. While there are other foreign judgements which highlight the difficulties faced by practitioners in these situations, one particular case before the Maltese courts has added further fuel to an ever-growing flame. The judgements in question relate to the saga revolving the M.V. Bright Star (previously named the M.V. Trading Fabrizia). 2.1 The M.V. Bright Star Conundrum In this contribution the authors will specifically consider the following decisions in the following chronology: Marlon Borg as special mandatary for and on behalf of Jebmed S.r.l vs M.V Bright Star, delivered by the FHCC on the 12 July 2018 and of the CoA on the 8 February 2019,43 (hereinafter the judgment will be referred to as the “Bright Star I”); and Dr. Ann Fenech, as special mandatary for and on behalf of Bluefin Marine Limited and the ship ‘M.V Bright Star’ vs Jebmed S.r.l delivered by the First Hall Civil Court on the 14 January 2020 and 27 May 2021 and both confirmed on appeal by the CoA on the 12 January 202343 ((hereinafter the judgment will be referred to as the “Bright Star II”). By way of initial background, the Malta-flagged ship, M.V. Bright Star was owned by Capitalease S.p.A. A ship mortgage was registered with the Maltese Ship Registry against the ship and in favour of Jebmed S.r.l (“Jebmed”). The shipowner defaulted on the mortgage and Jebmed rendered the mortgage an executive title under Article 42 of the MSA and Article 253 et seq of the COCP.45 In June 2017, the ship was arrested in Jamaica and a judicial sale by auction was ordered on the request of, inter alia, Jebmed. In January 2018, the ship was acquired by Bluefin Marine Limited (“Bluefin”), for a price of $10,300,000. Subsequently the Jamaican court issued (i) a bill of sale stating that “the ship above particularly described has been freed from all liens and encumbrances and debts whatsoever…” and (ii) a certificate of sale certifying that the ship was sold to Bluefin “free of all mortgages, liens and encumbrances whatsoever”. Notwithstanding the above, while the ship, now named MV Bright Star, was taking on bunkers in Maltese waters, Jebmed filed for an executive warrant of arrest over the ship on the strength of the mortgage in its favour, which warrant was duly accorded by the court on 19 June, 2018. In this regard, reference should be made to Article 37D(1) (proviso) of the MSA which provides that: where a ship has been sold pursuant to an order or with the approval of a competent court within whose jurisdiction the vessel was at the time of the sale, the interest of the mortgagees as well as of any other creditor in the ship shall pass on to the proceeds of the sale of the ship… Therefore, considering the above, following the judicial sale in Jamaica, Jebmed’s rights would have been against the proceeds which arose from the judicial sale in Jamaica, and not against the ship itself on the basis of the mortgage. Immediately following the issuance of the executive warrant of arrest, Bluefin made an application for a counter-warrant which was duly accepted following the deposit of a sum in the amount of €779,346.61 with the court (the “Sum Deposited”). Thereafter, the arrest warrant was lifted, and the ship was allowed to set sail.46 Subsequently, Bluefin filed an action arguing inter alia that the executive warrant of arrest ran contrary to Article 37D(1) of the MSA (cited above) and therefore requested its revocation under Article 281 of the COCP on the basis that the reason for the issuance of the warrant, being the executive title under the mortgage did not subsist. The FHCC rejected the application on procedural grounds noting that the ship had to file separate proceedings in order to impugn Jebmed’s executive title.48 Bluefin, filed an appeal from this decree. The CoA had to consider whether the ship could rely on the remedy provided under Article 281 of the COCP47 on the basis that following the judicial sale in Jamaica, Jebmed’s rights were no longer secured by the mortgage and accordingly it no longer had an executive title to rest upon. The ship reiterated that pursuant to the judicial sale, the ship was sold free and unencumbered, and in terms of the proviso of Article 37D(1), the mortgagee’s rights were against the proceeds of the sale, not the ship. The ship also referred to an order issued by the Jamaican Court which confirmed that a sum of $3,000,000 from the proceeds of the judicial sale were set aside to protect Jebmed’s claims.49 In a decree delivered on the 8 February 2019, the CoA was of the view that while pursuant to the proviso of Article 37D(1), a ship sold via a judicial sale clears the ship from any mortgage, it must also be shown that the rights and interests of a mortgagee would pass to the proceeds from the judicial sale. The CoA was not satisfied that in this case, Jebmed’s rights passed onto the proceeds of the Jamaican judicial sale and therefore it could not recognise the judicial sale in Jamaica as conferring a clean and unencumbered title. This reasoning was based on Jamaican law, under which the mortgage was not immediately enforceable as an executive title. The mortgagee had to prove its claim in Jamaican courts, where the mortgage served only as evidence of the claim, unlike under Maltese law. Secondly, the CoA was of the view that the mortgage was not privileged over other claims under Jamaican law.50 Unfazed by this, Bluefin filed separate ad hoc proceedings in the hope of righting the wrong caused by the judgment in the Bright Star I. In a nutshell Bluefin requested the FHCC to (i) declare the arrest null and void, (ii) order the release of the Sum Deposited in its favour and (iii) liquidate damages caused by the issuance of the warrant of arrest. In its reply, Jebmed in primis, raised the plea of res judicata, arguing that the merits of the new case instituted by Bluefin were already definitely decided up on by decrees delivered by the FHCC and the CoA in the Bright Star I and therefore the FHCC could not entertain the same merits in this case. In its preliminary judgment on the 14 January 2020 dealing with this defence, the FHCC noted that proceedings instituted under Article 281 of the COCP are meant to consider whether the execution of an executive title is valid or not rather than considering whether the merits of the executive title are valid. Various judgments have held that the revocation of an executive warrant under Article 281 of the COCP is aimed at finding any form of irregularity in the executive warrant itself and not the executive title on the basis of which it was issued. Considering the above, the FHCC held that while proceedings for the revocation of the executive warrant of arrest have already been brought and decided upon, this latter case brought by Bluefin relates to the actual merits of the issuance of the executive warrant of arrest, a matter which has not been adjudicated. Accordingly, it rejected the plea.51 Moving ahead to the judgment on the merits of Bright Star II, the Court noted that the merits revolved around a simple (yet loaded) question: did the judicial sale of the ship in Jamaica extinguish Jebmed’s right to arrest the vessel in Malta on the basis of the same credit which is reserved for Jebmed in Jamaica? Jebmed argued that the judicial sale did not have the effect of extinguishing the mortgage because the courts in Jamaica did not recognise its executive title.52 The FHCC was of the view that the proviso to Article 37D(1) of the MSA was clear enough to extinguish any doubt. While Article 37D(1) stipulates that a mortgage is not discharged until it is settled, the proviso is an exception to this rule which ensures that when a ship is sold via a judicial sale by a competent court, the rights of the mortgagee are transferred to proceeds from the judicial sale. The FHCC was satisfied that the judicial sale was properly conducted in accordance with the laws of Jamaica and while it recognised the existence of the mortgage, it reserved an amount from the proceeds of the sale in favour of Jebmed.53 The FHCC went on to comment that it is crucial that there is no doubt in the title afforded to a new ship owner pursuant to a judicial sale as otherwise, this could be catastrophic to international maritime trade.54 On the basis of the above the FHCC held that the arrest was illegal and that the Sum Deposited should be released in favour of Bluefin. In addition, the FHCC ordered the payment of €33,692 in damages. This decision was confirmed by the CoA on the 12 January 2023. While the sage revolving the Bright Star case ended with a victory for the new shipowner, the time as well as costs and damages incurred to get to the finish line are causes for concern. This has further strengthened the call for international intervention to resolve such issues once and for all. As expressed by Mr Justice Hewson in the Acrux,56 the courts must recognise ‘proper sales by competent Courts of Admiralty, or prize, abroad – it is part of the comity of nations as well as a contribution to the general well-being of international maritime trade’.57 2.2 The Lead Up to the Convention While rules on ship arrest have seen substantial harmonization, the same cannot be said for judicial sales of ships. Efforts to unify rules on recognizing and enforcing maritime liens and mortgages have attempted to include judicial sales but have not succeeded. The debate started in 2008, when Henry Li suggested that the Comité Maritime International (“CMI”) should undertake a study on the recognition of foreign judicial sale of ships and the difficulties being faced by creditors and/or new shipowners when seeking to enforce a judicial sale in another jurisdiction. A critical turning point occurred in 2014 when the CMI adopted a first working draft of the Draft International Convention on Foreign Judicial Sales of Ships and their Recognition (“Beijing Draft”).58 The CMI’s next step was to present the Beijing Draft to an international body in order to translate it into an international treaty. This was no small task, as the IMO Legal Committee initially rejected a proposal by the CMI, China, and South Korea to include the Beijing Draft on its agenda for developing an international convention on the foreign judicial sale of ships and their recognition.59 The CMI sought other potential avenues for the adoption of the Beijing Draft and in July 2017, it approached the United Nations Commission on International Trade Law (“UNCITRAL”) to have this work incorporated on its working agenda. The Commission of UNCITRAL (“Commission”) requested the CMI to organise a high-level technical colloquium in order to bring together major stakeholders affected by the project and discuss the relevance of adopting an international instrument which would introduce a substantial degree of stability and uniformity in this sector of maritime trade.60 The colloquium, which took place in Malta in February 2018, resulted in the following key findings: the “lack of legal certainty in relation to the clean title which a judicial sale is intended to confer on a buyer” has led to problems in the de-registration process in the country of the former flag; the lack of legal certainty created obstacles in respect of the clearance of all former encumbrances and liens, which in turn created a risk of costly and lengthy proceedings, thereby interrupting trade and shipping; and agreement across all sectors represented at the colloquium that the gap is to be filled from a legal perspective by providing an instrument on the recognition of judicial sales of ships.61 The findings of the colloquium were presented by the Government of Switzerland to the Commission where it was noted that that the lack of recognition of the judicial sale of ships had the potential to affect many areas of international trade and commerce, not simply the shipping industry. Following deliberations by the Commission it was agreed that the topic of judicial sale of ships should be added to the work programme of the Commission.62 Following numerous sessions, the Commission considered the final draft of the Convention and approved the final text on the 30 June, 2022. The general assembly of the United Nations subsequently adopted the Convention on 7 December, 2022 by its resolution 77/100. 2.3 Walking through the salient provisions of the Convention The Convention revolves around the concept that a judicial sale conducted in one State Party which has the effect of conferring clean title onto the purchaser, has the same effect in every other State Party. It further prescribes additional rules which establish how a judicial sale is given effect after completion. While the Convention is concerned with the international effects of a judicial sale, how such a judicial sale is conducted and the effects of judgements in respect of such sales remain within the remit of the national law of State Parties. This is clearly outlined in Article 1 of the Convention63 and throughout. Definitions: Article 2 of the Convention defines certain key terms which, interestingly enough, are not presented in alphabetical order but in the order of prominence of the defined term vis-à-vis the operation of the Convention. For the purposes of this submission, the key terms will be considered. The term “judicial sale of a ship” is used throughout the Convention as it defines the scope of the application of the Convention and the focus of the substantive provisions. The Convention separately defines the terms “judicial sale” and “ship”. The term “judicial sale” is defined as any sale of a ship: which is ordered, approved or confirmed by a court or other public authority either by way of public auction or by private treaty carried out under the supervision and with the approval of a court; and for which the proceeds of sale are made available to the creditors.64 Of note are two principal features: despite differences in procedure among legal systems, a judicial sale is conducted with the involvement of a court; and a judicial sale is essentially a device that supports the enforcement of private right. A ship is then defined as ’any ship or other vessel registered in a register that is open to public inspection that may be the subject of an arrest or other similar measure capable of leading to a judicial sale under the law of the State of judicial sale.’65 While the term ”judicial sale” delimits the scope of the Convention to the rights and procedures involved in the forced disposal of an asset, the term ”ship” further delimits the scope of the Convention by reference to the type of asset involved. The legal definition of a “ship” varies across jurisdictions and is influenced by the context in which the term is applied. International efforts to establish a clear definition have fallen short, and the Convention does not provide such a definition. Instead, the term “ship” is intended to be broad, allowing for a wide range of vessels to fall under the Convention’s jurisdiction without any restrictions. The Convention goes on to define ”clean title” which is central to the whole purpose of the Convention. Simply put, clean title means a title which is free and clear of any mortgage or hypothèque66and of any charge.67 The term “title” pertains to the ownership rights in the ship that belong to the purchaser and is considered “clean” when all other property rights previously held by another person before the judicial sale—such as encumbrances or rights “in re aliena“— are eliminated. Additionally, all existing mortgages, liens, or charges would no longer apply to the ship. Operative Articles: Having considered the definitions of some of the key terms used in the Convention, attention will now shift to the Convention’s principal operative articles. International effects of a judicial sale While this article comes later on in the Convention, it is useful to consider and understand the implications of this article first as the remaining operative articles gravitate around it. Article 6 reads as follows: ‘A judicial sale for which a certificate of judicial sale referred to in article 5 has been issued shall have the effect in every other State Party of conferring clean title to the ship on the purchaser.’68 This article contains the basic rule of the Convention in that a judicial sale conducted in one State Party which has the effect of conferring clean title on the purchaser has the same effect in every other State Party. Therefore by way of illustration, where under the national law of a State Party, a ship sold by way of judicial sale confers clean title, and the judicial sale is conducted in accordance with the upcoming provisions of the Convention, Article 6 of the Convention shall operate to ensure that the clean title conferred by the judicial sale has the same effect in any other State Party. Article 6 is triggered by the issuance of the certificate for the judicial sale under Article 5. It requires no special procedure to give effect to the foreign judicial sale, such as confirmation by a competent court in the State in which the effects are sought to be produced. The judicial sale produces its effects automatically, i.e. by operation of law.69 Scope of application of the Convention As mentioned earlier on in this contribution, the Convention is concerned with the effects of a judicial sale. Article 3 goes on to delimit the scope of the Convention, which states that This Convention applies only to a judicial sale of a ship if: The Judicial Sale is conducted in a State Party; and The ship is physically within the territory of the State of judicial sale at the time of that sale.70 The scope of the Convention is closed in two senses; it is closed geographically since the Convention applies only among States which have signed the Convention. Unfortunately, this general principle under international law can limit the protection afforded by the Convention in cases where for example, a ship is sold by way of judicial sale in a State Party however the ship is registered in a jurisdiction that is not a party to the Convention. The latter would not be bound to recognise the effects of such a judicial sale and refuse to act upon the presentation of a valid certificate of judicial sale issued under the Convention. Secondly, the Convention requires the ship’s physical presence to be within the State of the judicial sale. Whilst in practice, a ship is typically arrested before sale proceedings are initiated, the Convention requires that the ship is within the territory of the State of judicial sale, ‘at the time of the sale’71 and not during the process itself. This requirement underpins the importance of having a connection between the court under whose jurisdiction the ship is sold and the ship. The Convention does not define the time of judicial sale since this can vary from one State Party to another. What the Convention seeks to protect is the ship’s presence at the final stage of the judicial sale process when the ship is successfully bought and legal title vests with the buyer. Notice of judicial sale As hinted to above, the Convention is not interested in harmonising how a judicial sale is conducted, and this is clearly laid out in Article 4(1) which provides that the judicial sale shall be conducted in accordance with the law of the State of judicial sale, which shall also provide procedures for challenging the judicial sale prior to its completion and determine the time of the sale for the purposes of this Convention. Therefore, as an example, a Maltese court dealing with a judicial sale, either via auction or via private sale, would still follow the procedure provided under the COCP.72 Notwithstanding the above, the Convention requires that notice of judicial sale is given prior to it taking place. Failure to give notice would vitiate any certificate of judicial sale issued under the Convention.73 In this very limited instance, the Convention is imposing a procedural requirement on State Parties which strikes a balance between due process towards creditors and the expediency required in a judicial sale in order to secure its international effect. Article 4(3) of the Convention goes on to prescribe certain classes of ”persons” to be notified of the judicial sale including: The ship registry where the ship to be sold is registered (even if the flag State is not a Party); Holders of any registered mortgage or hypothèque; Holders of any maritime lien provided they have notified the court conducting the judicial sale; The current shipowner; In case of a bareboat charter: The bareboat charterer; and The ship registry where the bareboat charter is registered. The above list is not exhaustive, and the law of the State Party may very well prescribe additional classes of ”persons” to be notified. While the Convention imposes the basic need for notification, the manner and form of notification is a matter of national law to determine.74 Therefore, the law of the State of the judicial sale would determine any applicable notice periods, the method of notification and the form of the notice. A copy of the notification is to be published on a local newspaper and transmitted to a repository being either the IMO Secretary General or to any other institution named by UNCITRAL.75 Upon receipt of the notice, the repository must make it available to the general public.76 The certificate of judicial sale As inferred from Article 6 of the Convention, the certificate of judicial sale plays a central role in the overall operation of the Convention’s regime. Article 5 of the Convention provides that Upon completion of a judicial sale that conferred clean title to the ship under the law of the State of judicial sale and was conducted in accordance with the requirements of that law and the requirements of this Convention77, the court or other public authority that conducted the judicial sale or other competent authority of the State of judicial sale shall, in accordance with its regulations and procedures, issue a certificate of judicial sale to the purchaser.78 As clearly indicated, a certificate of judicial sale is to be issued by the court conducting the judicial sale where: (1) the judicial sale conferred clean title under the national law of the State Party, and (2) the judicial sale was conducted in accordance with the provisions of the Convention. While the certificate of judicial sale does not serve as evidence of clean title, it serves to trigger the operation of Article 6, and further triggers additional safeguards catered for under Article 7, which deals with registration and Article 8, which deals with the prohibition of arrest. The Convention provides for a template certificate to be issued by the court or public authority conducting the judicial sale containing certain minimum information.79 This is not uncommon as other international conventions encourage the use of standard certificates to promote standardization and greater acceptance when presented to other ship registries. As a crucial component of the Convention, the certificate of judicial sale and any translation thereof are exempt from legalization or other similar formality80 such as an apostille under the Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents.81 Effectively, this ensures that registries or other competent authorities in another State Party do not require a foreign certificate of judicial sale to be legalized or apostilled as a condition for taking action under the Convention. Actions to be taken by the Registry The Convention seeks to identify actions to be taken by the competent authorities in the flag State to realise the effects of a judicial sale. Upon presentation of the certificate of judicial sale, the ship registry of a State Party is to: Delete from the register any mortgage or hypothèque and any registered charge attached to the ship that had been registered before completion of the judicial sale; Delete the ship from the register and issue a certificate of deletion for the purpose of new registration; Register the ship in the name of the new purchaser (on the understanding that the ship and the person in whose name the ship is to be registered meet the requirements of the law of the flag State); and Update the register with any other relevant particulars in the certificate of judicial sale.82 The Convention recognises that at the time of the judicial sale, the ship may be registered as a bareboat charter. While the judicial sale does not prohibit the bareboat charterer from exercising his right against the previous owner for a breach of contract, the purchaser from the judicial sale is not bound to honour the bareboat charter agreement.83 Article 7(2) provides that at the request of the purchaser and upon presentation of the certificate of judicial sale, the registry of a State Party in which the ship was registered as a bareboat charter is to delete the ship from the bareboat charter register and issue a certificate of deletion.84 Article 7 is subject to the public policy exception under Article 10 of the Convention which provides that the judicial sale of a ship does not have the effect provided in Article 6 in another State Party other than the State where the judicial sale took place if a court in such other State Party determines that the effect would be manifestly contrary to the public policy of such other State Party.85 While matters of public policy can differ between State Parties, Article 10 requires that the effect of the judicial sale in the State concerned is to be ”manifestly contrary” to public policy.86 This sets a high threshold, which is designed to avoid an abusive or overly expansive application of the public policy exception and requires a compelling reason as to why giving effect to the foreign judicial sale is contrary to an identified matter of public policy.87 No arrest of the ship following a judicial sale It is a well-founded principle under the international conventions harmonising the rules on arrest of ships that a ship may be arrested in respect of a maritime claim only if the person who owns the ship at the time of arrest is the person who owned the ship at the time the claim arose, unless the maritime claim is secured by a maritime lien or is based on a mortgage, hypothèque or charge of similar nature. Ergo, where a judicial sale affords the purchaser a clean title, it follows that the ship should not be subject to arrest for any maritime claim or maritime lien arising prior to the judicial sale.88 As such Article 8(1) of the Convention provides that if an application is made before a court in a State Party to arrest a ship for a claim arising prior to a judicial sale of the ship, the court is to dismiss the application upon presentation of the certificate of judicial sale. In addition, if a ship is arrested or any similar injunction is taken against the ship, the court is to order the release of the ship upon presentation of the certificate of judicial sale. Similar to Article 7, the safeguard under Article 8 is also subject to the public policy exception under Article 10.89 Entry into Force Critically, the Convention will only enter into force 180 days following the deposit of the third instrument of ratification, acceptance, approval or accession. As at time of writing, the Convention has only been ratified by El Salvador, and therefore not yet in force. Conclusion Malta, striving to enhance its standing as a top maritime jurisdiction, signed the Convention on 19 June, 2024. This positions Malta among the States aligning with the Convention’s goal of providing uniform rules and international recognition of judicial sales. Though the Convention only applies between State Parties, the concept of a “closed” regime could weaken its impact if not widely adopted, it aims to ensure judicial sales of ships are recognized and enforced across jurisdictions. One must not allow this thought to detract from its ultimate goal; to establish uniform rules and to give international effects to judicial sales of ships sold free and unencumbered as this benefits shipowners, financiers, creditors and purchasers by reducing legal uncertainty. The judicial sale of ships plays a critical role in international maritime law by facilitating dispute resolution, debt settlement and efficient redistribution of maritime assets. Malta’s legal framework already offers strong protections for creditors and buyers during such sales, however, the international nature of shipping requires broader recognition, which the Convention seeks to address by harmonizing laws across countries, offering greater legal certainty. For Malta, the eventual ratification of the Convention would reinforce its legal framework, ensuring that judicial sales of ships conducted in Malta are recognized internationally, boosting its appeal as a global maritime hub. Additionally, Malta’s adoption would support its commitment to harmonizing international maritime laws and protecting its national interests in the global maritime community. Ultimately, while Malta’s current laws are robust, the Convention enhances its international reach and strengthens legal certainty for cross-border transactions. Ultimately, the success of the Convention will rely on its widespread adoption by other maritime nations. Disclaimer: Ganado Advocates is responsible for contributing to this article but was not in any way involved as legal advisor for the parties discussed herein. This article was first published in ‘ID-Dritt’ in 2025. 1 International Maritime Organization, ‘Marine Environment’ (International Maritime Organization)      <https://www.imo.org/en/OurWork/Environment/Pages/Default.aspx> accessed 11 October 2024. 2 David Josph Attard and others, The IMLI Manual On International Maritime Law Volume II Shipping Law (1st edn, Oxford University Press 2016) 152 3 Merchant Shipping Act, Chapter 234 of the Laws of Malta, Article 37A. 4 United Nations Convention on the International Effects of Judicial Sales of Ships (Beijing, 7 December 2022) UNTS. 5 Code of Organisation and Civil Procedure, Chapter 12 of the Laws of Malta. 6 ibid, Article 253(1). 7 ibid, Article 273(d). 8 ibid, Article 273(h). 9 Merchant Shipping Act, Chapter 234 of the Laws of Malta. 10 COCP, n(5), Article 855(1). 11 ibid, Article 859. 12 S Derrington and J Turner, The Law and Practice of Admiralty Matters (Oxford University Press, 2007) 126. 13 COCP, n(5), Article 843(1). 14 ibid, Article 256(1). 15 MSA, n(9), Article 42(4). 16 COCP, n(5), Article 838B(2)(a). 17 ibid, Article 388D(1). 18 ibid, Article 313(1). 19 ibid, Article 359. 20 Singapore signed the Convention on 5 September 2023. 21 As at the writing of this submission, the Convention has been signed by 28 States and the European Union. 22 High Court (Admiralty Jurisdiction) Act 1961, (Singapore). 23 Supreme Court of Judicature Act 1969, (Singapore). 24 Merchant Shipping Act 1995, (Singapore). 25 AMLA, n(22), (Cap 4, 2020 Rev Ed), s 7. 26ibid, s 4(c) and (d). 27SJCA, n(23), (Cap 3, 2020 Rev Ed) s 13. 28Merchant Shipping Act, n(24) (Cap 2, 2020 Rev Ed) s 23. 29Rules of Court (Cap 322) 2021. 30 This 90-day period starts to run from the day on which the proceeds of the sale are deposited into court, following the expiration of which, the court shall proceed determine the priority of creditor claims. This is not the default position under Singaporean law but is followed at the express request of the court. 31 Rules of Court, n(28), O 33 r 23(3). 32 Liberian Registry, ‘The Liberian Registry Today’ (Liberian Registry) accessed 19 October 2024. 33 International Convention on Arrest of Ships (adopted 12 March 1999, entered into force 14 September 2011) 2797 UNTS 3. 34 Law 8 of 30 March 1982, as amended by Law 11 of 23 May 1986, Law 23 of 1 June 2001 and Law 12 of 23 January 2009 (Panama) Maritime Code. 35 ibid. 36 ibid, Article 199. 37 ibid, Article 200. 38 ibid. 39 ibid, Article 522. 40 ibid, Article 203. 41 ibid. 42 ibid, Article 204. 43 Rikors numru 653/2018 JRM fl-atti tal-mandat esekuttiv ta’ arrest ta’ bċejjeċ tal-baħar numru 998/2018 fl-ismijiet: ‘Marlon Borg bħala mandatarju f’isem is-soċjetà estera Jebmed S.r.l. v. M.V. Bright Star, ġà M.V. Trading Fabrizia bin-numru tal-I.M.O. 9481960’, 44 Rikors guramentat numru 846/18/2 MCH fl-ismijiet: Dr. Ann Fenech kif debitament awtorizzata bħala mandatarja għannom u in rappreżentanza tas-soċjetà estera Bluefin Marine Limited, reġistrata l-Liberia, u tal-bastiment ‘MV Bright Star’ ġja ‘Trading Fabrizia’ bin-numru tal-IMO 9481960 v Is-soċejtà estera Jebmed SRL reġistrata ġewwa l-Italja, 45 Bright Star I (n43). 46 Ibid. 47 Article 281(1) COCP “Without prejudice to any other right under this or any other law, the person against whom an executive act has been issued or any other person who has an interest may make an application, containing all desired submissions together with all documents sustaining such application, to the court issuing the executive act praying that the executive act be revoked, either totally or partially, for any reason valid at law.” 48 Bright Star I (n43). 49 Ibid. 50 Ibid. 51 Bright Star II (n44). 52 Ibid. 53 Ibid. 54 Ibid. 55 Ibid. 56 The “Acrux” (1961) 1 Lloyd’s Rep, 408. 57 ibid. 58 United Nations Convention on the International Effects of Judicial Sales, Explanatory Note by the UNCITRAL Secretariat. 59 ibid. 60 ibid. 61 ibid. 62 ibid. 63 The UN Convention, n(4), Article 1. ‘This Convention governs the international effects of a judicial sale of a ship that confers clean title on the purchaser.’ 64 ibid, Article 2(a). 65 ibid, Article 2(b). 66 The UN Convention (n4), Article 2(d), ‘ ”Mortgage or hypothèque” means any mortgage or hypothèque that is effected on a ship and registered in the State in whose register of ships or equivalent register the ship is registered’. 67 ibid, Article 2(e), ‘ “Charge” means any right whatsoever and howsoever arising which may be asserted against a ship, whether by means of arrest, attachment or otherwise, and includes a maritime lien, lien, encumbrance, right of use or right of retention but does not include a mortgage or hypothèque ’. 68 ibid, Article 6. 69 UNCITRAL Explanatory Note (n58). 70 The UN Convention, (n4), Article 3 (emphasis added). 71 ibid. 72 Refer to Section 1.2. 73 The UN Convention (n4), Article 4(2). 74 ibid, Article 4(4). 75 ibid, Article 4(5). 76 ibid, Article 11. 77 ibid, Article 5(1) (emphasis added). 78 ibid. 79 Ibid, Article 5(2): The certificate of judicial sale shall be substantially in the form of the model contained in annex II and contain: A statement that the ship was sold in accordance with the requirements of the law of the State of judicial sale and the requirements of this Convention; b. A statement that the judicial sale has conferred clean title to the ship on the purchaser; c. The name of the State of judicial sale; d. The name, address and the contact details of the authority issuing the certificate; e. The name of the court or other public authority that conducted the judicial sale and the date of the sale; f. The name of the ship and registry of ships or equivalent registry with which the ship is registered; g. The IMO number of the ship or, if not available, other information capable of identifying the ship; h. The name and address of residence or principal place of business of the owner of the ship immediately prior to the judicial sale; I. The name and address of residence or principal place of business of the purchaser; j. The place and date of issuance of the certificate; and k. The signature or stamp of the authority issuing the certificate or other confirmation of authenticity of the certificate. 80 ibid, Article 5(4) 81 Hague Convention Abolishing the Requirement of Legalisation for Foreign Public Documents (adopted 5 October 1961, entered into force 24 January 1965) 527 UNTS 189. 82 The UN Convention (n4), Article 5(1). 83 UNCITRAL Explanatory Note (n58) 84 The UN Convention (n4) Article 7(2) 85 ibid (n4), Article 10. 86 UNCITRAL Explanatory Note (n58). 87 ibid. 88 ibid. 89 The UN Convention (n4), Article 8(4)

The Malta Financial Services Authority (“MFSA”) has revised Chapter 2 of the Financial Institutions Rulebook (“FIR/02”) and Chapter 3 of the Financial Institutions Rulebook (“FIR/03”) to reflect recent regulatory developments at European level. These updates, which were published on 28 May 2025 pursuant to an MFSA circular, are intended to: implement changes introduced in Directive (EU) 2015/2366 (the “PSD2”) by way of Regulation (EU) 2024/886 (the “Instant Payments Regulation”) in relation to participation in designated payment systems; and further align the financial institutions regulatory framework with Regulation (EU) 2022/2554 (the “DORA Regulation”) and the updated Guidelines on ICT and Security Risk Management (EBA/GL/2025/02) issued by the European Banking Authority (the “EBA”).  FIR/03 amendments on financial institutions’ participation in payment systems In transposing Article 35a of the PSD2, which was recently implemented through the Instant Payments Regulation published in the Official Journal of the EU in March 2024, the amendments to FIR/03 introduce a new section under Rule R3-3.6 which sets out the regulatory requirements and expectations for licence holders requesting participation in a designated payment system. The newly inserted provisions require that, in requesting participation and when participating in a payment system, licence holders must have in place: a description of the measures taken for the safeguarding of clients’ funds; a description of the governance arrangements and internal control mechanisms for the payment or electronic money services provided, including ICT-related arrangements in line with Articles 6 and 7 of the DORA Regulation, amongst others; and a winding-up plan tailored to the size and business model of the institution. Where the financial institution safeguards clients’ funds by depositing such funds in a credit institution or by investing in secure, liquid, low-risk assets, the description in point (i) above must contain, among other things, a description of the administration and reconciliation process to ensure that client funds are insulated in the interest of the clients against the claims of other creditors of the institution and a description of the investment policy to ensure the assets are liquid, secure and low-risk, as may be applicable. In cases where safeguarding is ensured through insurance or a comparable guarantee, the description of measures shall contain information on the duration and the terms of renewal of the coverage and a confirmation of the provider’s independence from the group. The governance arrangements and internal control requirements referred to in point (ii) above extend to the detailed mapping of risks, the implementation of procedures for periodical and permanent controls, accounting frameworks, the identification of responsible persons for control functions, and appropriate oversight of outsourcing arrangements and group-level governance where applicable, amongst other elements. Additionally, the winding-up plan in point (iii) above shall outline the mitigation measures to ensure the orderly execution of outstanding transactions and the termination of client contracts in the event of failure. All licence holders seeking to participate in a payment system are required to perform a self-assessment confirming compliance with the above-mentioned requirements. This must be documented in a report addressed to the relevant payment system and accompanied by a signed declaration from the financial institution’s Board of Directors. A copy of the declaration must also be submitted to the MFSA. Furthermore, all licence holders already participating in a payment system as of 9 April 2025 are similarly required to undertake such a self-assessment and comply with this new procedure and provide an update on the progress made to the MFSA by 9 June 2025. The MFSA may also request that the self-assessment be counter-signed by an independent third-party auditor. Licence holders must also notify the MFSA and the relevant payment system of any key changes to the information previously submitted.  FIR/02 and FIR/03 amendments on ICT and security risk management In parallel, the MFSA has also updated FIR/02 to remove the reference to the EBA Guidelines on ICT and Security Risk Management given that the FIR/02 is applicable to financial institutions licensed to provide the services listed in the First Schedule to the Financial Institutions Act (Chapter 376 of the laws of Malta) other than payment services and the issuance of electronic money (in this respect, the following MFSA Circular issued in October 2024 refers). In this context, the MFSA has removed the reference to the EBA Guidelines from FIR/02 and retained instead the reference to its own Guidance on Technology Arrangements, ICT and Security Risk Management, and Outsourcing Arrangements. Further to the above, a new rule has been introduced within FIR/03 requiring payment institutions and electronic money institutions to comply with the EBA Guidelines on ICT and Security Risk Management referred to above which were recently revised to account for the application of the DORA Regulation (EBA/GL/2025/02). The latest revisions to the EBA Guidelines are aimed at ensuring that firms maintain a robust framework for managing ICT and security risks in a manner that complements and supports the overarching objectives of the DORA Regulation, while providing regulatory clarity at national level on the applicable standards.

We are pleased to announce that we have joined the Sino International Professional Advisory Council (SIPAC) as the exclusive member firm for Malta. SIPAC is a global community of legal and compliance professionals across 40+ jurisdictions. The council aims to provide high-quality professional support for outbound legal and compliance matters for Chinese companies. Annalise Papa, a Partner within our Corporate practice, is representing the firm within this network. We look forward to strengthening our ties with all our fellow SIPAC member firms and to better serve the SINO-business and legal communities with their needs and interests in Malta.

It is with pleasure that Ganado Advocates announces Catherine Formosa’s promotion to Of Counsel, effective 6th March 2025. Catherine has been a key member of the firm’s banking and payments practice, where her expertise has greatly contributed to the firm’s ability to guide clients through complex legal matters in the regulatory, corporate governance, financing and capital markets spheres. Catherine brings to the role a wealth of experience, having spent over 16 years in the banking sector, including a notable tenure as Group Company Secretary of one of Malta’s significant banks. Her extensive background has allowed her to build a comprehensive understanding of both corporate and retail banking operations, making her an invaluable resource for clients in the financial services landscape. She is also a visiting lecturer and an examiner at the Faculty of Laws, University of Malta. Andre’ Zerafa, Managing Partner of Ganado Advocates, expressed his congratulations, noting, “Catherine’s promotion to Of Counsel is a testament to her exceptional legal acumen and the significant contributions she has made to our banking and payments team over the years. Her deep industry knowledge continues to play a fundamental role in advancing our practice. We look forward to her continued success in this new role.”

Chris Grech has authored a case note in the European Competition and Regulatory Law Review (CoRe). The publication provides a detailed overview of the Court of Justice of the European Union’s judgement in Illumina/Grail, which dealt with the issue of killer acquisitions and the possible way forward in this regard, as well as the principles of legal certainty and predictability in merger control. The case note can be accessed here. Author: Chris Grech

Public procurement laws have been amended to increase the financial thresholds applicable to different procurement processes through Legal Notice 360 to Legal Notice 362 of 2024. These amendments primarily ensure that procurement opportunities of a certain monetary value fall under the comprehensive national regime that fully incorporates the directives. Subsidiarily, these amendments also affect when the Department of Contracts (“DOC”) becomes responsible for the publication of a tender process. Generally speaking, unless contracting authorities are listed in a specific schedule which entitles them to administer their own public procurement and save for tender processes with smaller estimated procurement values as explained in this note, contracting authorities must administer their procurement through the Sectoral Procurement Directorate and/or the DOC. By virtue of the new legal notices, contracting authorities may now issue public supply tenders independently without involving the DOC where the estimated procurement value does not exceed €143,000. For public works tenders and concessions, this figure is now €5,538,000 instead of the previously applicable €5,382,000. These amounts are always excluding VAT. These numbers differ for tenders in the water, energy, transport and postal services sectors. For public supply and service contracts, the threshold has been increased to €443,000 from €431,000. For works contracts, the threshold is now €5,538,000. Author: Clement Mifsud-Bonnici, Calvin Calleja, Krista Refalo

Ganado Advocates is pleased to announce the promotion of George Bugeja to Partner, effective 1st January 2025. Having been with the firm for several years, George has significantly contributed to the growth of the corporate finance team, advising clients on complex corporate law matters, including mergers and acquisitions, restructuring and insolvency, and energy law. He was awarded a Doctor of Philosophy in Law (Ph.D.) from King’s College London in 2018 for his thesis on “The Basel Accords as a Transnational Regulatory Law: A Focus on Regulatory Consistency and Domestic Embeddedness.” George’s appointment reflects his exceptional legal expertise, dedication to client service, and strong leadership within the firm. He has also developed a special focus on energy law, with extensive experience in both regulatory and transactional matters related to conventional and renewable energy projects. In congratulating George on his new position, Andre’ Zerafa, Managing Partner of Ganado Advocates, remarked, “George’s promotion is a true testament to his hard work and commitment to the firm. His deep knowledge and strategic vision have been instrumental in the growth of our corporate finance and energy law practices. We are excited to see him take on this new role and look forward to his continued contributions to the firm’s ongoing success.”

Ganado Advocates has contributed the Malta chapter in the 2025 edition of the Chambers Litigation Global Practice Guide.\r\n\r\nThe publication focuses on key aspects of the Maltese legal system, particularly on dispute resolution, court processes, enforcement of judgments, and alternative dispute resolution mechanisms. It provides practical guidance for navigating litigation in Malta, tailored for legal professionals and businesses dealing with complex commercial and civil matters. Access the Malta chapter of this publication here.

Luisa Cassar Pullicino has contributed to the Malta chapter in the publication entitled ‘European Account Preservation Order: A Multi-Jurisdictional Guide with Commentary’. This book provides a comprehensive, cross-jurisdictional analysis of the European Account Preservation Order (EAPO), established to facilitate cross-border debt recovery in the EU in civil and commercial matters by offering an alternative to national provisional and protective measures. The book explores how the EAPO has been implemented in different jurisdictions and how it is applied by courts across the 26 EU Member States (excluding Denmark). Note: The book is available for purchase here. Author: Luisa Cassar Pullicino