Insolvency Proceedings And Third Party Rights In Rem: A Maltese Perspective

In a recent judgment, the Maltese Court rejected a foreign liquidator's application to have a precautionary warrant of arrest lifted on the basis of the EC Regulation 1346/2000 on Insolvency Proceedings.

The facts of the case were as follows:

In 2006, a German ship-owning company entered into a shipbuilding contract with a Chinese yard for the construction of a vessel (later named the MV Beluga Sydney). The following year, the said company assigned all the rights and obligations to another German legal entity and consequently the latter was scheduled to accept delivery of the vessel as its new registered owner. The said delivery took place in 2010.

It transpired however that despite several agreements between the owners and the yard, a large sum due for the construction of the vessel allegedly remained unpaid. In June of 2011, the Chinese builders filed a request before the Maltese Civil Courts to obtain a precautionary warrant of arrest against the MV Beluga