Issue link: https://maltatoday.uberflip.com/i/1187474
| SUNDAY • 24 NOVEMBER 2019 maltatoday 17 FOLLOWING an arbitration award, the Court of Appeal cannot enter into the facts of the case, if the arbitration is a voluntary one. This was held on 18 November 2019 by the Court of Appeal, presided by Mr Justice An- thony Ellul in Michele Peresso Lim- ited -v- Dr Tigne Limited, John Sam- mut and Mark Sammut. The case concerns a shopping com- plex in Sliema, which the plaintiff company had rented in 2008 and arbi- tration proceedings had commenced due to the fact that part of the rented property was still in the hands of third parties and the property had signifi- cant defects. The plaintiff company had asked the arbitration panel to de- clare that the defendants had failed to fulfil their obligations and to order a refund of rent, and to order that the third parties vacate the premises. The arbitration panel ordered that the defendants pay the plaintiff com- pany over €200,000 in rent paid and €11,650 in pre-liquidated damages. The panel had argued the rented property was not in the hands of the plaintiff company and that the air conditioners, lifts and escalators did not work and could not have been used. It was argued that the parties had agreed that their agreement stated that there was no appeal on the arbi- tration. However, the Court did not find this in their agreement, but that the issues would have been referred "for final and binding arbitration in terms of Abitration Law in accord- ance with the rules and practices of the Malta Arbitration Centre". But this does not mean that there is no right to an appeal. The plaintiff company argued that the appeal should have been limited to points of law as dictated in the Ar- bitration Act (Chapter 387 of the Law of Malta). Mr Justice Ellul then dealt with the first ground of appeal, that is on how the arbitration panel dealt with how the damages were calculated. The Court of Appeal held that this ground was unclear, however, if the defend- ants were referring to Article 1545 of the Civil Code which regulates how the rent should be reduced, the arbi- tors had absolute discretion to estab- lish the percentage used to reduce the rent. Notwithstanding this, this ground of appeal is not a point of law. As to the second ground of appeal, the defendants argued that it was un- fair that there was a further reduction of rent, when there was an agreement on how much rent was to be refunded. The arbitors had decided this point because part of the rented property was still occupied by third parties. This ground of appeal would have al- lowed the Court of Appeal to analyse the evidence and therefore, render the appeal on a point of fact. This ground of appeal is a criticism on how the ar- bitration panel handled the evidence produced. This ground of appeal goes contrary to Article 70B of the Arbitra- tion Act, which allows only points of law to be dealt with by the Court of Appeal. The next ground of appeal, dealt with whether the defects in air condi- tioners, lift, escalators, and electrical system, were defects in terms of Ar- ticle 1545 (1) of the Civil Code. This article reads: "1545. (1) The lessor is bound to war- rant the thing let against the faults or defects which prevent or diminish the use thereof; and, where the existence of such faults or defects is proved, the lessee may demand at his option ei- ther the dissolution of the contract or an abatement of the rent. (2) The same rule shall apply even though such faults or defects shall have arisen after the stipulation of the contract. (3) The lessor, however, shall not be bound in respect of apparent faults or defects which the lessee could have discovered for himself at the time of the contract." The arbitration panel held that the defects had a substantial impact on the plaintiff company's operation. Again to see whether the Court of Appeal agreed with the arbitration award, it would have to see evidence produced and therefore, certainly did not con- stitute a point of law. To establish whether the defects had an impact of business operation, the Court would have to investigate whether these de- fects were known or otherwise at the time, when the lease agreement was signed. Under the Arbitration Act on- ly mandatory arbitrations have a right of appeal on points of fact. When the arbitration is voluntary, the appeal is limited to points of law only. The Court of Appeal, then moved to dismiss the appeal. Court of Appeal will not re-examine facts following a voluntary arbitration LAW Dr Malcolm Mifsud is a partner at Mifsud & Mifsud Advocates Dr Robert Musumeci is an advocate and a perit having an interest in development planning law PLANNING AT issue was a planning application seeking permission for the levelling of soil which had been carried out in a field without prior permit. In his drawings, the architect entrusted with the planning application also showed a ramp and a gate that were likewise constructed without prior authorisation. For its part, the Planning Directo- rate found no objection with the pro- posal. On the other hand, however, the Planning Commission observed that the proposal was deemed objection- able since it was in conflict with planning policy. It was observed that there was no ongoing on site agricul- tural activity on site, hence the works were not considered legitimate or necessary. In addition, the Commission made specific reference to policy 2.9 of the Rural Policy & Design Guidance (RP- DG) 2014, pointing out that the gate was higher than the adjoining bound- ary wall. Besides, it was said that the gate was not made of timber. This, according to the Commission, was incompat- ible with the Rural Objective 4 of the Strategic Plan for Environment & Development which aims for the pro- tection and enhancement of the rural landscape. In reply, applicant lodged an appeal before the Environment and Planning Review Tribunal, underlining that the Planning Directorate was in favour of the proposal. When the recommendation was referred for a decision, the Commis- sion, however, proceeded not to take a decision as per recommendation but to carry out a site inspection in order to 'have a clearer picture of the situation'. It was explained that two members of the Commission went on site and allegedly 'decided on a course of ac- tion' to be taken. In fact, a letter was subsequently sent to applicant providing what steps were to be followed. In the said letter, applicant's architect was 'advised' to submit a demotion plan showing the removal of the site illegalities which included a container unit. Architect was also requested to sub- mit fresh plans showing an increased number of trees with a view to screen an exposed third party wall. Nevertheless, appellant held that, in the next sitting, the Commission had second thoughts and decided to defer the case to another date. A final decision was subsequently delivered, however without applicant being given the opportunity to have his say. In reply, the Authority pointed out that in his appeal application, appel- lant failed to put forward any plan- ning or environmental reasons to counter the Commission's decision. In other words, appellant was lim- iting his arguments to 'the manner by which the Planning Commission reached its decision', hence the ap- peal was to considered null and void at law. But even so, the Tribunal was re- minded that the Commission had refused permission due to the Envi- ronment and Resources Authority having signalled concern since there was no ongoing agricultural activity. During the pendency of proceed- ings, the Tribunal carried out a site inspection, further to which it was satisfied that the boundary walls blended with the rural landscape. Moreover, the Tribunal was con- vinced that the works carried out by applicant, namely the soil levelling, was specifically carried out to facili- tate the agricultural activity. In addition, the Tribunal opined that the proposed landscaping was considered acceptable. On this basis, the permission was issued, subject to a payment of fine equivalent to Eur900. Soil levelling to further agricultural activity robert@robertmusumeci.com ASK ROBERT mmifsud@mifsudadvocates.com.mt ASK MALCOLM LAW & PLANNING