Issue link: https://maltatoday.uberflip.com/i/1538544
8 maltatoday | SUNDAY • 17 AUGUST 2025 LAW IN a recent judgment, Abigail Bugeja noe (on behalf of the vessel Jay 2 and Gold- finch Shipping 2 Ltd) vs Egyptian Tank- er Company (ETC) delivered on 31 July 2025, by Judge Henri Mizzi, the Civil Court clarified the limits of liability for precautionary vessel arrests, holding that damages may only be awarded under the strict confines of Article 836(8) of the Code of Organization and Civil Proce- dure. The vessel originally named Diamond T, later renamed Jay 2, was owned by Dreter 2 Ltd and then sold to Goldfinch Shipping 2 Ltd. ETC had a time char- ter agreement with Degroma Trading, which had itself chartered the vessel via a bareboat agreement from Dreter. A time charter is a shipping agreement where a shipowner leases a vessel to a charterer for a specific period, allowing the charterer to use the vessel for vari- ous voyages during that time. A bareboat charter is a type of ship or boat charter where the owner provides the vessel to the charterer without crew, fuel, insurance or provisions provided by the owner. Both the bareboat and time charter agreements were terminated by early 2024. On 29 February 2024, ETC request- ed and obtained an arrest of the vessel to secure its claims against Degroma. However, by that time, the vessel had already been sold to Goldfinch. Bugeja, acting as a legal representative of Goldfinch Shipping 2 Ltd, filed an action for damages against the Egyptian Tanker Company (ETC) following the arrest of the vessel. The claim centred on alleged negligence or imprudence in the way ETC sought and maintained that arrest. The plaintiff argued that since De- groma (the debtor in ETC's claim) no longer owned the vessel, ETC had no legal basis to arrest it as security for its claims against Degroma. Therefore, ETC acted imprudently and negligent- ly by requesting an arrest on a ship no longer owned by the party they had a dispute with. Bugeja also submitted an alternative claim. If ETC was unaware of the sale at the time it requested the arrest, it became legally and ethically obliged to withdraw the arrest once it was notified of the change in ownership. However, ETC failed to take timely steps to revoke the arrest even after be- ing informed. The lawyer also made reference to ar- ticles from the Civil Code that govern civil liability for damages in Malta, such as Article 1031, which states that a per- son who causes damage through fault is liable and article 1032, which further states that fault includes imprudence, negligence or lack of foresight expected of a bonus paterfamilias. Furthermore, the Civil Code states that whoever causes damage that is not justified by law is bound to make good the damage. Bugeja used these provisions to argue that ETC's lack of diligence, either in issuing or maintaining the arrest, had caused real harm to the new owners. The Egyptian Tanker Company ob- jected to the claims by arguing that damages arising from the wrongful ar- rest of a vessel can only be claimed in specific, narrowly defined cases under Article 836(8) of the Code of Organiza- tion and Civil Procedure. This outlines four situations where the court may impose penalties or award damages for an abusive use of precau- tionary warrants. These mainly are: The warrant was requested without satisfying the legal criteria There was a failure to provide required information There was no actual urgency The request was made maliciously, was frivolous or vexatious. ETC argued that precautionary war- rants like arresting a ship are legal tools available to creditors to secure their claims. Their use, does not automati- cally give rise to liability. They also argued that the mere fact that a warrant was issued and later re- voked, or that a party ultimately loses the main case, is not sufficient for dam- ages to be awarded. ETC stated that unless the plaintiff could prove that ETC acted with malice, frivolousness or in a vexatious manner, the claim could not proceed regardless of whether ETC had been imprudent or negligent. ETC referred to the case law- yer Ann Fenech nomine vs My Whis- pering Angel that supports this strict interpretation. ETC also reinforced their argument with a latin maxim "Qui suo jure utitur neminem laedit" which means "he who exercises his own legal right harms no one", implying that a person using a le- gal remedy available to them should not be penalised just because things did not turn out in their favour, unless they act- ed abusively or in bad faith. The court accepted ETC's first prelim- inary objection, namely that claims for damages resulting from the issuance or maintenance of a precautionary warrant must fall strictly within the confines of Article 836(8) of the Code of Organiza- tion and Civil Procedure. The court also rejected the argument by Bugeja that she could bypass these limitations and rely instead on the gen- eral civil tort principles found in Arti- cles 1031–1033 of the Civil Code, which cover imprudence, negligence and lack of diligence. The court dismissed the first three parts of Bugeja's claim which all sought damages. Bugeja's fourth request was to order the revocation of the arrest. How- ever, by the time the court decided the case, the arrest had already been lifted by a counter-warrant on 30 May 2025, following a court-authorised private sale of the vessel. In line with standard legal practices in Malta, the Court ordered Bugeja's cli- ents to pay the legal costs of the pro- ceedings. MALCOLM MIFSUD Mifsud & Mifsud Advocates One who makes use of legitimate action cannot cause damages The Civil Court clarified the limits of liability for precautionary vessel arrests, holding that damages may only be awarded under the strict confines of Article 836(8) of the Code of Organisation and Civil Procedure. The Diamond T, later renamed Jay 2