Article 37 of the Merchant Shipping Act provides an important protective remedy for persons claiming rights in or over a ship. It empowers the Court, upon a sworn application by the claimant, to issue an order prohibiting any dealing with a ship or any share therein for a period of up to one year, renewable upon request. Such an order acts as a safeguard, ensuring that the ship remains available to satisfy the claimant’s rights while legal proceedings are pursued.
The Court application must include the amount of the claim, as failing to indicate this will render the application null. The Court enjoys wide discretion in granting, refusing or discharging the order and may impose conditions, including the provision of security for potential damages, interest and costs. However, if the defendant deposits the claim amount or provides satisfactory security to the Court such as a bank guarantee, the Court will not issue the order, or will revoke it if it has already been issued.
The process under Article 37 is designed to be fast and effective. Applications are heard within 20 days, and in urgent cases the Court may issue a provisional order straight away which will remain valid until the Court determines the matter. However, the claimant is also required to follow up with legal proceedings on the merits of the case, within 8 days of a definite order or within 30 days from a provisional order, otherwise the order will be lifted.
This Article strikes a balance between protecting claimants and safeguarding legitimate interests. It expressly preserves the rights of registered mortgagees and does not impede court-approved sales, deletions from the register, or bareboat charter registrations in foreign registries. By limiting the scope of its effect, Article 37 ensures that while claimants are afforded an effective interim remedy, the broader framework of secured credit and international ship operations remains unimpaired.
In simple terms, this remedy serves as a powerful tool to preserve Maritime assets in Malta, particularly disputes involving ownership, mortgages, maritime liens, and other claims in rem. It allows parties to prevent prejudicial dealings in a vessel pending a final determination of their rights, thereby reinforcing Malta’s standing as a maritime jurisdiction that combines creditor protection with commercial flexibility.
For more information you can contact one of our Team Members at Mifsud & Mifsud Advocates.
