Summary of the case
Beluga Shipping QS321GmbH & Co. KG (Beluga Shipping) filed an action in the Civil Court of Malta requesting that the Court revokes a precautionary warrant for the arrest of M.V. Beluga Sydney and/or that the executioner of the warrant is ordered to deposit €200,000 or another sum as determined by the Court, for the payment of damages.
The request for an issuance of a precautionary warrant of arrest had been filed by a ship-building company in view of securing payment for outstanding ship-building fees.
The Proceedings
Defending the action before the Court, the plaintiff argued that the precautionary warrant of arrest should be revoked as the defendant has no legal standing in the matter at hand at the time when the request for the issuance of the precautionary warrant was made since the defending company had not become the creditor at the material time.
The plaintiff argued that the claim fulfilled the grounds for revocation of an arrest warrant, as discussed above.
Court’s opinion
The Court clarified that in determining whether the precautionary warrant had been issued under the criteria established by the Civil Code, its competence was to investigate prima facie that the precautionary warrant was requested in an abusive manner and no to opine on the impending dispute between the two parties.
In its appreciation of the facts at issue, the Court concluded that:
The existence of other suitable security
The Court held that the burden of proof rested on the debtor in proving that there exists other suitable security. It held that the debtor must prove that the security is in the debtor’s patrimony and not merely that it is owed money by third parties.
Prima facie justification of claim
The Court held that for a claim to be excessive, the disagreement between the parties must be substantial. A marginal difference between the claim and the de facto amount due does not nullify a precautionary warrant of arrest. The Court noted that in this case, the difference was marginal.
Sufficiency of security provided
The Court noted that there was no indication that Beluga Shipping had provided security.
Unreasonableness and lack of justification to maintain the arrest in force
The Court held that Maltese law gives a margin of appreciation to the fact that circumstances may change after the precautionary warrant is issued and that these changes are not a ground for revocation of the warrant.
Payment of guarantee
The Court held that the party suing out the warrant may be obliged to give sufficient security for the payment of penalties, damages and interest only if it is proven to the Court that there are valid reasons why the security is being requested.
The Court pointed out that another company, apart from the defendant, had requested a precautionary warrant of arrest on the same vessel. In view of this, any damages that may ensue from the warrant of arrest could not be attributed solely to the defendant in this case
The Decision
The Court refused the application of a counter-warrant and hence the precautionary warrant remained in force.
