Conflict of law issues in the ranking of maritime creditors : a comparative analysis

Abstract

The first chapter of this term paper shall revolve around the local scenario concerning the applicable law regarding the ranking of maritime creditors. The author shall delve into the general principles of Maltese PIL as well as expound on its historical development, ultimately leading to the current regular practice. Various references shall be made to English common law principles, which is pertinent since Maltese courts make constant reference to said position in case of any lacunae which may arise under Maltese law. A plethora of English decisions shall be explored in order to better comprehend why the English courts have favoured such a stringent lex fori approach over the years.

The second chapter shall then solely focus on a comparative analysis between the Maltese setup and other foreign jurisdictions including the USA, Canada, Greece, Cyprus, Australia and South Africa to mention a few. The author will provide the reader with a detailed research on each jurisdiction’s PIL rules as well as their preferred choice of law procedure. There shall be both jurisdictions that share Malta’s view regarding the ranking of maritime creditors, as well as jurisdictions who opt for a totally different system. The three possible approaches shall be identified and each jurisdiction shall have various case law substantiating their position vis-à-vis the applicable law that shall reign in these scenarios. The author shall also explore the rationale behind each country’s choice of ranking of maritime creditors, and whether certain significant connecting factors which tend to sway the applicable law in their favour, are truly taken into consideration or simply left aside in favour of each country’s PIL rules, i.e. preferring to follow in the footsteps of pivotal foreign landmark decisions surrounding the matter.

The final chapter shall then include any concluding remarks about the Maltese position after having analysed foreign jurisdictions. The author shall also seek to answer the following question to the best of his knowledge after researching this topic: ‘Is the fact that we apply the lex situs in Malta, the correct approach, both conceptually and economically, especially when compared to how other jurisdictions tackle this issue?’

There shall be reference throughout to Chapter 234 of the Laws of Malta, i.e. the Merchant Shipping Act with constant allusion to Articles 37-54A, as well as reference to foreign maritime codes surrounding which applicable law is to govern in the ranking of maritime creditors. The author shall also briefly look into a number of significant international conventions such as the International Convention on Maritime Liens and Mortgages, 1993 and the Arrest Convention 1952. The author shall also make reference to the COCP, with a particular look into sub-title III of competing claims, i.e. articles 416 to 435.