Joiners to proceedings and In rem jurisdiction of the Malta Courts

The Court of Appeal composed of Chief Justice Silvio Camilleri, Mr Justice Giannino Caruana Demajo and Mr Justice Noel Cuschieri on April 13, 2018 in the case “Cassar Fuel Limited vs MV Madra IMO8918710 and by decree of 22 January 2015 Dr Alessandro Lia and LP Gerald Bonello as deputy curators” held among other things that this court had the authority to call other persons into the suit as codefendants even if – by doing so, it would be changing the nature of the legal action, to both an action in rem and an action in personam and regularise its possible lack of jurisdiction to hear and decide the case.

The facts in this case were as follows:

The defendant vessel MV MADRA in in rem proceedings filed an appeal from a Court decree of the First Hall Civil Court dated 16 January 2017 where third parties were ordered to be joined to the proceedings as co defendants.

The applicant company, Cassar Fuel Limited, filed this lawsuit to request payment of bunkers supplied to the defendant vessel.

Before the presentation of this lawsuit, the applicant obtained a warrant of arrest against the vessel but the vessel managed to escape from Malta unlawfully by the time this lawsuit was filed. This, despite the arrest warrant.

Subsequently this suit was filed and curators were appointed to represent the defendant vessel. The curators raised a number of pleas, among which the lack of jurisdiction of the Maltese Courts at the time this lawsuit was filed, as well as the lack of observance of our procedural rules to file an action in rem.

Later, the applicant Cassar Fuel Limited asked this Court to join, the owner of the vessel “Madre Marine Co. Ltd”, the operators “Jupiter Shipping & Trading” and the Captain “Captain Ali Yilmaz” to these proceedings.

By decree of 16 January 2017, the First Hall Civil Court accepted this request and ordered the third parties to be joined.

The applicant claimed that these third parties were directly involved in the supply of fuel to the vessel, - the merits of this case.

The defendant vessel contested the applicant’s requests for these third parties to be called into the suit. It said that this was an in rem legal action against the vessel and the lack of jurisdiction of the Malta Courts could not be regularised by changing the nature of the action from an action in rem to an action in personam. The First Court did not accept defendant’s argument. It said that by calling these persons into the suit, this case would still be an action in rem. In fact by joining these persons to the proceedings the legal action would become both in rem and in personam.

The Court noted that if it were to reject applicant’s requests, the person who violated an order of the Court, and who escaped from Malta in violation of our law, would stand to benefit. This, the Court said, would not be acceptable.

The defendant vessel submitted no valid reason why such persons should not be called into the proceedings.

This Court felt that the third parties (listed in applicant’s request) should be joined to these proceedings and this to avoid the multiplicity of legal action, as well as for the integrity of the proceedings.

For these reasons the First Court decided to accept applicant’s request and ordered, Madre Marine Co. Ltd, Captain Ali Yilmaz and Jupiter Shipping & Trading to file their sworn reply within twenty days from the notification of these acts.

The curator appealed from this decree. They submitted that the applicant Cassar Fuel Limited requested such persons to be called into the suit in order to regularise its legal action and to substitute the defendant vessel in this lawsuit – as the Maltese Courts did not have jurisdiction to hear and decide this lawsuit.

Lack of jurisdiction: According to Article 762B Chapter 12, there were a number of cases when an in rem legal action was possible.

Our Courts on several occasions confirmed the elements which had to exist so that an in rem legal action would succeed.

In Malta Towage Ltd vs Dr. Adrian Camilleri et noe, our Courts said:

“.... il-ġurisdizzjoni hija radikata f’azzjoni ta’ dan it-tip fil-każijiet meta (a) l-kreditu jaqa’ taht xi cause of action elenkat fil-liġi; (b) l-azzjoni titressaq kontra l-vapur bħala konvenut fil-kawża; (ċ) il-vapur ikun flibħra Maltin, u (d) il-vapur irid ikun ġie maqbud jew miżmum milli jitlaq minn Malta, u dawn iridu jippersistu tul l-azzjoni anke [?] jekk ma jkunx sar depożitu tal-ammont pretiż fil-qorti, u dan sabiex l-istess deċiżjoni tkun tista’ tiġi esegwita kontra tiegħu .... ”

In the latter case, the Court said that it had no jurisdiction to decide this action in rem which necessitated the presence of the vessel in Maltese territorial waters or that after the arrest was lifted, a deposit was made in the Maltese Courts, in order to enable the vessel to leave Malta.

Defendant vessel maintained that the Maltese Courts did not have jurisdiction in this case.

Persons could not be called into the suit in order to regularise applicant’s legal action, nor to substitute the defendant.

Reference was made to ‘Teresa widow Cilia’ vs ‘Vincenzo Drago’ et dated 3 February 1960, where the Court noted that the third parties called into the suit should have an interest in the outcome of the proceedings. It observed as follows:

“Illi huwa minnu li ġie ħafna drabi deċiż minn dawn it-tribunali li l-kjamata in kawża mhix ammissibbli meta l-interess tal-persuna li għandha tiġi kjamata kien jeżisti mill-bidu tal-proċediement, imma ġurisprudenza lokali altrettantu awtorevoli, bażata fuq studju aktar penetrattiv tal-istess ġurisprudenza relativa, affermat li dak il-prinċipiu li ġie fuq enunzjat huwa sod u veru meta l-konvenut iniziali jkun persuna assolutament estranea u ma ikollu ebda interess fil-kawża għarraġuni loġika li f’każi simili bil-kjamata jkun hemm sostituzzioni tal-konvenut mill-persuna kiamata, mentri jekk il-konvenut inizjali, għalkemm ma jkunx l-uniku interessat, fil-fatt ikollu wkoll interess filkawża, l-istess kjamata ta’ interessati oħra mal-konvenut inizjali u oriġinarju, li jkollu interess, ilproċedura invokata ma tkun qiegħda tapporta ebda sostituzzjoni, imma biss reintegrazzjoni tal-proċess u kwindi l-istess hija permessa u sostenibbli .... ”

Defendant vessel said that this Court should not approve other persons to be joined in these proceedings simply to regularise the Courts’ lack of jurisdiction.

It submitted that the action in rem could not be converted to an action in personam, against persons who were not sued in this case, just to save applicant’s legal action. Defendant vessel argued that at the time of the presentation of this lawsuit, this Court did not have jurisdiction to decide this case, as the vessel in question at the time, was not in Maltese territorial waters.

It said that Cassar Fuel Limited, was well aware of the situation and should have sued other persons, but still chose to sue the vessel, even when this Court had no jurisdiction.

Defendant vessel claimed that the First Court should have first decided the plea of jurisdiction. If the Court decided that it did not have jurisdiction, the case would have ended there and the Court would have no jurisdiction to call other persons into the suit.

The defendant vessel added that by requesting third parties to be joined into the proceedings, applicant Cassar Fuels Limited sought to give this Court jurisdiction.

If this Court had no jurisdiction, it also had no jurisdiction to call third parties into the suit. Besides, the calling of persons into the suit should not be used to give the court jurisdiction by changing the defendants in the proceedings, maintained defendant vessel.

This Court however noted that the situation changed by the introduction of article 175 (1) of Chapter 12. It was now possible to change the defendant and thereby confer jurisdiction on the courts. At this stage the Court said that by calling a person into the suit, the defendants were being added, and not changed.

By calling someone into the suit, the defendant vessel would not be prejudiced, pointed out the court. If the court were to accept the plea of lack of jurisdiction vis-a-vis the vessel, the vessel would still be freed from the proceedings and the case against the vessel would end, though the case could still continue against the other defendants who were called into the suit. The vessel did not have any legal interest to contest the jurisdiction of this court over such other defendants.

The Court said that it was true that by calling other persons into the suit, Cassar Fuel Limited’s legal action would become both in personam and in rem, and if the Courts were to accept the plea of no jurisdiction in rem, this legal action would become an action in personam.

It was possible for a case to be made against both a vessel as well as against persons, and there was no incompatibility for a legal action to be both an action in rem and an action in personam.

The Court of Appeal was of the opinion that the First Court was correct to allow a third party to be joined, as now the case could continue even if the Court did not have in rem jurisdiction over the vessel, without the applicant having to file another lawsuit. In addition, when the court accepted to call a third party into the suit, this did not mean that it rejected the plea of no jurisdiction, pointed out the court.

In terms of Article 730 Chapter 12, a court had to decide this plea (of lack of jurisdiction) specifically before or at the time of the final decision. This plea could not be decided tacitly. This Court still had to decide the plea of no jurisdiction in this case.

For these reason on 13 April 2018, the Court of Appeal dismissed the appeal and confirmed the decree. It ordered the case to be sent back to the First Court for continuation, after the third parties were notified that they were ordered to join these proceedings as defendants.