Maltese Supreme Court delivers ruling on Jamaican sale of Fabrizia

Dr Marlon Borg, litigation lawyer based in Malta and Lead Senior Associate within local law firm DF Advocates, has advised us of what was described as a significant legal development in case of bulk carrier Trading Fabrizia (IMO 9481960) (IMN January 26th 2018).

At the Jamaica Conference Centre in Kingston in January an auction took place of the 2011-built, Panama-flagged, 22,988 gt bulk carrier. A Greek shipper, Bluefin Marine of Athens, made the highest bid, at $10.3m.

Trading Fabrizia had sailed into Jamaican waters at the end of October 2016 and was arrested on behalf of Italy-based Jebmed SRL, which was owed a debt of nearly $700,000 by Capitalease, the owner of the vessel.

The auction followed a Supreme Court order that Jamaica’s admiralty bailiff, Augustus Sherriah, should appraise and sell the ship if Capitalease failed to provide alternative security of just over $1.9m to satisfy Jebmed and three other parties to a claim against it.

Other parties had made claims for fuel supplied to the ship, wages due to the crew, maintenance and other incidentals.

Jebmed tried to have the ship released into its possession so that it could take it to dry dock in Malta, where the ship is registered, and sort out the relevant certificates which had expired. However, the court rejected that application.

A judgement was delivered on February 8th by the Superior Courts of Appeal in Malta, in which DF Advocates represented Jebmed SRL, would certainly interest you.

Jebmed had a mortgage registered on the vessel in Malta which designated Jebmed as first-ranking creditors on Trading Fabrizia. When she was sold in January 2018, Jebmed remained unpaid – even though $3m was reserved for it to submit a claim, Dr Borg said.

The vessel, now named MV Bright Star by the new owners, was arrested in June 2018 while bunkering in Maltese territorial waters, on the basis that Jebmed’s mortgage was not recognized in Jamaica, and so the sale could not be recognized as having been made “as free and unencumbered”.

Following various court encounters between DF Advocates and the legal team representing MV Bright Star, the Superior Courts of Appeal in Malta have ruled that Malta cannot recognize the sale in Jamaica as having been made “as free and unencumbered” when Jamaica failed to recognize and apply the mortgage in favour of Jebmed as if it had been applied in Malta. This was said to have been on the basis of the principle of reciprocity in international law.

Dr Borg told IMN that “such a judgement has certainly set an unprecedented bar in the industry, particularly in light of the fact that Malta boasts to have one of the largest ship registries worldwide.”