The Court of Appeal presided by Mr Justice Anthony Ellul held that the appeal lodged against an arbitration award was null and void as the grounds of appeal were not points of law. This was decided on 17 June 2016 in Euroshops Limited and Maurice Gruppetta -v- Attard & Co (Industrial) Limited.
In their statement of claim the plaintiffs asked that the Arbiter would order Attard & Co to pay €16,469, together with commissions emerging from a consultancy agreement of October 2008 for advertising and sales from EDCO to Malta and Libya, amounting to €20000.
In their statement of defence Attard & Co argued that Mr Gruppetta was not authorised to sign on behalf of Attard and Co an agreement with EDCO Eindhoven BV. This agreement was terminated. Furthermore, the defendant claimed Euroshops had purchased mechanise from the defendants, but failed to pay.
The Arbiter on 5 September 2012, upheld that plaintiffs’ claims and ordered Attard & Co to pay and that the parties to share the costs.
Attard & Co appealed the award on the ground that the arbiter discarded a legal point that they had a right to terminate the contract only for a valid reason, as indicated in the agreement itself. The plaintiffs replied by saying that the ground of appeal are not point of law.
The Court analysed the first plea of the appeal and explained that civil appeals are part of the Maltese legal system. Who loses a case has a possibility to appeal, not only on the ground that the judgement contains mistakes on the law or on the procedure, but on a wide range of grounds. However, the Court noted that the law does impose some limitations, as for example the time in which they are to appeal and the difference between partial judgments and definitive judgements. Normally there are restrictions on appeals from Tribunal decisions in that they would be limited to points of law. If the law is silent on whether there is a right of appeal, then it should be considered that the right exists. On the other hand if the law prohibits a right of appeal, the court should raise the issue itself and declare that it has no jurisdiction to hear the case.
Article 70A(1) of the Arbitration Act restricts the right of appeal in voluntary arbitration to “a point of law arising out of a final award made in the proceedings”. Then Article 70C(1) states:
“A party to mandatory arbitration proceedings shall have a right of appeal to the Court of Appeal both on points of fact and on points of law arising out of a final award made in the proceedings.”
In this particular case the arbitration was a voluntary one and therefore was restricted on a point of law. Article 70A(3) lists the points of law the Court of Appeal may decide on. James Leabeater in his book Civil Appeal: Principle and Procedure wrote: “very often it is easy to identify a point of law. The necessary ingredients for a tort; the legal consequences of a frustrated contract; whether a contract breaker is liable to account for profits he has made from his deliberate breach of contract; all these are legal questions. More difficult to identify are issues of application: how to decide whether particular facts satisfy a legal test. In some circumstances that may amount to a pure question of fact. In other circumstances, the manner in which the legal test is applied may be or include a question of law. In others – perhaps most – the decision will mix different questions of law and fact.”
Therefore, the English Courts have decided that issues on the whether there was a breach of a contract is a question of fact and not of law. The Maltese Courts have decided in the same manner as in Elmo Insurance Services Ltd –v- Joseph Bonnici decided on 20 October 2003. This is similar to the present case. In fact the appeal application mentioned that the arbiter ignored the legal right of a party to terminate a contract for valid reasons. In fact they quoted from the agreement that that the Company could terminate at any time in the event that the appointment of the company is for any reason terminated by EDCO through no fault of the company. The application then makes reference to evidence produced. The Court commented that the appellant company failed in keeping to Article 70B of the Arbitration Act. It is the appellant that has to identify which point of law mentioned in the decision which is being challenged and which is the correct interpretation of the law. This did not take place.
The Court then moved to uphold the plea that the appeal application is null.
Av. Malcolm Mifsud
Partner
Mifsud & Mifsud Advocates
This article may also be accessed on Malta Today.
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