02.04.2025
Through the amendments made to the Merchant Shipping Act (the ‘MSA’), Chapter 234 of the Laws of Malta, Act No. 1 of 2025 (the ‘Act’) marks a significant development in Malta’s maritime legislative framework, as it introduces crucial legislative updates aimed at introducing new regulations and modernising existing provisions, ultimately ensuring that Malta’s maritime sector remains competitive globally.
Ship Registration
The Act reforms a number of ship registration procedures. First and foremost, the Act reduces the maximum age limit for a ship to be registered under the Malta Flag from 25 years to 20 years, resulting in a change of the existing default position that a ship may only be registered if it is under 25 years of age since the year of construction. The Registrar-General still retains the discretion in determining whether any ship over the age of 20 years, as opposed to 25 years, ought to be registered under the Malta Flag. This reform is in line with the reality that ships are being scrapped at a younger age.
The Act also removes the requirement for shipowners to identify a ship under construction by painting the identities on a board, maintained near the place in the yard of the builder where the ship is being built. The requirement for shipowners to paint the ship’s official number, name, and port of registry on the ship’s keel and side, and subsequently on the ship’s stern remains in force.
Ship Finance
Most notably, the Act is characterised by the introduction of provisions which enable the recording of a new finance charter instrument, aimed at adding to an already robust legal framework on registered securities and complementing the existing legal provisions of mortgages in Malta, and formally securing the lessor’s rights as a charge over the vessel in a finance charter scenario as . The introduction of this novel security instrument by Malta as an EU jurisdiction is aimed at protecting financiers, shipowners, and charterers.
The Act seeks to optimise provisions relating to mortgages in Malta, amongst which, (i) the introduction of a provision which allows for the correction of any error on a mortgage deed upon consent of the other party or parties, within seven days of the registration of said deed; and (ii) the assignment of index numbers to mortgages.
Notably, the Act introduces the registration of mortgages over ships under construction.
Reducing Bureaucracy through Administrative Reform
A number of powers previously held by the Minister are now bestowed upon the Registrar-General. The Act aims to achieve a more-efficient and a less-bureaucratic system of governance of maritime administration in Malta.
Digitalisation of Maritime Processes
The Act comprehensively addresses the digitalisation of maritime processes found in the MSA. It ensures, amongst other new processes of digitalisation, that any notice required to be sent under the MSA to the master, owner, or any other person representing the ship, is deemed valid if it is done via electronic mail. Electronic copies of certain vessel documents, including inter alia all declarations of ownership, bill of sale, and builder’s certificate, may now be retained in electronic copy by the Registrar-General.
Seafarers’ Rights
The Act clarifies that if a ship is subject to a judicial sale, the wages due to seafarers continue to accrue until the seafarers either leave the ship or until the ship is in fact sold.
The provision relating to the accommodation for seamen is amended to reflect that regulations under said article may now be made by reference in whole or in part to the requirements of the Maritime Labour Convention, 2006, replacing reference previously made to outdated conventions of the International Labour Organisation.
Other Amendments
The Act introduces a definition of the term "bareboat charterer", being “a person who leases or sub-leases a ship, by means of a contract for a stipulated period of time, during which period such person shall acquire full control and complete possession of the ship, including the right to appoint her master and crew for the duration of the charter but excluding the right to sell or mortgage the ship”, and makes amendments to numerous provisions of the MSA to now include the term "bareboat charterer" in such a way that obligations previously imposed on the owner or on the master are similarly extended to the bareboat charterer.
Shipowners intending to register a ship under the MSA, may now reserve the proposed name of the ship for a maximum period of twelve months.
The MSA has now been updated to reflect an updated list of treaties or conventions (and any protocols, annexes and appendices thereto) to which the Government of Malta is empowered to ratify or accede to in accordance with the Ratification of Treaties Act.
In Conclusion
This Act serves as a testament of Malta’s dedication to ensuring that its maritime legislation keeps abreast with and complies to international standards. These legislative reforms address the needs of the global maritime community and are further intended to bolster administrative efficiency. They are aimed at improving legal clarity for key maritime players, including financiers, shipowners, charterers, managers, and seafarers alike. The Act will formally take effect within two months after their official publication in the Malta Government Gazette.