20th May 2020

Author: Martina Farrugia, Associate

INTRODUCTION

The Ports and Yachting Directorate within Transport Malta has issued Port Notice Number 07/20 entitled ‘Dispute resolution and procedures in connection with bunkering operations’ in order to remind its recipients about the provisions of the Dispute Resolution (Procedures) Regulation under subsidiary legislation 545.30 of the laws of Malta.

The port notice highlighted the availability of an authorised provider and a customer to bring forth a complaint to the Regulator in order to settle a dispute between them. This comes as a timely reminder in a period where local Courts have been closed due to Covid-19 measures.

In accordance with the Port Notice, the regulation is applicable to bunkering operations where a dispute has arisen between the bunkering fuel operator and provider and the receiving vessel. The procedure provides for an alternative dispute resolution mechanism (ADR) that is intended to be swift, economical, transparent and simple. Much of its attraction lies in the fact that disputes between authorised providers are to be settled within 4 months while disputes between an authorised provider and a consumer must be settled within 90 days, with extensions are only allowed in exceptional circumstances. Complaints and supporting documentation may be filed with the Regulator online and subject to certain conditions, the decisions taken by the Regulator are binding on the parties to the dispute, with administrative fines imposed for non-compliance.  This procedure is however entirely voluntary and is an alternative dispute resolution mechanism which does not affect  the parties’ rights to proceed to arbitration or to court should they prefer.

More details are available below.

SUBSIDIARY LEGISLATION 545.30 – DISPUTE RESOLUTION (PROCEDURES) REGULATION

THE INVOLVED PARTIES:

Taking a closer look at the Regulation, the involved parties are as follows:

The Authorised Provider:

The Dispute Resolution (Procedures) Regulation is not limited to bunkering operations and defines an authorised provider as any natural or legal person whether privately or publicly owned, who has a valid authorisation to operate, provide or carry out any activity or operation or to provide any service relating to energy and energy and water services.

The Consumer:

The consumer means any person who uses or requests a service or product the provision of which is regulated by the Act who is acting for purposes which are outside his trade, business, craft or profession. This definition raises questions as to who can qualify as a consumer, however the Port Notice explains that this shall be applicable ‘for bunker operations where a dispute arises between the bunkering fuel operator and provider and the receiving vessel’.

The Regulator:

The Regulator, established under the Regulator For Energy and Water Services Act, is composed of a Chairman and not less than four and not more than six members. Members are appointed by the Minister for a term of 5-7 years and may be re-appointed only once.

PROCEEDINGS BEFORE THE REGULATOR

The Regulation provides for two scenarios, dispute resolution where the parties are both authorised providers and dispute resolution where the parties are an authorised provider and a customer. The Regulation seeks to provide authorised providers and consumers with an alternative dispute resolution mechanism that is intended to be simple and transparent, offering  binding decisions delivered in a swift and economical manner.

Where a dispute arises between authorised providers, The Regulator must initiate an investigation into the dispute as soon as possible and must seek to resolve the dispute within 4 months from the date when the dispute was notified to it. This time frame may be extended by a further two months  where additional information is sought and the parties agree to such an extension.

Under the Regulation, the Regulator has the power to initiate an investigation of its own initiative. The jurisdiction of the Regulator is however, not automatic, and the Regulator may refuse to initiate an investigation where it is satisfied that other means of resolving the dispute in a timely manner are available to the parties. It may also refuse to initiate an investigation where the dispute is already subject to legal proceedings. Where a decision has been taken to refuse to initiate an investigation the Regulator must inform the parties as soon as possible. However, if within 4 months from such a decision, the dispute has not been resolved or the party seeking redress has not initiated legal proceedings, the Regulator may, at the request of a party, initiate an investigation.

Subject to possible appeal, the Regulator’s decision shall be binding on the parties and failure to abide by the decision shall be considered an infringement of the Regulation, subject to an administrative fine.

Under the Regulation, the Regulator shall also have jurisdiction in cases where a consumer alleges that an authorised provider has made an infringement of the Regulator for Energy and Water Services Act or subsidiary legislation made thereunder.  When referring a dispute, a consumer must show on a prima facie basis that it has been affected by an act or omission of the authorised provider. In resolving the dispute, the Regulator may amongst other directives, order the authorised provider to effect reimbursement of payments received or to make compensation payments. Such payments may include the whole or part of the costs relating to the engagement of a lawyer or technical adviser engaged in submitting the dispute. Should a party fail to abide by an order given, the Regulator may impose an administrative fine of not more than €600 for each day of non-compliance.

Interestingly, the Regulator is not a compulsory dispute settlement mechanism for disputes arising between authorised providers and consumers. In fact the provisions of the Regulation make clear that ‘the provisions of this Regulation shall be without prejudice to the right of a consumer to have recourse to any other body in resolving any such dispute’.

As many other alternative dispute resolution mechanisms, the Regulator aims to be expeditious in its investigations, with the Regulation setting out a 90 day period within which disputes must be resolved. This time frame may only be extended in exceptional circumstances. The Regulator aims to increase efficiency by allowing complaints and supporting documentation to be submitted online.  Official communication may also be made by electronic means or if applicable, by post.

When faced with a consumer complaint against an authorised provider, the Regulator may refuse to deal with complaint in the following circumstances:

  1. Where consumer did not first attempt to contact the authorised provider in order to discuss his complaint and seek to resolve the matter with the authorised provider directly.
  2. Where the dispute is frivolous or vexatious.
  3. Where the dispute is being or has been considered by another dispute resolution entity or by a Court.
  4. Where the Consumer did not submit the complaint to the Regulator within one year from the date upon which the consumer submitted the complaint to the authorised provider
  5. Where dealing with the dispute would serious impair the effective operation of the Regulator.
  6. Where the consumer has not submitted the complaint to the Regulator within 2 years from the date upon which the facts constituting the substance of the complaint have first arisen.

According to the Regulation, decisions are binding on the parties to the dispute. However, where the  dispute is between an authorised provider and a consumer, it is only binding on consumer if has been informed of binding nature in advance and has specifically accepted this.

It is to be noted that though decisions are binding, they are not final and decisions taken by the Regulator are subject to appeal before the Administrative Review Tribunal within 20 days of the decision. Appeals may be filed on the following grounds:

(a) that a material error as to the facts has been made;

(b) that there was a material procedural error;

(c) that an error of law has been made;

(d) that  there  was  some  material  illegality,  including unreasonableness or lack of proportionality

CONCLUSION:

The Regulation aims to provide for an alternative dispute resolution mechanism that seeks to increase consumer protection, in a timely and cost effective manner. In times where Courts are closed due to COVID-19 containment measures, authorised providers and/or consumers looking for quick settlement of a dispute may consider this mechanism as a valid alternative. Nonetheless, it is advised that disputes involving complex legal issues should continue to be referred before a Court so that one may make full use of all the legal mechanisms available therein.

The full port notice can be accessed here.

©Fenech & Fenech Advocates 2020

Disclaimer │ The information provided on this Update does not, and is not intended to, constitute legal advice. All information, content, and materials available are for general informational purposes only.  This Update may not constitute the most up-to-date legal or other information and you are advised to seek updated advice.