14 June 2006

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Business Today

Court accepts seafarers’ million liri claim

James Debono

On 6 June the Civil Court presided by Judge Joseph R Micallef, ordered Sea Malta Company Limited to pay the sum of Lm 1,043,876 in termination benefits and allowances to its former sailors in what is the next twist in the whole Sea Malta saga that sees government increasingly coming out on the losing end.
The payment is to be made “at the first opportunity offered by the current liquidation procedures.”
Sea Malta claimed that the seafarers’ action was premature as the payment could only be made after liquidation procedures are completed.
The court, however rejected this claim.
The company was placed in liquidation in December 2005 after the Sea Malta privatisation was wrecked following the seafarers’ refusal to accept the conditions offered to them by Grimaldi.
On 15 March the court upheld the seafarers’ request to restrain the sale of the company’s only two sea vessels claiming that sale by tender could prejudice any privileged claims made by the seafarers as dictated by the Merchant Shipping Act.
Following an appeal by the liquidators, the Court of Appeal reiterated the first court’s judgement and decided that the ship should be sold by judicial auction.
The seafarers based their claims of precedence on article 37 of the Merchant Shipping Act.
The Merchant Shipping Act states that wages due to master, officers and other members of the vessel’s complement are to be considered as privileged credits.
The court accepted the seafarer’s argument that the sale by tender could prejudice their potential claims.
Last week’s court decision, which certifies the seamen’s one million claim strengthens their case but does not determine whether the seafarers enjoy any precedence over the other creditors.
On 1 June the Maltese Falcon was auctioned and bought by Grimaldi. The proceeds from the sale will remain lodged in court until a final decision of the courts regarding the claims of the different creditors.
Dr Carmel Chircop appeared for the former Sea Malta sailors.


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