ACT No. XVII of 1995 AN ACT to make proviso" for Ihe liquidation and the distribution of tustts belonging to controlled emitiu.

(L.S.)

UGO MIFSUD BONNIC I

Presiden t

9th June , 1995

ACT No. XVII of 1995

AN ACT to make proviso" for Ihe liquidation and the distribution of

tustts belonging to controlled emitiu.

BE IT ENAC I ED by the President . by and with the advice and

consent of the House o f Representatives, in this present Parliame nt

asse mbled, and by the autho rity of the same, as follows ;-

I. (\) This Act may be cited as the Controlled Companies

(Procedure for Uquidation) Act , 1995.

(2) This Act shall come into force on such date as the

Minister may by notice in the Gaze tte: appoi nt.

In this Ad , un less the context o therwise req uires -

~ Controlled asset" means and includes a bank or other credit

institution , properly, partnership, firm or other business in respect

of whi!;h the Ministe r, in terms of section 18 of the Banking Act

(Cap. 215 of the Laws of Malta enacted by Act V o f 1970 and as

subsequent ly amended) now repealed, or Ihe Central Bank of

Malta in lenns ofseclion 29 o f the Banking Act , 1994 (Act No. XV

of 1994) replacing the said Banking Act, Cap. 21 5 of the Laws of

Malta , has appoi nted a person or persons to assume control of the

same;

"Conlroller~

means a person appoi nted by the Minister in

terms of section 18 of the Banking Act (Cap. 215 of the Laws o f

Malta enacted by Act vor 1970and as subsequently amended ) now

repealed , o r by the Central Bank of Malta in terms of section 29 o f

the Banking Act . 1994 (Act No. XV o f 1994) replacing the said

Banking Ad , Cap. 215 o f the Laws of Malta

- Mi nister" means the Ministe r responsible for fi nance.

( I) The provisions of this Act and of the Banking Act, 1994

shall apply 10 such controlled assets in relation 10 which the Cent ra l

Bank of Mall a shall have made an orde r for liquidatio n under th is Act .

(2) In making an o rd er for liquidati on the Central Bank of

Malta may direct that any oontrolled asse ts may. for the pu rpose o f

liquidation under this Act, be treated as one entit y.

( I) Whenever the Cenlral Bank of Malla makes an order for

the liq uidation o f a controlled asse t , the Con n olle r shall proceed by

nOlice published in the Gazelle to call upon all cred itors who may have

a claim against o r upon the controlled asset to make such claim with him

with in three mon ths from the date o f suc h notice. The Controller shall ,

toget her wi th such notice, publish a list o f creditors who are recognised

by him as tlaving a val id claim agai nst the con n olled asset, as well as the

amount due by th e contro lled asset on such claim.

(2) Any person failing to ma ke his clai m within the said

period shall be barred from bringing forward his claim and any such

claim shall not be ta ken in to accoum by the Controller in the liquidation

and distribution scheme of the controlled asset

Provided that a creditor whose claim has bee n rerognised by

the Con troller in terms o f this section need not bri ng forward his claim

within the said period.

(3) The Controller shall. on the lapse o f the period

men tioned in subsection (I) hereof, publish in the Gazelle a

comprehensive list of all the claims made to or recognised by him.

(4) Any perso n having an interest in the liquida tion or

distribu tion scheme of a co nt rolled asset may , within one month from

the publica tion of the list menti oned in subsection (3) he reof, mak e

objection to any claim recognised by the Controlle r or brought forward

in terms of thi s $Cetio n.

( I ) The Controllershall proceed 10 determ ine any claims and

objections made, to wi nd up and liquidate any co ntrolled asset, to

appoin t, an indipe nden t audi to r to audit his accoun ts, and to draw up a

scheme of distribu tion anc m3ke a repo rt thereof to the Minister.

(2) An ext ract of the report by th e Controller showing the

creditors recognised by him as having a va lid claim against the

controlled asset, the amount due on suc h claim, and any right of

prefere nce allachi ng to such claims , shall be published by the Controller

in the Gazelle.

(3) In maki ng the report and drawing up the scheme of

dislribUlion , the Controller shall determine the date as from which the

controlled asset was insolvent.

(4) Notwithstanding the provisions of .subparagraph (d) of

subsection (3) of section 29 of th e Banking Act, 1994, the provisions of

section 485 of the Commercial Code shall apply mutatis mutandis to a

controlled asset

Provided that the provisions of the said section shall not apply

to any act done by the controller o r under his a uthority.

(S) Where any act has been made or omilled to be made by a

controlled asset , or by the owner, di rector or manage r of such asse t,

which results in the (raudule nt deprivation of the rights of the creditors

o f such a colltrolled asse t. the Conuolle r shall be entitled, as the case

may be, 10 ignore the act so made or to deem the act as having been

made despite the omission 10 make such act.

(6) The Controller shall in drawi ng up the scheme of

dist ribution, proceed to rank creditors having pledges, privileges or

hypotechs in accordance with th e law for the ti me being in force at the

time o f distribution;

Provided that any pledge or privilege, arising, created or

registered after the date established by the Controller in terms of

subsection (3) hereof, shall be ineffectual unl ess such pledge or privilege

was created by the Controller;

Provided furthe r that the fees and expenses incurred by the

Controller in the administration , control and liquidation of any

controlled asse t shall be ranked prior to any other claim whatsoever.

(\) Any person who feels aggri eved by the report and scheme

of distribution made by the Controller shall have a right to appeal to the

Appeals Board constituted unde r this Act by an application made

within a period o f one month from the date o f publication in the Gazette

of th~ ext ract o f the report mentioned in section 5 of this Act.

(2) Within one month from the publication o f the extract of

the report and scheme of distribution mentioned in section 5, the

Controller shall rder the said report and scheme o f distribution to the

Appeals Board for its approval or variation .

(1) For the purpose of this Act there shall be constituted a

Board to be styl ed the Appeal.s Board which shall consist of a Chairman

and two other members appointed by the Mi niste r.

(2) The members of the Board shall , before entering upon

their office , take before the Anomey General the oath 10 examine and

decide any maller referred 10 them with eq uity and impartiality.

(3) The Chairman shall be an advocate wit h a mi nimum of

twelve years legal practice.

(4) The two olher members mentioned in subsection (1) of

this. section shall be persons who in the o pinion of the Ministe r , possess

the necessary expe rtise and experience in banking or financial services.

(5) The members of the Board shall be appointed fo r such

period that the Minister may establish in theiT letter of appointment,

which period shall not exceed three years, and may only be removed by

the Minister on the advice o f the Commission for the Administration of

Justice on the grounds of proved inability to perform the functions of

their office whether arisi ng from infirmity of body or mi nd o r any other

cause, or proved misbehaviour.

(\) The Board shall have all such powers as are by the Code

of Organisation and Civil Procedure vested in th e Civil Court, First

Hall.

(2) Any wa rran t or order issued by the Board shall be signed

by the Olainnan and certified by the Registrar.

(3) The enforcement of the decisions of the Bo ard in the

manner prescribed in the Code of Organisation and Civil Procedure

shall be decided by th e Chainnan of the Board .

(4) The decisions of the Board shall have the force of

executive titles.

The Board shall. unless the Minister by order o th erwise

directs. hold its sinings in the edifice of the Cou rts of Malta . and th e

registry of the Superior Courts shall be the registry of the Board.

(I) The Board shall have the sole and exclusive jurisdiction

to hear and detennine

(a) any appeal made from any determination of any claim by

the Controller;

(b) any elaim made by the Controller against a third pa rty

including any claim fo r the delivery o f any propeny held by third

persons;

(c) any maner related to, o r ariSing from , th e report and

scheme of distribut ion published by the Controller;

(d) any claim made against any Controller arisi ng in

whatsoever manner from the administration and liquidation of any

assets unde r his con trol.

The Board shall also have the sole and excl usive

(2)

jurisdiction to enforce any decision made by il as well as any judge ment

delivered by a competent court in Malta againstl he Controller.

11 . (1) The decisions o f the Board shall be delivered in open

Court.

The decisions of the Board shall be tak en by a majorityo(

(2)

votes.

(1) The decisions o f th e Board shall be fi nal except with .... wcalon

respect to points of law decided by the Board (rom which an appeal shall poin .. olla w •

lie 10 the Court of Appeal.

(2) A n appeal under this section shall be by application to

the Courtof Appeal61ed withi n fifteen days from thedayofthedecision

of the Board.

All cases and claims pendi ng before the Civil Court First Hall Pendiasc:lal .....

and before the Commercial Court an d being cases and claims against the

ConlJoller of a controlled asset in respect of which an order for

liq uidation under this Act has been made, shall be transferred to the

Appeals Board and shall continue to be heard and determined by such

Board

Provided that nothing contained in this Act shall detract from the

jurisdiction of the Court of Appeal to continue to hear any case pending

before it;

Provided furt her tha;: the Controller shall have th e power to refe r

any matter to arbilration under such tenus and conditions as he may

deem fit , and any matter so referred , as well as any maller referred to

arbitration prior to the coming in to force of this Act, shall be hea rd and

decided by and in accordance with the tenns of refe rence to arbitration

notwithstanding the provisions of this Act.

Upon the fi nalization of all appeals and upon the decision of

th e Board of the re fere nce made to it of the scheme of distribution , the

Controller shall proceed to liquidate and distribute the assets unde r his

control in accordance with his scheme of distribution as amended or

approved , as the case may be , by th e Board .

IS. (I) TIle Conlrolle r shall also, in accordance with section 161 Slritin,oft

of the Commercial Partnership Ordinance or any o ther provision of any

other law substituting the said Ordinance , delive r to the Registrar for poortne ..... ip.

registration by him a notice of such approval, and the Registrar shall

there upon strik e the name of the company or partne rship off the c.p. 168.

registe r.

(2) The Controller shall , together with the aforesaid notice,

deliver the books and other documents of the company to the Registrar,

who shall keep them for a period o f ten years from the date at which the

name of the company or partne rship was struck off the register.

No action shall lie against the Controller, the Appeals Board

or th e Government for anything done under the authority o f this Act or

of the Banking Act and Ihis $Celion shall apply from th e date of

appointment o f the Conlrollereven if that date happens to be before the

date of the coming into fo rce of this Act.

Wli~rot, .. Of

The Minister may by order waive any tax or fiscal liability. o r

r ..... llillbi~'y.

pan thereof, due by a controlled asset in respect of which an o rder for

liquidation has been made.

Passed by the House of Re presentatives at Sitting No. 427 o f the 30th May. 1995 .

L A WRENCE GONZI

Spcnker

RIC H AR D J . CAUCHI

Clerk to tile House of Representatives.

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