CONTROLLED COMPANIES (PROCEDURE FOR LIQUIDATION) ACT

CHAPTER 383

CONTROLLED COMPANIES

(PROCEDURE FOR LIQUIDATION) ACT

To make provision for the liquidation and the distribution of assets

belonging to controlled entities.

8th November, 1995

ACT XVII of 1995 as amended by Acts XXIV of 1995 , IX of 1997 , VI

of 2001 , XVII of 2002 and X of 2011 and Legal Notice 212 of 2023 and

Act XXIX of 2025.

The short title of this Act is Controlled Companies

(Procedure for Liquidation) Act.

In this Act, unless the context otherwise requires -

"Central Bank" means the Central Bank of Malta established by

the Central Bank of Malta Act;

"competent authority" means the body appointed as the competent

authority under and for the purposes of the Banking Act;

"controlled asset" means and includes a bank or other credit

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

of which the Minister, in terms of article 18 of the Banking Act * , or

the competent authority in terms of article 29 of the Banking Act,

has appointed a person or persons to assume control of the same;

"Controller" means a person appointed by the Minister in terms

of article 18 of the Banking Act † or by the competent authority of

Malta in terms of article 29 of the Banking Act;

"Minister" means the Minister responsible for finance.

(1) The provisions of this Act and of the Banking Act shall

apply to such controlled assets in relation to which the competent

authority after consultation with the Central Bank of Malta shall

have made an order for liquidation under this Act.

(2) In making an order for liquidation the competent authority

after consultation with the Central Bank of Malta may direct that

any controlled assets may, for the purpose of liquidation under this

Act, be treated as one entity.

(1) Whenever the competent authority after consultation

with the Central Bank of Malta makes an order for the liquidation

of a controlled asset, the Controller shall proceed by notice

published in the Gazette to call upon all creditors who may have a

claim against or upon the controlled asset to make such claim with

him wi thin three m onths from the date of such n otice. T he

Controller shall, together with such notice, publish a list of

creditors who are recognised by him as having a valid claim against

the controlled asset, as well as the amount due by the controlled

asset on such claim.

*Repealed by Act XV of 1994. See the Banking Act (Chapter 371).

CAP. 383.] CONTROLLED COMPANIES (PROCEDURE FOR LIQUIDATION)

(2) Any person failing to make his claim within the said period

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

shall not be taken into account by the Controller in the liquidation

and distribution scheme of the controlled asset

Provided that a creditor whose claim has been recognised

by the Controller in terms of this article need not bring forward his

claim within the said period.

(3) The Controller shall, on the lapse of the period mentioned

in subarticle (1), publish in the Gazette a comprehensive list of all

the claims made to or recognised by him.

(4) Any person having an interest in the liquidation or

distribution scheme of a controlled asset may, within one month

from the publication of the list mentioned in subarticle (3), make

objection to any claim recognised by the Controller or brought

forward in terms of this article.

(1) The Controller shall proceed to determine any claims

and objections made, to wind up and liquidate any controlled asset,

to appoint an independent auditor to audit his accounts, and to draw

up a scheme of distribution and make a report thereof to the

Minister.

(2) An extract of the report by the Controller showing the

creditors recognised by him as having a valid claim against the

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

preference attaching to such claims, shall be published by the

Controller in the Gazette.

(3) In making the report and drawing up the scheme of

distribution, the Controller shall determine the date as from which

the controlled asset was insolvent.

(4) Notwithstanding the provisions of article 29(3)(d) of the

Banking Act, the provisions of article 485 of the Commercial Code

shall apply mutatis mutandis to a controlled asset

Provided that the provisions of the said article shall not

apply to any act done by the Controller or under his authority.

(5) Where any act has been made or omitted to be made by a

controlled asset, or by the owner, director or manager of such asset,

which results in the fraudulent deprivation of the rights of the

creditors of such a controlled asset, the Controller shall be entitled,

as the case may be, to ignore the act so made or to deem the act as

having been made despite the omission to make such act.

(6) The Controller shall in drawing up the scheme of

distribution, proceed to rank creditors having pledges, privileges or

hypotecs in accordance with the law for the time being in force at

the time of distribution

Provided that any pledge or privilege, arising, created or

registered after the date established by the Controller in terms of

subarticle (3), shall be ineffectual unless such pledge or privilege

was created by the Controller

Provided further that the fees and expenses incurred by the

Controller in the administration, control and liquidation of any

controlled asset shall be ranked prior to any other claim

whatsoever.

(1) Any person who feels aggrieved by the report and

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

appeal to the Appeals Board constituted under this Act by an

application made within a period of one month from the date of

publication in the Gazette of the extract of the report mentioned in

article 5.

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

report and scheme of distribution mentioned in article 5, the

Controller shall refer the said report and scheme of 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 styled the Appeals Board which shall consist of a

Chairman and two other members appointed by the Minister.

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

office, take before the State Advocate the oath to examine and

decide any matter referred to them with equity and impartiality.

(3) The Chairman shall be an advocate with a minimum of

twelve years legal practice.

(4) The two other members mentioned in subarticle (1) shall be

persons who in the opinion of the Minister, possess the necessary

expertise and experience in banking or financial services.

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

period that the Minister may establish in their letter of

appointment, which period shall not exceed three years, and may

only be removed by the Minister on the advice of the Commission

for the Administration of Justice on the grounds of proved inability

to perform the functions of their office whether arising from

infirmity of body or mind or any other cause, or proved

misbehaviour.

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

Code of Organization and Civil Procedure vested in the Civil

Court, First Hall.

(2) Any warrant or order issued by the Board shall be signed by

the Chairman and certified by the Registrar.

(3) The enforcement of the decisions of the Board in the

manner prescribed in the Code of Organization and Civil Procedure

shall be decided by the Chairman of the Board.

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

titles.

(1) The Board shall, unless the Minister by order otherwise

directs, hold its sittings in the edifice of the Courts of Malta, and

the registry of the superior courts shall be the registry of the Board.

(2)

The Minister may appoint a Secretary to the Board for such

CAP. 383.] CONTROLLED COMPANIES (PROCEDURE FOR LIQUIDATION)

period as the Minister may establish in the Secretary’s letter of

appointment, which.period shall not exceed three years.

(3) The Secretary shall perform all functions which are vested at

law in the Registrar of Courts.

(1) The Board shall have the sole and exclusive

jurisdiction to hear and determine

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

by the Controller;

(b) any claim made by the Controller against a third party

including any claim for the delivery of any property

held by third persons;

(c) any matter related to, or arising from, the report and

scheme of distribution published by the Controller;

(d) any claim made against any Controller arising in

whatsoever manner from the administration and

liquidation of any assets under his control.

(2) The Board shall also have the sole and exclusive

jurisdiction to enforce any decision made by it as well as any

judgment delivered by a competent court in Malta against the

Controller.

(1) The decisions of the Board shall be delivered in open

Court.

(2) The decisions of the Board shall be taken by a majority of

votes.

(1) The decisions of the Board shall be final except with

respect to points of law decided by the Board from which an appeal

shall lie to the Court of Appeal.

(2) An appeal under this article shall be by application to the

Court of Appeal filed within fifteen days from the day of service of

the decision of the Board.

(3) The Minister responsible for justice may by regulations

under this subarticle establish fees relative to the filing of judicial

acts in the registry of the court in connection with appeals to the

Court of Appeal under this Act

Provided that until such time as regulations are so made by

the Minister, the fees contained in Schedule A to the Code of

Organization and Civil Procedure shall apply.

(4) The board established under article 29 of the Code of

Organization and Civil Procedure may make Rules of Court

governing appeals to the Court of Appeal under this Act.

All cases and claims pending before the Civil Court, First

Hall, and being cases and claims against the Controller of a

controlled asset in respect of which an order for liquidation 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 further than the Controller shall have the power to

refer any matter to arbitration under such terms and conditions as

he may deem fit, and any matter so referred, as well as any matter

referred to arbitration prior to the coming into force of this Act,

shall be heard and decided by and in accordance with the terms of

reference to arbitration notwithstanding the provisions of this Act.

Upon the finalization of all appeals and upon the decision

of the Board of the reference made to it of the scheme of

distribution, the Controller shall proceed to liquidate and distribute

the assets under his control in accordance with his scheme of

distribution as amended or approved, as the case may be, by the

Board.

(1) The Controller shall also, in accordance with article

161 of the Commercial Partnerships Ordinance * or any other

provision of any other law substituting the said Ordinance, deliver

to the Registrar for registration by him a notice of such approval,

and the Registrar shall thereupon strike the name of the company or

partnership off the register.

(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 of ten years from the

date at which the name of the company or partnership was struck

off the register.

No action shall lie against the Controller, the Appeals

Board or the Government for anything done under the authority of

this Act or of the Banking Act and this article shall apply from the

date of appointment of the Controller even if that date happens to

be before the date of the coming into force of this Act.

The Minister may by order waive any tax or fiscal liability,

or part thereof, due by a controlled asset in respect of which an

order for liquidation has been made.

The Minister may make regulations not inconsistent with

any of the provisions of this Act for the carrying out of the

provisions of this Act.

*Repealed by Act XXV of 1995 (Chapter 386).