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9th January 2007
Ruling of the Court of Appeal of Malta in the case P.M.U. vs Zeturf Ltd
On 9th January 2007 the Maltese Court of Appeal made a pronouncement in the case of P.M.U. vs Zeturf Ltd. The Court of Appeal has refused to enforce in Malta a judgment delivered by a French court against Zeturf - a remote gaming company licensed in Malta.
On 8th July 2005 a French tribunal delivered a judgment, confirmed on appeal in Paris on 4th January 2006, which had ordered Zeturf Ltd to cease taking online bets in France and in default to pay a fine, which on appeal in France was determined to be EUR50,000 a day.
Subsequently P.M.U. sought to have the judgment enforced in Malta and initiated legal proceedings in the Maltese Courts under the Council Regulation on the jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (44/2001). Under this Regulation, the enforcing court has no right to go into the merits of the foreign decision, but can disallow the enforcement on a limited number of grounds. For the Regulation can only apply if the decision being enforced is of either civil or commercial nature.
In accordance with the procedures stipulated by Regulation 44/2001, P.M.U. requested a court in Malta to recognize the French judgment and allow its enforcement.
At that stage Zeturf lodged an appeal. In terms of Regulation 44/2001, the court in the jurisdiction of enforcement can deny enforcement only on limited, explicitly listed in the Regulation grounds. Zeturf put forward four pleas:
1. A preliminary plea of non-applicability of Reg 2001/44: no enforcement can be sought on the basis of Regulation 2001/44/EC since the said Regulation may only be invoked in respect of a civil or commercial nature, while the current case is an administrative one;
2. A preliminary plea that the French judgment does not contain an order enforceable in Malta;
3. Without prejudice to the foregoing, Zeturf was not given fair hearing in France, therefore the French decision should not be allowed enforcement in Malta in terms of Reg.34(ii) of Regulation 2001/44;
4. Without prejudice to the foregoing, the French decision goes against public policy of Malta, therefore it should not be allowed enforcement in Malta in terms of Reg.34(i) of Regulation 2001/44.
The Court of Appeal P.M.U refused to allow enforcement, since the Court concluded that the matter under consideration was of administrative nature and, accordingly, could not be enforced under the Regulation 44/2001. To this effect, the Maltese Court of Appeal made reference to a number of decisions of the European Court of Justice as to the interpretation of what constitutes ‘civil or commercial matter’ and to the structure of P.M.U. While P.M.U. is incorporated in France as a commercial entity, it is, nevertheless, is regulated by an ‘ad hoc’ law which gives it power normally not afforded to private enterprise. The Court concluded that in the case under consideration P.M.U did not act on the basis of rights normally extended to private persons. On the contrary, P.M.U. acted jure imperii, as a public authority. Therefore, the Court of Appeal concluded that P.M.U. is an entity of an administrative nature that is empowered to enforce French policy on relevant gaming matters. Accordingly, once the matter is of an administrative nature, it is outside the scope of the EC Regulation and cannot be enforced using its procedures.
As the result, the Court of Appeal reversed the decision of the Civil Court, First Hall (the court of first instance) and declared the judgment of French tribunal unenforceable in terms of Regulation 44/2001. In the circumstances, the Court did not consider necessary to discuss other pleas. The costs were ordered to be paid by P.M.U.
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