   COMMERCIAL CODE       [ CAP. 13.             1
CHAPTER 13
COMMERCIAL CODE
   To amend and consolidate the Laws relating to Trade.
ORDINANCES XIII of 1857, XV, XVI, XVII, XVIII and XIX of 1858 and II of 1898, and
ACTS: XIV and XXIX of 1933* - as amended by Ordinances: III of 1863, VII of 1868, V of
1904; Acts: XV of 1924, XXX of 1927, XII of 1929; Ordinances: XXX of 1931, XXXVII of 1939
and VII of 1941 - Consolidated.
The Code was subsequently amended by Ordinances: XVIII of 1944, XIII of 1946, X and
XXV of 1962; Legal Notices 4 of 1963 and 46 of 1965; Acts: XXXI of 1966, XI and XLVI of
1973 and LVIII of 1974; Legal Notice l48 of 1975; Acts: XXII of 1976, XLIX of 1981, IX and
XVI of 1982, XIII of 1983, XXXVII of 1988, VIII and XXXIII of 1990, XXIV of 1995, XVI of
2000 and XXXI of 2002.
*(2nd October, 1857) *
(21st December, 1859) †
(26th April, 1898) ‡
(12th May, 1939) §  
(3rd August, 1933) *
* See  Proclamation No. XXI of the 2nd of October, 1857.
† See  Proclamation No. XII of the 2lst of December, 1859. 
‡ See  Proclamation No. II of the 26th of April, 1898.
§ See  Proclamation No. XXV of the 12th of May, 1939.
* See  Act No. V of 1927 omitted under the Statute Law Revision Ordinance, 1936, and Government Notice.
No. 266 of the l8th of July, 1933
2               CAP. 13. ]               COMMERCIAL CODE
ARRANGEMENT OF CODE 
Articles
Short Title  1
PART I
Of Trade In General
Preliminary Provisions 2-3
Title I. Of Traders and Acts of Trade 4-12
Title II. Of the Duties of Traders 13-37
  Sub-title I. Of Trade Books 13-26
  Sub-title II. Of Publication of Marriage Contracts 27-31
  Sub-title III. Of Limits of Competition 32-37
Title III. Of the Register of Traders 38-48
Title IV. Of Persons Auxiliary to Traders 49-109
  Sub-title I. Of Agency in general 49-56
  Sub-title II. Of Managers 57-66
  Sub-title III. Of Commercial Travellers and Salesmen 67-69
  Sub-title IV. Of Mercantile or Commission Agents 70-78
  Sub-title V. Of Brokers 79-95
  Sub-title VI. Of Commission Merchants 96-109
Title V. Of Commercial Obligations 110-118
Title VI. Of the Chamber of Commerce 119-122
Title VII. Of Bills of Exchange, Promissory Notes, and Drafts or
Cheques on Bankers or Cashiers 123-263
  Sub-title I. Of Bills of Exchange 123-259
Of the Form of a Bill of Exchange 123-129
Of the Duties of the Drawer 130-135
Of Endorsement 136-147
Of Acceptance 148-157
Of Acceptance for Honour or by Intervention 158-167
Of Joint and Several Liability 168
Of Surety  par aval 169-171
Of Maturity and Payment 172-208
Of Payment for Honour or by Intervention 209-217
Of the Rights and Duties of the Holder 218-246
Of Protest 247-251
Of Re-exchange 252-259
  Sub-title 1I. Of Promissory Notes, and Drafts or Cheques on Bankers or
Cashiers
260-263
Title VIII. Of the Contract of Account Current 264-272
   COMMERCIAL CODE       [ CAP. 13.             3
PART II
Of Maritime Trade And Of Navigation
Articles
Title I. Of the Contract of Affreightment 273-337
  Sub-title I. General Provisions 273-281
  Sub-title 11. Of the Rights and Duties of the Person letting the Vessel
and the Freighter
282-311
  Sub-title III. Of the Dissolution of Contracts of Affreightment 312-320
  Sub-title IV. Of Bills of Lading 321-327
  Sub-title V. Of Passengers 328-337
Title II.*  Of Contracts of Loan on Bottomry and  at respondentia 338-360
Title III. Of Marine Insurance 361-440
  Sub-title I. Of the Contract of Marine Insurance 361-385
  Sub-title II. Of the Rights and Obligations of the Insurer and of the
Assured
386-412
  Sub-title III. Of Abandonment 413-440
Title IV. Of Average and of Jettison and Average Contribution 441-468
  Sub-title I. Of Average 441-451
  Sub-title II. Of Jettison and Average Contribution 452-468
Title V*. Of Privileged Debts on Ships and other Sea-going Vessels 469-476
PART III
Of Bankruptcy
Title I. Of the Declaration of Bankruptcy 477-487
Title II. Of the Rights and Duties of the Curator of a Bankrupt 488-504
Title III. Of the Rights of Recovery 505-509
Title IV. Of the Proof of Debts against the Bankrupt's Estate 510-516
Title V. Of the Composition or Scheme of Arrangement 517-527
Title VI. Of the Ranking of Creditors 528-537
Title VII. Of the Rehabilitation and Discharge 538-540
PART IV
Of Prescription And Inadmissibility Of Action In 
Certain Commercial Matters, Of The Jurisdiction 
Of The Civil Court, First Hall, And Of 
Commercial Fees
Title I. Of Prescription and Inadmissibility of Action in certain
Commercial Matters
541-546
* Repealed by Act XXXVII of 1988.
4               CAP. 13. ]               COMMERCIAL CODE
Articles
Title II Of the Jurisdiction of the Civil Court, First Hall  547-549
Title III.  Of Commercial Fees 550-551
General Provision 552
SCHEDULE
   COMMERCIAL CODE       [ CAP. 13.             5
Short title.
PART I
O F  T RADE IN  G ENERAL
Preliminary
provisions added 
by Act XXX of 
1927.
P RELIMINARY  P ROVISIONS
Persons and acts 
affected.
2. The commercial law relates to traders and to acts of trade
done by any person, even though not a trader.
Applicability of 
law.
3. In commercial matters, the commercial law shall apply:
Provided that where no provision is made in such law, the usages
of trade or, in the absence of such usages, the civil law shall apply.
Title I
Provisions of this 
Title substituted by 
Act XXX of 1927.
O F  T RADERS AND  A CTS OF  T RADE
Definition of 
“trader”.
4. The term "trader" means any person who, by profession,
exercises acts of trade in his own name, and includes any
commercial partnership.
Acts of trade.
( a ) any purchase of movable effects for the object of re-
selling or letting them, whether in their natural state or
after being worked or manufactured; any sale or lease
of movable effects, in their natural state or after being
worked or manufactured, when the purchase thereof
has been made with the object of re-selling or letting
such effects;
( b ) any banking transaction;
( c ) any transaction relating to bills of exchange;
( d ) any time-bargain in securities;
( e ) any transaction relating to commercial partnerships or
to shares in such partnerships;
( f ) any transaction relating to vessels and navigation;
( g ) any undertaking relating to supplies, manufacture,
construction, carriage, insurance, deposits, public
entertainment and advertising;
6               CAP. 13. ]               COMMERCIAL CODE
( h ) any purchase and any re-sale of immovable property,
when made with the object of commercial speculation,
and any building enterprise;
( i ) any transaction ancillary to or connected with any of
the above acts.
Other commercial 
matters.
6. Obligations arising from collision of vessels, assistance or
salvage in case of wreck, stranding or abandonment, from jettison
or average are likewise commercial matters.
Presumption as to 
nature of act done 
by trader.
7. Every act of a trader shall be deemed to be an act of trade,
unless from the act itself it appears that it is extraneous to trade.
Persons who may 
carry on trade.
8. Any person capable of contracting, may trade, unless the
law precludes him from carrying on trade.
Minors.
Amended by: XLVI. 
1973.108;
XXIV.1995.362.
9. A minor who has attained the age of sixteen years, may
trade and shall be deemed to be a major with regard to obligations
contracted by him for purposes of trade, if -
( a ) he has previously been authorized to that effect by the
parent to whose authority he is subject, by means of a
public deed registered in the Civil Court, First Hall; or,
where both parents are dead, interdicted or absent, he
has been authorized by the judge of the Civil Court,
First Hall; and
( b ) a summary of the deed of authorization or of the
decree aforementioned has been published by means of
a notice in the Exchange, in the Government Gazette
and in another newspaper.
Powers of minors 
who are traders.
10. Minors who are traders authorized as aforesaid can by
reason of their trade charge, hypothecate and even alienate their
property, without any of the formalities prescribed by the civil law.
Applicability of ss. 
9 and 10 to minors
non-traders.
11. The provisions of articles 9 and 10 shall apply to minors
not being traders, with respect to acts declared to be acts of trade.
Revocation of 
authority by 
parent.
Amended by: XLVI. 
1973.108;
XXIV.1995.362.
12. (1) The authority granted to a minor by the parent vested
with parental authority to carry on trade may, at any time, be
revoked by the parent exercising such authority by means of a
public deed duly served on the minor.
(2) The deed of revocation shall be registered in the Civil
Court, First Hall, and published by means of a notice in the
Exchange, in the Government Gazette and in another newspaper.
(3) Such revocation shall in no case injuriously affect the rights
acquired by a third party, even in regard to transactions which are
still in the course of negotiation.
   COMMERCIAL CODE       [ CAP. 13.             7
Title II
Provisions of this 
Title substituted by 
Act XXX of 1927.
O F THE  D UTIES OF  T RADERS
Sub-title I
O F  T RADE  B OOKS
Obligatory trade 
books.
Amended by:
XIII. 1946.2.
13. Every trader is bound to keep the following books:
( a ) a waste-book;
( b ) a journal;
( c ) a cash-book;
( d ) an inventory-book;
( e ) a ledger.
Waste-book.
every commercial transaction which he makes, showing all the
conditions or terms to which it is subject.
Journal.
concluded by the trader, his debts and credits, his negotiations,
acceptances and endorsements of bills, and, generally, all that he
receives or pays for any cause whatsoever; and must show month
by month the sums disbursed for household expenses.
Cash-book.
sums received and those paid out by the trader, compared with the
journal; it must be balanced at least once a month.
Inventory-book.
containing a description and valuation of his whole estate, assets
and liabilities, whatever may be their nature and origin.
(2) The annual inventory shall be closed with a balance and
with a statement showing the profits and losses, and shall be copied
out year by year in the aforesaid inventory-book.
Ledger.
Added by:
XIII. 1946.3.
18. The ledger shall show an accurate and up-to-date record of
all transactions classified as personal and impersonal accounts and
so kept as to render possible the drawing up of a true and correct
picture of the state of affairs of the business or trade at any given
time.
Optional trade 
books.
19. Besides the books mentioned in the foregoing articles of
this sub-title, traders may keep other books and other papers
wherefrom the extent and the progress of their business shall
appear in a more detailed manner.
Duty of trader to 
keep letters, etc., 
received or 
forwarded by him.
20. Every trader shall keep, by order of date, the original of all
letters, invoices and telegrams received by him, and a copy,
whether hand-written or type-written, or a press-copy, of all letters,
invoices and telegrams forwarded by him.
8               CAP. 13. ]               COMMERCIAL CODE
Formalities to be 
observed in the 
keeping of trade 
books.
Amended by:
XXXVII. 1939.2.
21. (1) All books which traders are required to keep, with the
exception of the waste-book, shall be numbered and kept, by order
of date, without blanks or marginal notes.
(2) Whenever it shall be necessary to make any cancellation,
this shall be made in such a manner as to leave the cancelled words
legible.
(3) The provisions of this article shall not apply to such books
as were already in use before the first day of January nineteen
hundred and twenty-eight.
Proof by books.
Cap. 12.
22. (1) Trade books, whether obligatory or optional, shall
constitute evidence in terms of the Code of Organization and Civil
Procedure.
(2) Nevertheless, it shall not be lawful to divide the contents of
such books.
Power of court to 
order production of 
correspondence, 
etc.
23. (1) In the course of an action, the court may, at the
instance of one of the parties or of its own motion, order the
production of all correspondence touching the question at issue,
and of the trade books in order to abstract therefrom such portion
only as relates to the controversy.
(2) In such case, a qualified accountant chosen by agreement
between the parties or, in default, nominated  ex officio  by the court,
may be appointed in order to ascertain, without removing the books
and in the presence of the person producing them, whether such
books are in order, and to abstract therefrom such entries as relate
to the controversy.
(3) The opposite party may in counter-evidence produce his
own books kept according to law.
General 
examination of 
books.
24. In cases of winding up or liquidation of a partnership, or of
property in community or of successions, the court shall have
power to allow the examination of all the books subject to such
conditions and formalities as the court may in each case prescribe.
Retailers. 25. Retail traders are not bound to enter in their books the sales
made for ready cash: it will be sufficient for them to enter each day
the total amount of the sales made on such day.
Period for 
preserving books, 
etc.
26. Traders are bound to keep their trade books, letters,
invoices and telegrams received by them, for a period of five years
to be reckoned, in the case of trade books, from the date of the last
entry made in each book.
Sub-title II
O F  P UBLICATION OF  M ARRIAGE  C ONTRACTS
Publication of 
marriage contracts.
Amended by:
XXXVII.1939.3;
XXIV.1995.362.
27. (1) Every notary receiving a marriage contract or any deed
varying such contract between persons any one of whom is
described in the deed as a trader, shall, within fifteen days from the
date of such contract or deed, file with the Registrar of Courts of
Malta or with the Registrar of Courts of Gozo, according to the
   COMMERCIAL CODE       [ CAP. 13.             9
residence of the party described as a trader, a note containing the
following particulars:
( a ) the date of the contract or deed and the name of the
notary receiving such contract or deed;
( b ) the name of the party described as a trader;
( c ) the amount of the dowry and of the dower.
(2) The registrar shall cause a copy of the note aforesaid to be
posted up at the Exchange and published in the Government
Gazette.
Index of notes to 
be kept by 
registrar. 
Added by: 
XXXVII.1939.4.
Amended by:
XXIV.1995.362.
28. (1) The Registrar of Courts of Malta and the Registrar of
Courts of Gozo and Comino shall keep an Index, in alphabetical
order, of the notes filed with them respectively under the provisions
of the last preceding article.
(2) The Index shall be open to inspection by the public.
Penalty. 
Amended by: 
XXXVII. 1939.5; 
L.N. 46 of 1965; 
LVIII.1974.68; 
XIII.1983.5; 
VIII.1990.3;
XXIV.1995.362. 
29. Every notary who fails to comply with the provisions of
article 27 shall be liable, on conviction, to a penalty not exceeding
ten liri, at the suit of any interested party, or of the Attorney
General, by summons before the Civil Court, First Hall, or before
the Court of Magistrates (Gozo) in its superior commercial
jurisdiction, as the case may be.
Where spouse 
engages in trade 
after marriage. 
Amended by: 
XXXVII.1939.6.
30. (1) Where any one of the spouses engages in trade after
the marriage, or although already engaged in trade has not been so
described in the marriage contract, the obligations mentioned in
article 27 shall devolve upon such spouse.
(2) If such spouse fails to carry out the said obligations, such
spouse shall be liable to the penalty prescribed in the last preceding
article and may, moreover, in the event of bankruptcy, be adjudged
a fraudulent bankrupt.
Duty of registrar in 
case of demand for 
separation of 
property between 
spouses. 
Amended by: 
XXXVII.1939.7.
31. (1) The registrar shall cause every demand for the
separation of property between spouses any one of whom is
described in the Index mentioned in article 28 as a trader, to be
published in the Government Gazette.
(2) The registrar shall likewise cause the judgment on the said
demand to be published in the Government Gazette, and shall enter
a reference to such judgment in the said Index.
10               CAP. 13. ]               COMMERCIAL CODE
Sub-title III
O F  L IMITS OF  C OMPETITION
Unlawful use of 
names, marks or 
distinctive devices.
Amended by:
XVI. 2000.103.
Cap. 416.
32. Traders shall not make use of any name, mark or
distinctive device capable of creating confusion with any other
name, mark or distinctive device lawfully used by others, even
though such other name, mark or distinctive device be not
registered in terms of the Trademarks Act, nor may they make use
of any firm name or fictitious name capable of misleading others as
to the real importance of the firm.
False indication of 
origin of goods.
33. Traders shall not make use of any false indication of origin
of the goods:
Provided that a designation which according to commercial
usage is considered as a common designation, shall not be deemed
to be a false indication.
Spreading of news 
prejudicial to other 
traders.
34. (1) Traders shall not, for the purpose of competition,
spread news capable of prejudicing the business or trade carried on
by other persons.
(2) Moreover, they shall not make use of honours, patents,
medals, prizes or other distinctions to which they have no claim or
which have been obtained for some other branch of business or
trade.
Subornation of 
other traders ’  
employees.
35. Traders shall not suborn persons employed in the trade or
business carried on by a competitor for the object of knowing or
exploiting his customers.
Certificates of 
honesty or 
competency 
contrary to facts.
36. A   trader shall not, in the exercise of his trade or business,
issue certificates of honesty or competency contrary to the facts as
known to him and capable of imposing upon the good faith of
others.
Penalties. 
Amended by: 
XIII.1983.5; 
VIII.1990.3;
XXIV.1995.362.
37. (1) Any trader who contravenes any of the prohibitions
contained in articles 32 to 36 inclusively, shall, at the choice of the
injured trader, be liable either to an action for damages and interest
or to a penalty. The injured trader may, further, demand that every
thing done contrary to the said prohibitions be destroyed, or that
any other remedy be applied capable, according to circumstances,
of removing the act constituting the unlawful competition.
(2) Any action for damages and interest brought under this
article shall be governed by the rules of the civil law.
(3) The penalty, however, shall be fixed by the Civil Court,
First Hall, or by the Court of Magistrates (Gozo) in its superior
commercial jurisdiction at the suit of the injured trader, and shall
not be less than ten liri nor more than five hundred liri, having
regard to the seriousness of the fact, to its continuance, to the
malice of the offending party and to all other particular
circumstances of each case. Such penalty shall be paid to the
injured trader in settlement of all his claims for damages and
interest.
   COMMERCIAL CODE       [ CAP. 13.             11
Title III
Provisions of this 
Title substituted by 
Act XXX of 1927.
O F THE  R EGISTER OF  T RADERS
Register of traders.  
Amended by: 
VIII.1990.3;
XXIV.1995.362.
38. (1) Every trader and every commercial partnership may, if
they so desire, be registered in a special book to be called "Register
of Traders" which shall be kept under the authority of the Civil
Court, First Hall.
(2) There shall be kept under the authority of the Court of
Magistrates (Gozo) in its superior commercial jurisdiction another
register for traders residing in Gozo and for commercial
partnerships having their place of business there; such register,
however, shall be deemed to form an integral part of that kept under
the authority of the Civil Court, First Hall.
Qualifications for 
registration.
39. (1) Every person is entitled to be registered in the register
mentioned in the last preceding article, provided - 
( a ) he is actually engaged in trade or in any branch of
trade;
( b ) he is discharged, if he had previously been adjudged
bankrupt;
Cap. 9.
( c ) he has not been convicted of any of the crimes
affecting public trust or against property provided for
in the Criminal Code;
( d ) he produces a certificate from the Council of the
Chamber of Commerce as to the existence in his
respect of the conditions mentioned in paragraphs ( a ),
( b ) and ( c ).
(2) Where a commercial partnership is to be registered, the
conditions mentioned in paragraphs ( b ),   ( c ) and ( d ) of subarticle (1)
of this article must exist in respect of every one of the partners with
unlimited liability.
Procedure for
registration. 
Amended by: 
XVI.1982.2. 
Cap. 168.
40. Any person desiring to be registered in the aforesaid
register shall make an application before one of the courts
mentioned in article 38, as the case may be, producing all the
requisite documents, and, in the case of a commercial partnership, a
copy of the statement published in the Government Gazette in
terms of sub-article (1) of article 192 of the Commercial Partner-
ships Ordinance * , showing the date of registration of the
partnership and the date on which the relative certificate of
registration was issued.
Grant or refusal of 
application for 
registration.
41. (1) The judge or magistrate, as the case may be, shall
grant or refuse the application by a decree  in camera , ordering in
the first case, the registrar to enter applicant’s name in the register
and, in the second case, that the applicant be served with a copy of
the decree.
*Repealed by Act XXV of 1995 (Chapter 386).
12               CAP. 13. ]               COMMERCIAL CODE
(2) The decree refusing the application shall contain the
reasons for such refusal and shall be subject to appeal, by writ of
summons, to the Court of Appeal within eight days from the day of
the service above-mentioned.
Powers of court. 42. It shall be lawful for the court of first or second instance to
examine the applicant on oath and to require him to produce all
such evidence as it shall deem necessary for dealing with the
application.
Cancellation from 
register.
43. (1) The name of a trader or of a commercial partnership,
after having been duly entered in the register above-mentioned,
shall be liable to cancellation if the trader dies or retires from
business or if the partnership is dissolved, or if the one or the other
is adjudged bankrupt, or if the trader or any of the partners with
unlimited liability is convicted of any of the crimes mentioned in
paragraph ( c ) of sub-article (1) of article 39.
(2) The demand for the cancellation shall be made before the
competent court, by means of an application, by any interested
party or by the President of the Council of the Chamber of
Commerce, against the person or partnership concerned or his or its
lawful representative.
(3) The decree given on such application is also subject to
appeal within the same time and in the same manner as prescribed
in sub-article (2) of article 41.
Contents of 
register of traders.
Amended by:
XXIV.1995.362;
XXXI. 2002.256.
44. (1) Every entry in the register above-mentioned shall bear
a progressive number, and shall set out the name and surname of
the trader or of every partner with unlimited liability, as the case
may be, the trade name, the firm or partnership name under which
the trade is carried on, the place of residence and the trade or the
particular branch of trade carried on.
(2) Every registration in Gozo shall, without delay, be
communicated, by means of a legal copy, to the registrar in Malta who
shall enter such registration in the register of traders, allotting to it a
progressive number. Such number shall, without delay, be
communicated to the registrar in Gozo who shall forthwith enter the
same in the register kept under the authority of that court.
Certificate of 
registration.
45. It shall be lawful for any trader or commercial partnership,
at his or its own expense, to demand from the registrar a certificate
of his or its registration.
Register open to 
inspection.
46. The register of traders shall be open to inspection by every
person, free of charge.
Default of 
registration not to 
debar person from 
engaging in trade.  
Amended by: 
L.N. 46 of 1965; 
LVIII.1974.68; 
XIII.1983.5; 
XXIV.1995.360. 
47. (1) Default of registration shall not operate so as to
restrain any person from engaging in trade. Penalty for unlawful
use of term implying registration.
(2) Nevertheless, whosoever, without being duly registered or
after his name has been struck off the register of traders, shall, in
his correspondence or in any other paper relating to his business,
make use of any designation calculated to lead others to believe
that he is duly registered, shall be liable to a penalty of not less
   COMMERCIAL CODE       [ CAP. 13.             13
than five liri and not exceeding one hundred liri, at the suit of the
Attorney General, by writ of summons before the competent court
of commercial jurisdiction.
Parts of register for 
public brokers and 
commercial agents.
48. In the register of traders there shall be a special part for
public brokers and another for commercial agents.
Title IV
Provisions of this 
Title substituted by 
Act XXX of 1927.
O F  P ERSONS  A UXILIARY TO  T RADERS
Sub-title I
O F  A GENCY IN GENERAL
Law governing 
mercantile agency. 
Amended by: 
XLIX.1981.6. 
Cap.16.
49. In the absence of any agreement, law or custom to the
contrary, mercantile agency is governed by the provisions
contained in Title XVIII of Part II of Book Second of the Civil
Code so far as applicable, with the exception of article 1861:
Cap.452.
 Provided that where a mercantile agency involves also the
obligation on the part of the agent of performing particular
services, then it shall also be governed by the provisions of the
Employment and Industrial Relations Act, so far as applicable.
Effects of acts 
done by agent 
within scope of his 
authority.
50. All acts done by the agent on behalf of the principal, within
the scope of his authority, produce directly their effect whether in
favour of or against the principal.
Rules regarding the 
validity and effects 
of acts done by 
agent.
51. For the purpose of establishing the validity and the effects
of the act done by the agent, regard shall be had to the capacity of
the principal and to the intention of the agent:
Provided that where at the time of the conclusion of the
transaction the principal is in bad faith, he cannot set up the good
faith of the agent.
Form of agent ’ s 
authority.
52. Where the law requires that an act be expressed in writing,
the authority given to an agent to do such act must be conferred in
writing.
Agent ’ s powers.
to buy shall not be deemed to include the power to buy on credit,
and the power to sell shall not be deemed to include the power to
sell on credit.
Duty of agent 
towards third 
parties.
54. (1) The agent is bound to furnish to the third party every
information as to the extent of the authority conferred on him by
the principal and, if the third party so requires, the agent is bound
to deliver to such third party a declaration duly signed by him to the
effect that a given transaction is comprised within the said
authority.
Cap .9.
(2) Any false statement wilfully made by the agent in the said
declaration shall be considered as a forgery of a commercial
document within the meaning of article 183 of the Criminal Code,
and shall be liable to the punishment therein prescribed, without
prejudice to any action for damages and interest.
14               CAP. 13. ]               COMMERCIAL CODE
How principal 
withdrawing 
agency, may free 
himself from 
liability towards 
third parties.  
Amended by: 
VIII.1990.3;
XXIV.1995.362.
55. Where the agency has been conferred in general terms, the
principal who withdraws the agency, may relieve himself from all
liability towards third parties for any further acts done by the agent,
by giving notice of such withdrawal by means of a note filed in the
Civil Court, First Hall, or in the Court of Magistrates (Gozo) in its
superior commercial jurisdiction, as the case may be, and causing
such note to be published in the Government Gazette and in another
newspaper, and affixed in the Exchange.
Transaction of 
business by agent 
with himself.
56. It shall not be lawful for the agent to transact with himself
a business of his principal, whether on his own behalf or on behalf
of any other person, directly or through the medium of a third party,
without the authority or ratification of the principal.
Sub-title II
O F  M ANAGERS
Definition of 
manager.
57. A manager is a person who is placed, personally and
permanently, in charge of the business or of a branch of the
business of the principal in one or more fixed places.
Who may be 
manager.  
Amended by: 
XLVI.1973.108.
58. Any person, whatever his or her age, may be a manager.
Manager ’ s 
authority may be 
express or implied. 
59. (1) The authority to act as manager may be express or
implied.
(2) In the first case, where the principal desires to limit the
authority conferred on the manager in such a way as to raise a
presumption that the limitations imposed are known to third
parties, he must file in the one or the other of the courts mentioned
in article 55 a note showing in detail all such limitations, and cause
such note to be affixed in the Exchange and published in the
Government Gazette and in another newspaper, possibly a
commercial newspaper.
(3) In the second case, the authority to act as manager shall in
regard to third parties be deemed to be general and to comprise all
matters pertaining and necessary to the exercise of the business or
branch of business in respect of which it has been conferred, unless
the principal proves that such third parties knew of the aforesaid
limitations at the time the transaction was concluded.
Liability of 
principal.
60. The principal shall be liable for the acts of the manager and
for the obligations contracted by him within the limits of the
business or branch of business which has been entrusted to him.
Loan made to 
manager.
61. A loan ( mutuum ) made to the manager is not binding on the
principal except when the object for which it has been made has
been stated, and such object actually relates to the business or
branch of business in charge of which the manager has been placed.
Duties of manager. 62. (1) The manager shall always deal in the name of the
   COMMERCIAL CODE       [ CAP. 13.             15
principal, and when signing shall, besides his own name and
surname, indicate the name and surname or the firm name of the
principal, with the clause  per procura  or some equivalent clause.
(2) In default of such indication, the manager shall be
personally liable; but in such case, third parties may bring, also
against the principal, any action arising from the acts of the
manager pertaining and necessary to the exercise of the business
with which he is charged.
Manager may not 
transact business 
on his own or other 
party ’ s behalf.
63. (1) The manager shall not, either on his own behalf or on
behalf of others, without the express consent of the principal, carry
on or have any interest in any business of the same nature as that in
charge of which he has been placed.
(2) If the manager acts in contravention of this prohibition, the
principal may, at his option, either take action for damages and
interest or demand payment of any profits made by the manager in
any transaction entered into in violation of his duty.
Manager may sue 
or be sued.
64. The manager may sue or be sued in the name of the
principal for any obligations arising out of the acts done by him in
the exercise of the business or branch of business with which he is
charged, even if the principal is present in Malta.
Liability of 
manager.
Amended by:
XVI.1982.2.
65. The manager is jointly and severally liable with the
principal for the observance of the provisions contained in Title II
of this Part of this Code in regard to all matters relating to the
business or branch of business with which he is charged.
Determination of 
manager ’ s 
authority.
66. The determination of the manager’s authority shall be
made public with the same formalities prescribed in sub-article (2)
of article 59, even where the grant of the authority had not been so
made known.
Sub-title III
O F  C OMMERCIAL  T RAVELLERS AND  S ALESMEN
Duties of 
commercial 
travellers.
67. (1) Commercial travellers shall produce to the customers
with whom they deal in the name of the principal, the instrument
creating their authority and defining its limitations.
(2) In the absence of an express authority, they cannot receive
the price of goods, unless they personally deliver the same, nor can
they grant time for payment or allow discount in respect of
transactions concluded by them.
(3) They may receive complaints addressed to the principal,
and may sue or be sued in the name of the principal in respect of
obligations arising out of transactions concluded by them in the
name of the principal himself.
Duties of 
salesmen.
68. (1) Salesmen entrusted with wholesale or retail sales, are
empowered to receive within the warehouse or place of business,
the price of goods sold by them, unless the receipt of payments is
16               CAP. 13. ]               COMMERCIAL CODE
entrusted to some other person as cashier.
(2) They cannot receive such price outside the warehouse or
place of business, unless they produce the power giving them
authority so to do or deliver a receipt signed by the principal.
Commercial 
travellers and 
salesmen may not 
exercise same trade 
as principal. 
Amended by: 
XIII.1983.5; 
VIII.1990.3.
69. (1) Commercial travellers and salesmen shall not, without
express authority, exercise the same trade as the principal, either on
their own behalf or on behalf of others, and shall not communicate
information about customers to the detriment of the principal.
(2) Whosoever acts in contravention of this prohibition shall be
liable for damages and interest; and shall moreover be liable to a
fine ( multa )   of not less than five liri nor exceeding one hundred liri,
on proceedings taken at the suit of the principal, before the Court of
Magistrates.
Sub-title IV
O F  M ERCANTILE OR  C OMMISSION  A GENTS
Definition of 
mercantile or 
commission agent.
70. A mercantile or commission agent is a person permanently
and personally employed by one or more firms abroad to promote
their business in Malta and to transmit orders for acceptance.
Licence to act as 
mercantile or 
commission agent. 
Amended by: 
XXXVII.1939.8; 
L.N. 46 of 1965; 
LVIII. 1974.68; 
L.N.148 of 1975; 
IX.1982.2. 
Cap. 168.
71. (1) No person shall act as a mercantile or commission
agent, whether alone or in partnership with any other person,
without a licence from the Council of the Chamber of Commerce.
(2) Such licence shall not be granted unless -
( a ) an application in writing is made to the said Council in
such form as the Council shall prescribe, containing
the full name and surname, age, private and business
addresses of the applicant and such other particulars
concerning his business or occupation as the Council
shall require. In the case of a person applying for
licence to carry on the business of a mercantile or
commission agent in partnership, a reference shall be
made in the application to the statement published in
the Government Gazette in terms of sub-article (1) of
article 192 of the Commercial Partnerships
Ordinance * , showing the date of registration of the
partnership and the date on which the relative
certificate of registration was issued;
( b ) the applicant satisfies the said Council, by bankers’,
trade or other references, that he is a fit and proper
person to act as a mercantile or commission agent and
that he has an adequate knowledge of the commercial
laws and customs relating to the functions, rights and
duties of mercantile or commission agents;
*Repealed by Act XXV of 1995.  See  the Companies Act (Chapter 386).
   COMMERCIAL CODE       [ CAP. 13.             17
( c ) the applicant produces to the said Council a certificate
of good conduct from the Commissioner of Police.
(3) A licence under this article shall not be granted to any
person who is in the employment of the Government of Malta or of
any bank, or to any person holding a warrant to practise a
profession in Malta and actually practising such profession.
(4) An appeal, by means of an application, shall lie to the Court
of Appeal against any refusal to grant a licence under this article.
(5) All licences granted under this article shall be advertised in
the Government Gazette. In the month of January of each year, a
complete list of the licences in force shall likewise be published in
the Government Gazette.
(6)Any licence issued under this article may be withdrawn or
suspended by the Court of Appeal on the application of the
Attorney General, if the holder of the licence -
( a ) is convicted of any crime against property;
( b ) is adjudged bankrupt;
( c ) accepts employment under the Government of Malta,
or with any bank, or becomes the holder of a warrant
to practise a profession and actually practises such
profession;
( d ) is proved, to the satisfaction of the court, not to be a fit
and proper person to act as a mercantile or commission
agent.
(7) Such withdrawal or suspension shall be published in the
Government Gazette.
(8) Any proceedings under this article may be conducted  in
camera , if the court shall so direct.
Power of President 
of Malta to 
prescribe fee for 
licence. 
Amended by: 
XXXVII.1939.9; 
XXV.1962.4; 
L.N. 46 of 1965; 
LVIII. 1974.68. 
72. The President of Malta may, by regulation, *  prescribe the
fee to be charged by the Council of the Chamber of Commerce in
respect of the grant of a licence to act as a mercantile or
commission agent under the provisions of the last preceding article.
Any such regulation may prescribe the payment of an annual fee in
addition to the fee payable on the issue of the licence and may
provide that in default of payment of any such annual fee, the
licence shall cease to be in force.
Penalties. 
Amended by: 
XXXVII. 1939.10; 
VII.1941.2; 
XIII.1983.5
73. Any person who, without a licence in force at the time,
represents himself to be, or acts or undertakes to act as a mercantile
or commission agent, shall be liable on summary conviction to a
fine ( multa ) not exceeding fifty liri, and in the case of a second or
subsequent conviction, to imprisonment for a term not exceeding
three months or to a fine ( multa ) not exceeding one hundred liri or
to both such imprisonment and fine.
*For regulations under this article, see G. N. No. 310 of 1939.
18               CAP. 13. ]               COMMERCIAL CODE
Non-acceptance of 
transaction by 
principal.
74. Any transaction negotiated by the agent shall be deemed to
be abandoned, if the firm on receiving notice of the transaction
fails to give notice of its acceptance to the third party or to the
agent himself within the time normally required for a reply.
Duties of agent. 75. The agent shall furnish to each firm all local information
concerning it, and shall keep in his books separate entries of the
business done on behalf of each firm.
Powers withheld 
from agent.
76. Saving an express authority, the agent is not empowered to
receive moneys on behalf of the principal nor can he grant time for
payment or allow any discount. He may receive complaints in
regard to defects in the goods and may sue and be sued in the name
of the principal.
Commission due to 
agent.
77. (1) Saving any agreement to the contrary, the agent shall
be paid by commission on the transaction subject to the same being
completed. In case of partial payment, the agent may only demand
a commission in proportion to the amount paid.
(2) The agent shall be entitled to the full commission if the
transaction goes off by the default of the firm.
(3) Where, however, an agent has the sole agency for Malta, he
shall be entitled to the full commission even if the business has
been transacted directly by the firm without his intervention.
Time limit for 
terminating 
agency.
78. (1) Where the agency conferred by the firm is not for a
limited time, both the principal and the agent may terminate the
agency by giving three months’ previous notice, saving the right of
the agent to any commission due in respect of business in course of
transaction.
(2) This rule shall not apply where the agency is terminated on
grounds of bad faith on the part of either the principal or the agent.
Sub-title V
O F  B ROKERS
Requirements for 
becoming a public 
broker.
Amended by: 
XXIV.1995.362. 
79. (1) Every person desiring to become a public broker shall
apply to the Council of the Chamber of Commerce producing
proofs of his majority and good conduct.
(2) The said Council shall depute three merchants to examine
the applicant on the subject of the rights and duties of public
brokers and on all other matters touching their profession.
(3) If the applicant is approved, the said council shall grant him
a certificate of competency signed by the President of the Council.
(4) Before entering on the duties of his office, the public broker
shall take before the judge of the Civil Court, First Hall, an oath
that he will faithfully perform the duties of the said office, and a
note of such oath shall be entered by the judge on the said
certificate of competency, affixing thereto the date and his
   COMMERCIAL CODE       [ CAP. 13.             19
signature.
(5) Brokers complying with all the aforesaid formalities shall
be registered in a special part of the register of traders mentioned in
Title III of this Part of this Code.
Forfeiture of office 
of broker.  Cap. 9.
80. If a public broker is convicted of any of the crimes
provided for in Sub-titles I, II and III of Title IX of Part II of Book
First of the Criminal Code, he shall,  ipso facto ,   forfeit his office,
and his name shall be struck off the register of traders.
Punishment for 
unlawful exercise 
of office of broker. 
Amended by: 
VIII.1990.3.
81. Whosoever, without complying with the formalities
prescribed in article 79 or after forfeiting his office of public
broker, performs an act of brokerage, shall, on conviction by the
Court of Magistrates, be liable to the punishments established for
contraventions.
Books to be kept 
by brokers.
82. (1) Public brokers shall keep a memorandum or daybook
and a book of brokerages.
(2) The provisions of article 21 shall apply to such books.
Duties of brokers.
transaction, shall forthwith note it down in his memorandum or
day-book, and shall, day by day, enter every transaction in his book
of brokerages. He shall state in both such books, the date, the name
of the contracting parties, the nature of the transaction and,
generally, every stipulation and condition agreed upon by the
parties, and, in the case of merchandise, he shall particularly state
the quality, the quantity, the price and the marks, if any, and the
mode of payment.
Delivery of copies 
of entries.
84. The public broker shall, if so required by any of the
contracting parties, deliver a true copy signed by him, of the entry
made in the book of brokerages.
Production of 
books.
85. Public brokers shall, if so ordered by the court, produce
their books for the purpose of collating any copies delivered by
them to the parties, and shall give to the court, if necessary on oath,
all such explanations as may be required.
Custody of books.
Amended by:
XXIV.1995.362.
86. (1) Every public broker shall have the custody of his
books and shall keep them in good order.
(2) In the event of the death or interdiction of a public broker,
his books shall be deposited in the Civil Court, First Hall, by his
heirs or by any other person in whose possession they may be or by
himself, as the case may be, within fifteen days from the death or
interdiction.
(3) In default of such deposit, the registrar may take action for
the deposit of the books and may, where necessary, demand for
such purpose the issue of any requisite warrant against any person
whom he shall have reasonable grounds to believe to be in
possession of such books.
Exceptions. 
Amended by: 
XXXVII. 1939.11.
87. The provisions contained in articles 79, 80 and 81 shall not
apply to brokers employed in the selling or letting of immovables,
and the provisions contained in articles 79 to 86 shall not apply to
20               CAP. 13. ]               COMMERCIAL CODE
brokers employed in the selling of agricultural produce.
Broker cannot 
transact business 
for his own 
account, etc.
88. No public broker shall transact any commercial business for
his own account, or have any interest therein, either directly or
indirectly, in his own name or through the medium of a third party,
whether alone or in partnership with others; nor shall any public
broker lend his name for any transaction whatsoever to any person
not authorized to exercise the office of a public broker:
Provided that two or more public brokers may form a partnership
between them for the purpose of brokerage only.
Broker is not agent 
of parties.
89. A public broker is not the agent of the parties in concluding
any transaction; and if in concluding any transaction he acts as
agent of one of the parties, he shall not be entitled to the
commission as broker.
Non-disclosure of 
name of party by 
broker. 
90. (1) A public broker who does not disclose to one
contracting party the name of the other contracting party shall be
personally liable for the performance of the contract, and shall be
subrogated to the rights of the contracting party who has been paid
by him, as against the undisclosed contracting party.
(2) If the public broker discloses the name even after
concluding the business, the one party may directly sue the other
party, saving the public broker’s liability in case of non-
performance.
Penalty for 
contraventions 
committed by 
public brokers.  
Amended by: 
L.N. 46 of 1965; 
LVIII. 1974.68; 
XIII.1983.5; 
VIII.1990.3;
XXIV.1995.362.
91. (1) A public broker who acts in contravention of any of
the obligations mentioned in the foregoing articles shall, at the
instance of any interested party or of the Attorney General, be
liable to a penalty of not less than one lira and not exceeding
twenty liri on proceedings taken before the Civil Court, First Hall,
or the Court of Magistrates (Gozo) in its superior commercial
jurisdiction, as the case may be, saving any other action arising
from this or any other law.
(2) The court may, moreover, order the interdiction of the
public broker for a period not exceeding two years, in which case
the provisions of article 81 shall, during the time of interdiction, be
applicable.
Payment of 
broker ’ s fees.
92. Saving any agreement to the contrary, the fee for brokerage
is payable by the contracting parties in equal shares.
Rights of broker. 93. A   public broker shall in respect of the bargain which he has
negotiated be entitled to the brokerage fee, even though the
transaction be concluded between the parties without him, but
without the services of another public broker.
Apportionment of 
brokerage fee.
94. Where a public broker has commenced a transaction which
is afterwards concluded by another according to the terms
negotiated by the former, the brokerage fee shall be equally divided
between the two brokers; but if the transaction is concluded
otherwise than according to the terms negotiated by the former
broker, the whole brokerage fee is payable to the second broker.
   COMMERCIAL CODE       [ CAP. 13.             21
Non-applicability 
of ss.79-94 to 
brokers authorised 
under previous 
law.  
95. The provisions of articles 79 to 94 shall not apply to
brokers duly authorized to act as such before the first day of
January nineteen hundred and twenty-eight.
Sub-title VI
O F  C OMMISSION  M ERCHANTS
Definition of 
commission 
merchant.
96. A commission merchant is a person who transacts business
in his own name or under a firm name, for or on behalf of a
principal.
Commission 
merchant not 
bound to disclose 
principal ’ s name.
97. A   commission merchant is not bound to disclose the name
of the principal for whom he acts. He is directly liable to the person
with whom he deals, as if the transaction were his own.
Action by third 
party against 
principal or  vice-
versa.
98. The principal has no action against the person with whom
the commission merchant has contracted nor can such person
maintain an action against the principal.
Powers of 
commission 
merchant.
99. The commission merchant may deviate from the
instructions received from the principal if he is of opinion that the
latter would have given his approval had he known of the altered
conditions, and there has not been sufficient time to ask for and
obtain his previous assent.
Right of 
commission 
merchant in buying 
or selling stocks, 
etc.
100.   Where instructions are given for the buying or selling of
stocks, bills of exchange and other current securities or of goods
having an exchange or market value, the commission merchant,
unless the principal otherwise directs, may himself furnish at the
current price, as seller, the things he has to buy, or hold for himself
at the current price, as buyer, the things he has to sell on account of
the principal, saving his right to commission.
Liability of 
commission 
merchant.
101.   In the absence of agreement or usage to the contrary, a
commission merchant shall not be answerable for the performance
of the obligations assumed by the person with whom he has
contracted; and if he assumes such liability he is entitled to a
special commission, called a  del credere  commission which, in
default of agreement, is fixed by the custom of the place where the
authority is executed.
Prevailing usages.
to the usages prevailing in trade.
Acceptance of 
agency.
103. It shall be in the power of the commission merchant to
accept or decline the agency entrusted to him by the principal: 
 Provided that if he does not accept it, he shall, without any
delay, give notice of his refusal to the principal.
Relinquishment of 
agency.
104.   A commission merchant may relinquish the agency
already accepted by him where a just cause arises inducing him to
believe that the principal has not sufficient funds to meet his
obligations, in which case he shall, without any delay, give him
notice of his renunciation.
22               CAP. 13. ]               COMMERCIAL CODE
Lien or privilege in 
favour of 
commission 
merchant.
105.   A commission merchant who has made advances on goods
forwarded to him for sale on account of the principal has a lien or
privilege for the reimbursement of such advances and for interest
and expenses on the value of the goods if these are already at his
disposal in any warehouse or place of deposit, or if, before their
arrival, he is in a position to prove that the goods have been
forwarded to him.
Lien or privilege 
on goods bought 
on behalf of others.
106.   A commission merchant who has bought goods on behalf
of others has on such goods a like lien or privilege as mentioned in
the last preceding article for the reimbursement of the price paid or
to be paid by him, both if the goods are at his disposal in any
warehouse or place of deposit, as well as if, before the goods come
into the possession of the principal, he proves that he has forwarded
the same to the principal.
Lien or privilege 
on unaltered 
goods.
107.   The lien or privilege mentioned in the last preceding
article shall likewise attach, where the goods, although already in
the possession of the principal, have not undergone a substantial
alteration and can still be identified.
Priority of claim of 
commission 
merchant.
108.   A commission merchant to whom goods have been
forwarded or who has bought goods on behalf of a principal has,
even if such goods have been sold and delivered, a preferential
claim for reimbursement on the proceeds as against the creditors of
the principal, in respect of all advances made by him, and of
interest and expenses.
Lien on proceeds 
of goods.
109.   The lien or privilege mentioned in articles 105 and 108
may be enforced on the price of the goods if such price has not been
already paid or passed to account current as between the principal
and the buyer.
Title V
O F  C OMMERCIAL  O BLIGATIONS
When contract by 
correspondence is 
perfected.
110.   A   contract stipulated by means of correspondence,
whether by letter or telegram, between parties at a distance, is not
complete if the acceptance has not become known to the party
making the offer within the time fixed by him or within such time
as is ordinarily required for the exchange of the offer and the
acceptance, according to the nature of the contract and the usages
of trade generally.
Revocation of 
contract.
111. (1) Until the contract is complete, both the offer and the
acceptance may be revoked. If, however, the person making the
offer declares that he will keep it open till a certain time, or if a
time is implied by the nature of the contract, the revocation thereof
before the lapse of such time will not prevent the completion of the
contract.
(2) If the offer empowers, even impliedly, the other party to
carry out the contract without previously communicating his
acceptance, the contract is complete as soon as its execution has
   COMMERCIAL CODE       [ CAP. 13.             23
commenced within the customary or prescribed time.
Delayed 
acceptance, etc.
112.   A   delayed acceptance or an acceptance subject to
conditions, additions, restrictions or alterations shall be deemed to
be and shall count as a refusal of the original offer and as a new
offer.
Offer by means of 
advertisements.
113.   (1)  An   offer made to the public by means of catalogues
or other advertisements is not binding unless it has been expressly
declared to be so; it only amounts to an invitation to offer.
(2) The exhibition of goods constitutes an offer binding the
person exhibiting them if it is accompanied by an indication of the
price and all other conditions of the sale.
Where parties 
agree to reduce 
verbal agreement 
to writing.
114.   Where the parties have agreed that the verbal agreement
should be reduced to writing it is presumed that they desire to
subject the validity thereof to the observance of such formality.
Co-debtors jointly 
and severally 
liable.
115. (1) In commercial obligations, co-debtors are, saving any
stipulation to the contrary, presumed to be jointly and severally
liable.
(2) The same presumption shall extend to a surety, even if not a
trader, who guarantees a commercial obligation.
Payment.
tender in Malta and the exchange thereof is not stated, payment
may be made in the money of the country according to the rate of
exchange at sight at the due date and at the place fixed for the
performance of the obligation, and, if there is not at such place a
course of exchange, according to the rate of exchange in the nearest
market, unless the clause "in cash" or an equivalent clause is
contained in the contract.
Implied resolutive 
condition.  
Amended by: 
XXII.1976.4.
Cap. 16.
117. In commercial contracts, the implied resolutive condition
referred to in article 1068 of the Civil Code produces the
dissolution of the contract  ipso jure ,   and it shall not be lawful for
the court to grant to the defendant a time for clearing the delay:
Provided that this article shall not apply to contracts of letting of
immovable property or to contracts of emphyteusis or to contracts
the dissolution whereof, in the event of failure by one of the parties
to fulfil his engagements, is specially regulated by law.
Litigious rights 
arising from 
commercial 
transactions.  
Cap. 16.
118.   The right competent to a debtor under article 1483 of the
Civil Code, in the case of assignment of a litigious right, cannot be
exercised where the litigious right so assigned arises from a
commercial transaction.
24               CAP. 13. ]               COMMERCIAL CODE
Title VI
Provisions of this 
Title substituted by 
Act XXX of 1927.
O F THE  C HAMBER OF  C OMMERCE
Chamber of 
Commerce.
119. (1) The Chamber of Commerce is a body composed of
traders, brokers, master-mariners and all other persons engaged in
trade.
(2) It is recognized by the Government.
Council of the 
Chamber of 
Commerce.  
Amended by: 
XVIII.1944.2.
120. (1) The said Chamber shall each year appoint, in terms of
the statute approved by the said Chamber, a committee composed
of members of the Chamber of Commerce for regulating its affairs.
The persons composing the said committee shall constitute the
Council of the Chamber of Commerce and their names shall be
published in the Government Gazette.
(2) The said Council shall represent the mercantile community
of Malta.
Seat of Chamber of 
Commerce.  
Amended by: 
XXXIII.1990.38.
121.   The Chamber of Commerce has its seat in Valletta in the
building of the Chamber of Commerce.
Transactions 
carried out in 
Exchange.
122.   Repealed by: XXXIII. 1990.38.
Title VII
O F  B ILLS OF  E XCHANGE,  P ROMISSORY  N OTES, AND  D RAFTS OR 
C HEQUES ON  B ANKERS OR  C ASHIERS
Sub-title I
O F  B ILLS OF  E XCHANGE
O F THE  F ORM OF A  B ILL OF  E XCHANGE
Form of bill of 
exchange.
123.  A bill of exchange must be dated, and must specify the
place where it is drawn, the sum to be paid, the name of the person
who is to pay, and the name of the person to whom or to whose
order payment is to be made, the time and place of payment, and
the value given, whether in cash, in goods, in account, or in any
other manner; and must be signed by the drawer.
Drawer and drawee 
may be the same 
person.
124.  A bill of exchange can be drawn by a person upon himself,
and can be made payable at the same place where it is drawn.
Nullity of bill of 
exchange.
125.   A bill of exchange signed by means of a cross or any other
mark is null.
Discrepancy  
between words and 
figures.
126. (1) Where in a bill of exchange the sum payable is
expressed in words and also in figures, and there is a discrepancy
between the two, the sum denoted by the words is the amount
   COMMERCIAL CODE       [ CAP. 13.             25
payable.
(2) Where the amount is repeatedly expressed in figures or in
words, and there is a discrepancy, the smaller amount is the amount
payable.
May be drawn to 
order or drawer or 
third party.
127.   A bill of exchange may be drawn to the order of a third
party, or to the order of the drawer himself.
May be drawn on a 
person and made 
payable at 
residence of third 
party.
128. (1) A bill of exchange may be drawn on a person, and
made payable at the place of residence of a third party.
(2) It may be drawn by order and for account of a third party.
Bill in a set.
the set containing a reference thereto by the words  first ,  second ,
third ,   etc., in which case each part is equivalent to the whole of the
parts, and the whole of the parts constitutes one bill.
(2) In the absence of such reference, each part shall be deemed
to be a separate bill.
O F THE  D UTIES OF THE  D RAWER
Several parts may 
be required.
130.   The drawer must deliver to the payee, if the latter so
requires, before the bill becomes due, more than one part of the
bill.
Supply of funds to 
meet bill.
131. (1) The drawer, or, where a bill is drawn for account of
another party, the party for whose account the bill has been drawn,
engages that at the time when the bill becomes due there shall be on
his account in the hands of the drawee a supply of funds sufficient
for the payment of the bill, even if such bill is payable at the place
of residence of a third party.
(2) Nevertheless, the drawer for account of another person
remains personally liable towards the payee, the endorsers, and the
holder of the bill.
When drawee is 
deemed to have 
been put in funds.
132.   The drawee shall be deemed to have been put in funds if,
at the time the bill becomes due, he owes a debt to the drawer, or to
the party for whose account the bill was drawn, in an amount not
less than that specified in the bill.
Acceptance 
implies supply of 
funds.
133. (1) An acceptance implies the supply of funds, and
constitutes a proof thereof as regards the holders and the endorsers.
(2) The drawer alone, whether the bill be accepted or not, is
bound to prove, in case of dispute, that the persons on whom the
bill was drawn were provided with the necessary funds for the
payment of the bill at maturity; otherwise he is bound to warrant
the bill, even though the protest is made after the lapse of the
prescribed times.
Protested bills.
26               CAP. 13. ]               COMMERCIAL CODE
no case, be entitled to the funds supplied by the drawer or by the
person for whose account the bill was drawn.
(2) If the bill has not been accepted, the funds supplied shall, in
case of bankruptcy of the party supplying them, revert to his estate. 
(3) If the bill has been accepted, the funds supplied shall
remain with the acceptor, subject to his obligation of paying the
holder of the bill.
When drawer 
prohibits transfer 
of bill.
135.   When the drawer has prohibited the transfer of a bill by an
express declaration on the bill itself, and this notwithstanding a
transfer is made, the endorsee acquires no rights other than those of
the payee.
O F  E NDORSEMENT
Transfer by 
endorsement.
136.   The holder of a bill can transfer the property in it by
endorsement.
To whom a bill 
may be endorsed.
137.  A bill of exchange may be endorsed to the drawee, to the
acceptor, to a prior endorser, or even back to the drawer, and may
be further endorsed by each and all of them.
Where 
endorsement is 
made.
138.   The endorsement is made on the back of the bill, or on a
slip of paper called an  allonge  which, when necessary, is attached
to the bill itself.
Endorsement may 
be special or in 
blank.
139.   An endorsement may be made by specifying the name of
the person to whom, or to whose order the bill is to be payable, the
date of the endorsement, and other particulars; it may also be made
in blank by the mere signature of the endorser.
Liability of 
endorser.
140. (1) The endorser is liable to every succeeding holder for
the acceptance and payment of the bill.
Qualified 
endorsement.
(2) Nevertheless, where the endorsement is qualified by the
words "without recourse" or by some other form of words implying
a like qualification, the endorser who has so qualified the
endorsement is exempted from all liability on his endorsement.
Endorser 
prohibiting transfer 
not liable to 
succeeding 
endorsees.
141.   Where an endorser has in his endorsement expressly
prohibited any further transfer of the bill, the parties to whom such
bill is subsequently endorsed have no right of recourse against such
endorser.
Effect of restrictive 
endorsement.
142.   Where the endorsement is made with the order "for
collection" or any other expression implying an order by the
endorser, such endorsement does not pass the property in the bill,
but merely transmits to the endorsee the order therein contained,
and in such case the endorsee can only transmit to other parties the
same order by a similar endorsement.
   COMMERCIAL CODE       [ CAP. 13.             27
Where 
endorsement is 
made after lapse of 
time for protest for 
non-payment or 
non-acceptance.
143. (1) Where the endorsement is made after the expiration of
the time within which the protest for non-payment is to be made,
the endorsee acquires, as against the drawee, all the rights arising
from the acceptance already made, and the rights of recourse
against such parties as shall have endorsed the bill after the lapse of
the said time.
(2) The provisions of this article shall also apply where the
endorsement is made after the expiration of the time within which
the protest for non-acceptance is to be made.
Rights of endorsee 
where endorsement 
is made after 
protest for non-
payment. 
144.   Where the endorsement is made after the bill has been
protested for non-payment, such endorsement shall not vest in the
endorsee any rights other than those competent to his endorser
against the drawee, if the drawee has accepted the bill, and against
such endorsers as may be still liable on the bill.
Rights of endorsee 
against drawer.
145.   In the cases referred to in the last two preceding articles,
the endorsee maintains unimpaired his rights against the drawer,
and against the person for whose account the bill was drawn.
Where endorser 
specifies time for 
presentment of bill.
146.   Where the endorser has in his endorsement specified the
time for the presentment of the bill to the drawee, the liability
created by the endorsement ceases, if the bill is not presented for
acceptance within the time so specified.
Rights of holder 
where bill is not 
endorsed to him. 
147.   The mere possession of a bill of exchange not endorsed to
the holder entitles the holder to present such bill for acceptance,
and to protest it for non-acceptance.
O F  A CCEPTANCE
Form of 
acceptance.
148.   The acceptance of a bill of exchange must be made on the
bill itself by the signature of the acceptor, with or without the
words "I accept" or "accepted".
When acceptance 
is to be dated.
149.   The acceptance must be dated, if the bill is payable at a
certain period after sight or at usance. The omission of the date of
acceptance renders the bill payable at the time specified in the bill,
such time to run from the date of such bill.
Acceptance cannot 
be conditional, but 
may be partial.
150. (1) An acceptance cannot be conditional, but it may be
partial as to the amount to be paid.
(2) A conditional acceptance shall be deemed to be a refusal to
accept.
When bill is to be 
accepted.
151. (1) A bill of exchange shall be accepted on presentment,
or at the latest within twenty-four hours after presentment.
(2) Where, after the expiration of the said time, the bill is not
re-delivered, accepted or unaccepted, the party who retained the
bill shall be liable in damages and interest to the holder.
Obligations of 
acceptor.
152. (1) The acceptor of a bill by accepting it engages that he
will pay the amount thereof, and cannot be relieved from such
28               CAP. 13. ]               COMMERCIAL CODE
engagement, even though the drawer, or the party for whose
account the bill was accepted, may, without his knowledge, have
become bankrupt previously to the acceptance of the bill.
(2) Nevertheless, when the acceptor has not been put in funds,
he may resort to the drawer or to the party for whose account the
bill was accepted; in any such case the acceptance raises only a
rebuttable presumption against the acceptor, who shall have the
right to prove the contrary.
Protest for non-
acceptance.
153. (1)  A refusal to accept shall be proved by means of a
protest termed protest for non-acceptance.
(2) Where the bill is not accepted for the whole amount for
which it is drawn, a protest for non-acceptance of the balance shall
be made.
Duty of drawer and 
endorsers upon 
notification of 
protest for non-
acceptance.
154.   Upon notification of the protest mentioned in the last
preceding article, the endorsers and the drawer are respectively
bound to give sufficient security for the payment at maturity of the
amount of the bill or of the amount for which it was not accepted,
or to pay the bill together with the expenses of protest and of re-
exchange.
Where acceptor ’ s 
condition changes 
after acceptance of 
bill.
155.   Where, after the acceptance of the bill, it is proved that the
acceptor’s condition, with regard to his commercial affairs, has so
changed as to give rise to a reasonable fear that the bill will not be
paid at maturity, it shall be lawful to demand against the drawer,
the endorsers, and even against the acceptor himself, the same
security as that mentioned in the last preceding article.
Obligation of 
surety.
156.   A person who stands surety for one only of the parties
bound to give security, shall be jointly and severally liable only
with the party for whom he stands surety.
Promise to accept 
bill.
157.   A   promise to accept a bill of exchange does not amount to
an acceptance, but the promisee may maintain an action for
damages and interest against the promisor if the latter refuses to
perform the promise.
O F  A CCEPTANCE FOR  H ONOUR OR BY  I NTERVENTION
Acceptance for 
honour or by 
intervention.
158. (1) Where a bill of exchange is protested for non-
acceptance, any person, not being a party already liable thereon,
may intervene and accept the bill for the honour of the drawer, or of
one of the endorsers, with or without an order to that effect from
such drawer or endorser.
(2) The drawee himself may, after the protest for non-
acceptance, intervene as stranger as aforesaid.
Order of 
preference where 
several persons 
offer to accept for 
honour.
159. Where several persons offer to accept for honour, the
following shall have the preferences:
( a ) those who intervene for the drawer or for the party for
   COMMERCIAL CODE       [ CAP. 13.             29
whose account the bill is drawn;
( b ) those who intervene for the endorsers according to the
order of the endorsements.
Option of holder.
one and the same party, the holder of the bill may choose any one
of them.
Preference to be 
given to party 
instructed to 
intervene.
161.   Nevertheless, the party instructed to intervene by the
person for whom he offers to accept shall, in all cases, have the
preference over those who offer to accept for the same person,
without such instructions.
Holder of bill may 
accept for honour.
162.   The holder of a bill of exchange may, as any other person,
accept by intervention, and he may, in like circumstances, give the
preference to himself.
Acceptance for 
honour how made.
163.   An acceptance for honour must be written on the bill and
be signed by the acceptor for honour, and mention thereof shall be
made in the act of protest or in a subsequent act forming an
extension thereof or appended thereto.
Duties of   acceptor 
for honour.
164.   The acceptor for honour shall cause the protest for non-
acceptance to be delivered to him, and shall, without delay, give
notice of his intervention to the party for whose honour he has
intervened, and communicate to such party the said protest: in
default, he shall be liable in damages and interest.
Where acceptor for 
honour does not 
state for whom he 
intervenes.
165.   Where the acceptor for honour does not state for whose
honour he intervenes, the acceptance shall be deemed to be made
for the honour of the drawer, or of the party for whose account the
bill is drawn, if the name of such party appears on the bill.
Rights of holder in 
case of acceptance 
for honour.
166. (1) Notwithstanding any acceptance for honour, the
holder of a bill maintains unimpaired all such rights as are
competent to him against the drawer and the endorsers for want of
acceptance by the drawee.
(2) Nevertheless, where a reference in case of need has been
inserted in the bill by the drawer himself, and the bill is accepted
by the referee in case of need, the security mentioned in article 154
shall not be competent.
Bill accepted for 
honour to be 
presented for 
payment to original 
drawee.
167. (1) A bill accepted for honour must be presented to the
original drawee for payment at the time it falls due, and be
protested against him in case of non-payment.
(2) In default of such protest, the acceptor for honour shall not
be bound to pay the bill, and if he pays the bill notwithstanding
such default, he shall lose his right of recourse against such parties
as may have had an interest that the bill be protested against the
drawee.
30               CAP. 13. ]               COMMERCIAL CODE
O F  J OINT AND  S EVERAL  L IABILITY
Parties to a bill 
jointly and 
severally liable.
168.   All parties who have signed, accepted, or endorsed a bill,
are jointly and severally liable for warranty to the holder.
O F  S URETY  PAR AVAL
Aval. 169.   Independently of the acceptance and endorsement, the
payment of a bill of exchange can be guaranteed by an  aval , which
is an obligation of a third party.
How  aval  is given. 170.   Aval  can be given on the bill itself, or by a separate act, or
even by letter.
Liability of party 
giving  aval.
171.   The party giving the  aval  is liable jointly and severally,
and in the same manner as the drawer and the endorsers, unless the
parties have agreed otherwise.
O F  M ATURITY AND  P AYMENT
Time of payment. 172. A bill may be expressed to be payable -
( a ) at sight;
( b ) at a certain time or on a certain day; 
( c ) at a certain time after sight;
( d ) at a certain time after date; 
( e ) at usance.
At sight. 173.  A bill expressed to be payable at sight is payable on
presentment.
At a certain time or 
on a certain day.
174.   A bill expressed to be payable at a certain time or on a
certain day is payable at the time or on the day expressed therein.
Bill payable in the 
middle of the 
month.
175.   Where a bill is expressed to be payable in the middle of a
certain month, the bill shall be deemed to become due on the
fifteenth day of that month.
Bill payable at a 
certain time after 
sight, or after date.
176.   A bill expressed to be payable at a certain time after
sight, or at a certain time after date, is payable -
( a ) if the time is stated in days, on the last day thereof:
provided that in the case of a bill expressed to be
payable at a certain time after sight, the day on which
the bill was presented for acceptance shall not be
reckoned, and in the case of a bill expressed to be
payable at a certain time after date, the day of the date
of the bill shall not be reckoned;
( b ) if the time is stated in weeks or months, on the day of
the week or month which corresponds, in name or
   COMMERCIAL CODE       [ CAP. 13.             31
number, with the day on which the bill was presented
for acceptance or with the day of the date of the bill:
 Provided that where there is no such date in the
month of payment, the bill shall be deemed to fall due
on the last day of such month.
Half a month.
equivalent to fifteen days.
Gregorian 
calendar.
178.  The months are reckoned according to the Gregorian
calendar.
Bill payable at 
usance.
179.   A bill expressed to be payable at usance is payable at
twenty-one days from the day on which the bill was presented for
acceptance.
Where no time is 
expressed, bill is 
payable at sight.
180.  In the absence of any of the indications mentioned in
article 172, the bill shall be payable at sight.
When day of 
maturity is a 
Sunday, etc. 
Amended by: 
V.1904.8.
181.   If the day on which a bill becomes due falls on a Sunday
or on a Holy day of obligation or on Good Friday or on any other
public holiday, the bill shall be payable on the day next following,
not being a public holiday.
Where drawee is 
adjudged bankrupt.
182.   A bill shall be deemed to be due from the moment the
drawee is adjudged bankrupt, and in such case the holder may
protest the bill as provided in article 191; but the drawer and the
endorsers may, if called upon to pay the bill, postpone payment
until the day on which the bill shall be due according to the terms in
which it is drawn, on giving the security mentioned in article 154.
In what money bill 
is payable. 
183.  A bill of exchange must be paid in the money specified
therein. Nevertheless, if the money specified in the bill is fictitious
or is not legal tender in the place where payment is to be made, and
the value thereof has not been stated in the bill, the payment shall
be made in the money which is legal tender at the place of payment,
in an amount corresponding to the value of the money specified in
the bill at the time of maturity, unless the drawer, by the use of the
clause "in cash" or other equivalent clause, shall have expressly
required payment to be made in the money specified by him, not
being fictitious money.
Payer not bound to 
verify genuineness 
of endorsements.
184.   The payer of a bill is not bound to verify the genuineness
of the endorsements.
Anticipated 
payment.
185.   A party paying a bill before it becomes due shall be
answerable for the validity of the payment.
Payment at 
maturity without 
opposition operates 
as valid discharge.
186.   A party paying a bill at maturity, and without any
opposition, shall be deemed to be lawfully discharged.
Holder cannot be 
compelled to 
receive anticipated 
payment.
187.   The holder of a bill cannot be compelled to receive
payment thereof before it becomes due.
Payment of part of 
a bill drawn in sets.
188.   The payment of a bill on a second, third, or other part,
shall be valid, provided it is specified on such second, third, or
other part, that such payment annuls the effect of the other parts of
32               CAP. 13. ]               COMMERCIAL CODE
the bill.
Where accepted 
part is not taken 
back by payer.
189.   A party paying a bill on a second, third, or other part,
without taking back the part which he has accepted, shall not be
discharged with respect to a third party in possession of the
accepted part, saving his right of recourse against the party to
whom payment was unduly made.
Where several 
parts are accepted.
190.   Where a bill is drawn in a set consisting of a first, second,
third, or other part, and the drawee has accepted more than one
part, he is bound to pay all the accepted parts which shall be
presented to him at maturity by the different holders thereof, saving
his right of recourse against the person who made use of more than
one of the parts of the bill.
Protest for non-
payment.
191.   A   refusal of payment of a bill shall be proved by means of
a protest termed protest for non-payment.
Payment of bill not 
endorsed to holder.
192.   A person who claims the payment of a bill which has not
been endorsed to him, but who, at the same time, proves that the
bill was remitted to him to receive payment thereof, may, upon
giving sufficient security, demand payment of the bill, and protest
it in case of non-payment.
Liability of holder 
obtaining payment 
of bill.
193.   The holder of a bill who receives payment thereof, and all
prior endorsers shall be liable to the party paying the bill, as
guarantors of the validity of all antecedent endorsements.
Payment to be 
made against 
delivery of bill.
194.   Saving the case referred to in articles 201 and 202, the
party liable for the payment of the bill is not bound to effect
payment thereof except against the delivery of the bill duly
discharged.
Part-payment. 195. (1) The holder of a bill cannot refuse to receive from the
drawee part-payment thereof, even though the bill may have been
accepted by the drawee himself, or by any other party, for the
whole amount, but the holder must protest it for the balance.
(2) The party making such part-payment cannot, however,
claim that the bill be delivered up to him, but can only demand that
the amount paid be endorsed upon the bill, and that a copy of the
bill with the discharge of the amount paid, be given to him.
Where bill is not 
presented for 
payment.  Amended 
by: 
L.N. 148 of 1975;
XXIV.1995.362.
196. If a bill is not presented for payment at the time it becomes
due, the acceptor may, after the expiration of the time within which
protest for non-payment is to be made, lodge the amount of the bill
in the Civil Court, First Hall, at the expense and risk of the holder.
Pleas personal to 
endorsers.
197. Pleas which are personal to the endorsers may not be set up
against the holder of a bill.
Pleas personal to 
holder.
198. (1) Pleas which are personal to the holder of a bill cannot
delay the payment thereof, unless the pleas are such as can be
conveniently and speedily disposed of in the pending action.
(2) Where such pleas require a prolonged enquiry, the
examination thereof shall be referred to an independent action and,
meanwhile, the judgment ordering the payment of the bill, with or
without security, as the court shall deem fit, shall not be delayed.
   COMMERCIAL CODE       [ CAP. 13.             33
Opposition to 
payment of bill.
199.   No opposition to the payment of a bill shall be allowed
except in case of loss of the bill or bankruptcy of the holder. 
Loss of non-
accepted bill.
200.   In case of loss of a non-accepted bill, the party to whom
such bill belongs may demand the payment thereof upon a second,
third, fourth, or other part.
Loss of accepted 
bill.
201.   Where the lost bill is an accepted bill, payment cannot be
claimed upon the second, third, fourth, or other part, unless the
party claiming payment duly proves his title thereto and gives
sufficient security.
Where holder is 
unable to present 
any part of the bill.
202.   Where the party who has lost the bill, whether accepted or
not, is unable to present a second, third, fourth, or other part
thereof, he can nevertheless demand and obtain payment, if he duly
proves his title thereto and gives sufficient security.
Extinguishment of 
obligation arising 
from security.
203.   The obligation arising from the security mentioned in the
last two preceding articles shall be extinguished after the lapse of
three years.
When deposit of 
amount of lost bill 
may be demanded. 
Amended by: 
L.N. 148 of 1975;
XXIV.1995.362. 
204.   In the absence of the security referred to in articles 201
and 202, it shall be lawful, on furnishing the proof of title required
in those articles, to demand that the amount due on the lost bill be
lodged in the Civil Court, First Hall.
Deed of protest in 
case of a lost bill.
205.   In case of non-payment on a demand to that effect in
accordance with the provisions of articles 201 and 202, the owner
of the lost bill shall, in order to preserve all his rights, cause a deed
of protest to be drawn up, and to be notified to the drawer and the
endorsers, within the time and in the manner hereinafter prescribed
with regard to the protest for non-payment.
Liability of 
immediate 
endorser to holder 
endorsee of lost 
bill.
206.   The owner of a lost bill, in order to obtain the second,
third, or other part thereof, shall apply to his immediate endorser,
and such endorser shall be bound to give his assistance to, and
allow the said owner to proceed in his name against his own
endorser, and so on from one endorser to another up to the drawer
of the bill.
Owner of lost bill 
liable for expenses.
207.   The owner of the lost bill shall bear all the expenses
resulting from the loss.
Liability for 
damages in case of 
refusal to give 
second, third, or 
other part.
208.   Where a party refuses to give a second, third, or other part,
upon being required so to do under article 206, he shall be liable in
damages and interest.
O F  P AYMENT FOR  H ONOUR OR BY  I NTERVENTION
Payment for 
honour.
209.   Where a bill of exchange has been protested for non-
payment, any person may intervene and pay it  supra   protest  for the
honour of the drawer or any of the endorsers.
How recorded.
protest or in a separate act, forming an extension thereof or
appended thereto.
34               CAP. 13. ]               COMMERCIAL CODE
Rights and duties 
of payer for 
honour.
211. (1) A party paying a bill of exchange  supra   protest
succeeds to the rights of the holder, and also to his duties with
regard to the formalities to be observed.
(2) Moreover, he must give immediate notice of the payment to
the party for whose honour he has intervened, under penalty of
damages and interest.
Discharge of 
endorsers.
212. (1) Where payment  supra protest  is made for the honour
of the drawer, all the endorsers shall be discharged.
(2) Where the payment is made for the honour of a particular
endorser, all subsequent endorsers shall be discharged.
Where two or more 
persons offer to 
pay  supra protest.
213.   Where two or more persons offer to pay a bill  supra
protest ,   the rules in regard to acceptance by intervention shall
apply.
Preference to be 
given to drawee.
214.   Nevertheless, where the original drawee, against whom
the protest for non-acceptance was made, is willing to pay the bill
at the time it becomes due, he shall have preference over all the
parties who offer to pay the bill by intervention.
Rights of acceptor 
by intervention 
where bill is paid 
by others.
215.   An acceptor by intervention, who does not pay the bill
because it is paid by the drawee or any other party, is entitled to
recover from the payer the expenses which he has incurred, and a
commission of one-third  per centum .
When payer for 
honour forfeits 
right of recourse.
216.   The payer for honour, where another party, having
preference over him, has offered to pay the bill, shall have no right
of recourse against such endorsers as would have been discharged
by the payment if made by such other party.
Bill and protest to 
be delivered up to 
payer for honour.
217.   The payer for honour is entitled to the delivery up of the
bill itself and the protest for non-payment, and he is bound to
refund the expenses of the protest.
O F THE  R IGHTS AND  D UTIES OF THE  H OLDER
Holder to present 
bill for payment or 
for acceptance.
218. The holder of a bill of exchange payable in Malta at sight,
or at a certain time after sight, or at usance, is bound to present it
for payment or for acceptance, within the times prescribed in the
next following article, to be reckoned from the date of the bill,
under penalty of forfeiting his right of recourse against the
endorsers, and even against the drawer, if the latter has provided
funds to meet the bill.
Times within 
which presentment 
is to be made.
219. The times referred to in the last preceding article are- 
( a ) six months, if the bill is drawn at a place in Europe,
Asia Minor, Syria, Egypt, Tripoli, Tunis, Algiers or
Morocco;
( b ) one year, if the bill is drawn at any other place;
( c ) one month, if the bill is drawn and made payable in
Malta:
   COMMERCIAL CODE       [ CAP. 13.             35
Provided that in time of maritime war, the times mentioned in
paragraphs   ( a ) and ( b )   shall be doubled.
Bill payable 
outside Malta.
220.   The same forfeiture mentioned in article 218 shall be
incurred by the holder of a bill drawn in Malta, and payable,
whether at sight, or at a certain time after sight, or at usance, in any
of the countries mentioned in the last preceding article, if the
holder shall not present it for payment or acceptance within the
times stated in that article.
Certain bills need 
not be presented 
for acceptance.
221.   The holder of a bill drawn at a certain time or at a certain
day, or at a certain time after date, is not bound to present the bill
for acceptance, but if he elects to present it, he is bound to protest it
in case of non-acceptance.
Where drawer or 
endorsers give 
different 
directions.
222.   The provisions contained in articles 218, 220 and 221 shall
not apply to such drawer or endorser as may have lawfully given
different directions.
Presentment for 
payment to be 
made at maturity.
223.   The holder of a bill shall present it for payment on the day
it falls due.
Place at which 
presentment, 
protest, etc., are to 
be made. 
224.  The presentment of a bill for acceptance or payment, the
protest, the request for a duplicate of the bill, as well as all other
acts against a particular party with regard to a bill, shall be made at
such party’s place of business or otherwise at his residence.
Acceptance not 
demandable on 
Sundays, etc. 
Amended by: 
V.1904.9.
225. (1) The holder of a bill cannot demand the acceptance
thereof, or the delivery of a duplicate, or the performance of any
other act relating thereto, except on a day not being a public
holiday.
(2) If the last day on which the performance of any of such acts
was demandable falls on a Sunday, or on a Holy day of obligation,
or on Good Friday, or on any other public holiday, the performance
shall be demanded on the next following day, not being a public
holiday.
(3) The provisions of this article shall also apply to the protest. 
When protest is to 
be made.
226. (1) The protest for non-acceptance shall be made on the
day next succeeding that on which the bill was presented for
acceptance.
(2) The protest for non-payment shall be made on the day next
succeeding that on which the bill becomes due.
Protest for non-
acceptance, etc., 
does not excuse 
holder from 
making protest for 
non-payment.
227. (1) The protest for non-acceptance, or the death or
bankruptcy of the party on whom the bill is drawn, shall not excuse
the holder from protesting the bill in case of non-payment.
(2) Where the acceptor becomes bankrupt before the bill falls
due, the holder may protest the bill and exercise his right of
recourse.
36               CAP. 13. ]               COMMERCIAL CODE
Holder to demand 
acceptance from 
party named in the 
bill in case of 
refusal of drawee 
to accept same.
228.  Where a party is named in the bill for the purpose of
accepting or of paying it by intervention, and the drawee refuses to
accept the bill, the holder shall, after protesting the bill against the
drawee, present it for acceptance by the party named in the bill.
Holder to demand 
payment from 
acceptor for 
honour, etc., in 
case of refusal of 
drawee to pay the 
bill.
229.   Where the party on whom the bill was drawn refuses to
pay it, the holder shall, after protesting the bill against him, present
it for payment to the acceptor for honour, and, in case of refusal by
the latter, to any other party named in the bill for the acceptance or
payment thereof in case of need.
Refusal of acceptor 
for honour, etc., to 
be recorded in or 
after protest.
230.   The refusal, whether to accept or to pay, by any of the
parties referred to in the last two preceding articles, shall be
mentioned in the act of protest against the drawee or subsequently
thereto.
Holder cannot 
refuse acceptance 
or payment for 
honour.
231. (1) The holder of a bill which has been protested for non-
acceptance or non-payment cannot refuse the acceptance or
payment offered by a party intervening for the honour of the drawer
or any of the endorsers.
(2) Nevertheless, any such acceptance for honour shall not
operate so as to bar the holder from demanding the security
mentioned in article 154.
Retour sans protêt. 232.  A request or direction contained in a bill that it shall be
returned without protest ( retour sans protêt ),   excuses the holder
from the obligation of protesting the bill, but shall not excuse him
from the obligation of presenting the bill in due time.
Notice of non-
acceptance and of 
non-payment.
233. (1) The holder of a bill protested for non-acceptance or
non-payment shall, without delay, give notice thereof in writing to
the endorser immediately preceding him.
(2) Every endorser on receiving such notice shall, without
delay, communicate it to the endorser immediately preceding him.
(3) The notice referred to in this article shall be accompanied
by the protest.
Where address of 
endorser is not 
stated in 
endorsement.
234.   Where a party has endorsed a bill to another party without
stating his address, notice of non-acceptance or non-payment shall
be given to the endorser next preceding him.
When holder loses 
his right of 
recourse.
235. It shall not be competent to the holder of a bill, in case of
non-payment, to exercise his right of recourse against the drawer or
the endorsers -
( a ) if the bill was not presented for acceptance, where
necessary, or for payment, to the drawee or the parties
mentioned in articles 228 and 229;
( b ) if the holder has refused acceptance or payment by a
party intervening for the honour of the drawer or of
any of the endorsers.
Other cases in 
which holder loses 
his right of 
recourse.
236.   Nor shall it be competent to the holder to exercise his right
of recourse against the endorsers or the drawer who has supplied
funds to the drawee or to the parties mentioned in articles 228 and
   COMMERCIAL CODE       [ CAP. 13.             37
229, if he has failed to comply with the provisions of articles 226,
230 and 233.
How right of 
recourse may be 
exercised.
237.  The holder of a bill protested for non-payment may
exercise his right of recourse against all the obligors jointly, or
against only one or some of them, without forfeiting his right of
recourse against the others not sued on the bill, and he shall not be
bound to follow the order of the endorsements.
Times within 
which right of 
recourse against 
endorsers and 
drawers resident in 
Malta is to be 
exercised.
238. The right of recourse against endorsers and drawers
residing in Malta, in the case of bills, protested for non-payment,
drawn in Malta and payable elsewhere, shall be exercised within -
( a ) twelve months, if the bill was payable at a place in
Europe, Asia Minor, Syria, Egypt, Tripoli, Tunis,
Algiers or Morocco;
( b ) eighteen months, if the bill was payable in any other
country:
Provided that such times shall be doubled in time of maritime
war.
Running of times.
commence to run -
( a ) with regard to the holder of the bill, from the date of
the protest for non-payment;
( b ) with regard to each endorser, from the day on which
the payment was demanded from him, if he pays
voluntarily, or, otherwise, from the day on which a
judicial demand for payment was made against him.
Right of recourse 
bared by lapse of 
time.
240.   After the expiration of the times specified in the last two
preceding articles, the holder and the endorsers of the bill shall lose
their right of recourse.
Where one or more 
of the parties liable 
on the bill are 
bankrupt.
241. (1) In case of bankruptcy of one or more of the parties
liable on a protested bill, the holder thereof may put forward his
claim for the satisfaction of the whole debt against the estate of
each of the bankrupts.
(2) Where a dividend is received from the estate of one of the
bankrupts, the parties liable on the bill, who are not bankrupts, as
well as the estates of the other bankrupts, shall be only discharged
to the extent of the dividend so received.
Where holder 
accepts voluntary 
arrangement.
242. (1) Nevertheless, where the holder of a bill accepts a
voluntary arrangement with the drawer or the acceptor, he shall
lose his right of recourse against all the endorsers.
(2) Where the arrangement is made with one of the endorsers,
the holder loses his right of recourse against all the subsequent
endorsers, but preserves his rights against the acceptor. He
preserves his rights also against the prior endorsers and the drawer,
unless such endorsers or drawer prove that they have been
prejudiced by such arrangement and provided the holder has
expressly reserved his rights against them.
(3) Where the arrangement is made with the drawer, the
38               CAP. 13. ]               COMMERCIAL CODE
acceptor, if he has not been put in funds, shall be entirely
discharged.
(4) Finally, where the arrangement is voluntarily made with the
acceptor, and such acceptor has been put in funds, the holder loses
his right of recourse against the drawer.
When right of 
recourse revives.
243.   The right of recourse shall revive in favour of the holder
against the drawer or endorser who, after the expiration of the times
prescribed for the protest, the notice, and the exercise of the
aforesaid right, has received on account, or by way of
compensation, or in any other manner, the funds assigned for the
payment of the bill.
Payer entitled to 
have bill delivered 
up to him.
244.   Any party liable on a bill of exchange shall, on paying the
amount thereof, together with the interest and incidental expenses,
be entitled to have the bill, duly discharged, delivered up to him.
Acceptance and 
endorsements 
operative even if 
signature of drawer 
is forged.
245.   The acceptance and the endorsements, if genuine, shall
continue to be effectual, even if the signature of the drawer is
forged or fraudulently altered.
Where bill contains 
forged acceptance 
or endorsement.
246.   If a bill contains a forged acceptance or endorsement, or
an acceptance or endorsement fraudulently altered, all the
endorsers and the drawer, whose signatures are genuine, shall
continue to be liable on such bill.
O F  P ROTEST
Protest to be drawn 
up by a notary 
public.
247.   Protests for non-acceptance or non-payment shall be
drawn up by a notary public, who shall go to the place of business
or residence of the party bound to accept or to pay, and request him
to accept the bill or to pay the amount thereof.
Form of protest. 248. (1) The act of protest must contain a  verbatim  copy of the
bill, of the acceptance, if the bill had been already accepted, of the
endorsements, and of the instructions given therein, and must
specify -
( a ) the name of the person in whose favour the protest is
made;
( b ) the demand to accept or to pay made to the party
against whom the protest is made;
( c ) the fact whether the party bound to accept or to pay
was present or absent;
( d ) the reason of the refusal to accept or to pay;
( e ) the date on which the demand was made or
unsuccessfully attempted.
(2) In case of acceptance or payment for honour, the protest
shall specify by whom, for whose honour, and in what manner the
bill has been accepted or paid.
   COMMERCIAL CODE       [ CAP. 13.             39
Ineffectual 
inquiries to be 
noted. 
249.   Where the notary has not been able to find the party bound
to accept or to pay, or to ascertain whether such party has any place
of business, or to discover his place of residence, he shall expressly
state in the protest that his inquiries have been unsuccessful.
A single act of 
protest to be drawn 
up even where the 
demand is to be 
made to several 
persons.
250.   Where the demand for acceptance or payment is to be
made to two or more persons, it shall be sufficient to draw up a
single act of protest with respect to such demand.
Want of protest 
cannot be supplied 
by other means.
251.   No other act by the holder of the bill can supply the want
of the act of protest, saving the cases provided for in articles 199,
200, 201 and 202 with regard to lost bills.
O F  R E-EXCHANGE
How effected.
Definition of re-
draft or retraite 
bill.
253.   A   re-draft is a fresh bill drawn by the holder in order to
recover from the drawer or from one of the endorsers the amount
due to him as holder of the protested bill, in accordance with the
provisions of article 256.
How re-exchange 
is regulated.
254.   Re-exchange is regulated according to the course of
exchange of the place in which the re-draft is drawn on the place
where the reimbursement is to be made.
Re-draft to be 
accompanied by 
account of re-draft.
255.  A re-draft must be accompanied by an account termed
"account of re-draft".
Contents of 
account.
256. (1) Such account shall comprise -
( a ) the amount of the protested bill;
( b ) the expenses of the protest, and other lawful expenses,
such as those of commission, brokerage and postage;
( c ) the name of the party on whom the re-draft is drawn,
and the rate of exchange at which it is negotiated, such
rate of exchange to be certified by a broker or two
merchants.
(2) The said account shall be accompanied by the protested bill
and the protest.
Where there is no 
course of exchange 
between place 
where re-draft is 
drawn and place on 
which it is drawn.
257.   Where there is no course of exchange between the place at
which, and the place on which a re-draft is drawn, the re-exchange
shall be reckoned according to the course of exchange on the place
nearest to that on which the re-draft is drawn.
Interest.
payment, on the expenses of protest, and on all other lawful
expenses, shall be recoverable as from the day of the protest.
Absence of 
certificate bars 
claims on re-draft.
259.   No payment may be claimed on a re-draft unless the
account of re-draft be accompanied by the certificate prescribed in
40               CAP. 13. ]               COMMERCIAL CODE
article 256.
Sub-title II
O F  P ROMISSORY  N OTES, AND  D RAFTS OR  C HEQUES ON 
B ANKERS OR  C ASHIERS
Provisions relating 
to bills of exchange 
applicable to 
promissory notes.
260.  The provisions applicable to bills of exchange, and
relating to endorsement, joint and several liability,  aval , time of
maturity, payment, payment for honour, protest, duties and rights of
the holder, and re-exchange, shall apply to promissory notes.
Contents of 
promissory note.
261. (1) A promissory note shall state the date, the amount to
be paid, the person in whose favour or to whose order such note is
signed, the time when payment is due, and the value supplied in
cash, goods, in account or in any other manner.
(2) It may also be drawn payable to bearer.
Drafts or cheques. 262. (1) Drafts or cheques on bankers or cashiers shall be
dated, and shall specify the sum to be paid, and shall be made
payable to a person therein named, or to his order, or to bearer.
(2) They shall be payable on presentment.
Consequence of 
delay in presenting 
cheque.
263.   Where the holder of a cheque fails to cash it within three
days from the date thereof, and, after such time, the banker or
cashier refuses to pay, the holder who has received the cheque from
a third party has no right of recourse against such party, nor against
the maker of the cheque, if the latter proves that he had in the hands
of the banker or cashier sufficient funds to meet the cheque, and
that such funds did not cease to be available through his fault.
TITLE VIII
O F THE  C ONTRACT OF  A CCOUNT  C URRENT
Definition of 
account current.
264.   Account current is a contract whereby two persons
covenant that their mutual remittances be entered in an account as
items of debit and credit, subject to the obligation of the party
against whom a balance is found at the time the account is wound
up to pay such balance.
Ownership of 
remittances.
265.   Every remittance made in pursuance of such contract shall
be deemed to pass in absolute ownership from the remittor to the
remittee.
Items of debit and 
credit.
266. The items of debit and credit shall be deemed to be two
indivisible amounts:
 Provided that, in default of an agreement to the contrary, every
right of action or defence relating to any act or contract giving rise
to each separate remittance shall remain unimpaired; and, where
   COMMERCIAL CODE       [ CAP. 13.             41
any such act or contract is annulled, the items relating thereto shall
be struck out of the account.
Where secured 
claim is passed to 
account current.
267. (1) The party who has included in the account a debt
secured by a pledge or a hypothec shall be entitled to enforce such
security for the payment of any balance which may be found for
him.
(2) The provisions of this article shall also apply with regard to
any claim passed to account current which is secured by the
obligation of a surety or a co-debtor.
Remittances of 
debts due.
268. (1) All remittances of debts due, whatever their origin,
shall be deemed to be passed to account current under the clause
"subject to collection".
(2) If any such debt remains unpaid, the remittee may elect
either to strike the item out of the account or to sue the remittor
thereof for the payment of the debt.
Garnishee order 
against a party to 
an account.
269.   Any creditor of any of the parties to an account current
may sue out a garnishee order against his debtor in the hands of the
other party to the account, provided that any such order shall be
operative only when and if a final balance is found for such debtor
on the winding up of the account.
Debtor not to 
impair his position 
in account current.
270. (1) It shall not be lawful for the debtor, after the
execution of the garnishee order referred to in the last preceding
article, to impair his credit account by fresh remittances:
Provided that any remittance the title to which accrued in favour
of the other party to the account current before the issue of the
garnishee order, shall not be deemed to be a fresh remittance.
(2) The party to the account current in whose hands the
attachment is made may, on being served with the garnishee order,
demand the dissolution of the contract.
Account current to 
be wound up 
yearly.
271.   Save as otherwise agreed upon between the parties, an
account current shall be wound up yearly.
Effects of death, 
disability or 
bankruptcy of 
party to an account 
current.
272.   The death, or the supervening disability, or the bankruptcy
of a party to an account current shall not operate so as to determine
the contract, unless the heir, or representative, or the other party to
the account, as the case may be, elects to determine the contract by
means of a judicial intimation to that effect within three months
from the happening of any of the aforesaid events.
42               CAP. 13. ]               COMMERCIAL CODE
PART II
O F  M ARITIME  T RADE AND OF  N AVIGATION
Title I
O F THE  C ONTRACT OF  A FFREIGHTMENT
Sub-title I
G ENERAL  P ROVISIONS
Contract of 
affreightment.
273.   A contract of affreightment is an agreement for the hire of
a vessel.
Different kinds of 
affreightment.
274. The affreightment can be -
( a ) for the entire vessel or for a part thereof; for one or
more voyages;
( b ) for the conveyance of goods in a general ship or  á la
cueillette  that is, when the master receives goods
separately from several persons and engages to ship
and convey such goods.
When contract is to 
be made in writing.
275.  Where the vessel, chartered whether in whole or in part, is
of more than thirty tons tonnage, the contract is null unless made in
writing.
Rules as to time for 
loading and 
discharging, in the 
absence of 
agreement.
276. If the period for loading and discharging is not fixed by
agreement, the following rules shall be observed:
( a ) The period for loading or discharging in Malta is of
eight days, if the vessel is of one hundred tons or less;
of twelve days, if the vessel is of more than one
hundred tons but not more than two hundred; of twenty
days, if the vessel is of more than two hundred tons.
Such period shall be reckoned from the time when the
master declares that he is ready to load or discharge.
The days mentioned in this article are successive
working days.
( b ) Outside Malta, the period for loading or discharging
shall be determined according to the laws and usages
of the place of loading or discharging and if the
loading or discharging is to be effected in different
places, the period shall be determined according to the
laws and usages of the place where the last portion of
the cargo is loaded or discharged.
Where loading or 
discharging is to be 
effected at different 
places.
277.   Where a portion of the cargo is to be loaded or discharged
in one place and the remainder in another, the time employed in
proceeding from one place to another shall not be computed in the
time limited for loading or discharging.
Where person 
letting vessel 
makes untrue 
statement as to 
tonnage thereof.
278. (1) If the person letting the vessel declares the vessel to
be of a tonnage greater than her real tonnage, he shall be liable to a
proportionate abatement of the freight, and shall be answerable for
damages and interest to the freighter.
   COMMERCIAL CODE       [ CAP. 13.             43
(2) The provisions of this article shall not apply, where the
difference between the declared tonnage and the real tonnage does
not exceed a fortieth part of the real tonnage.
When freight can 
be demanded.
279.   The payment of the freight can be demanded immediately
after the delivery of the cargo.
When freight 
commences to run 
in cases where 
vessel is chartered 
by the month.
280. (1) Where the vessel is chartered by the month, the
freight runs from the time of the commencement of the voyage.
(2) A voyage is deemed to be commenced as soon as the vessel
has left the place where the loading commenced, or if the vessel
sails in ballast, from the place where the ballast was shipped.
Buyer, etc., bound 
by affreightment 
previously 
stipulated by the 
seller, etc. 
281.   The buyer or any other successor is bound to abide by the
terms of the contract of affreightment stipulated by the seller or any
other prior possessor of the vessel.
Sub-title II
O F THE  R IGHTS AND  D UTIES OF THE  P ERSON LETTING 
THE  V ESSEL AND THE  F REIGHTER
Where freighter 
does not ship any 
portion of cargo.
282. If the freighter has not shipped any portion of the cargo
within the period fixed in the contract or determined by law, the
person letting the vessel may, at his option, either - 
( a ) claim the indemnity fixed in the contract, or, failing
any covenant thereanent, an indemnity to be assessed
by experts; or
( b ) rescind the contract, and claim from the freighter half
the freight; or
( c ) on the lapse of two days from the date of service of a
protest, undertake the voyage without a cargo, and, on
the completion of the voyage, claim from the freighter
the freight in full, besides the amount of demurrage, if
any, and the expenses incurred for the protest and for
any other act which it was necessary for him to make.
Where freighter 
ships only a 
portion of cargo. 
283. If within the period aforesaid, the freighter has shipped
only a portion of the cargo, the person letting the vessel may, at his
option, either - 
( a ) demand the indemnity mentioned in the last preceding
article; or
( b ) on the lapse of two days from the date of service of a
protest, undertake the voyage with the portion so
shipped, and claim the freight, the demurrage, and the
expenses, as provided in the last preceding article.
44               CAP. 13. ]               COMMERCIAL CODE
Contribution to 
general average 
where freighter 
fails to ship cargo, 
or ships only a 
portion thereof.
284.   If during the voyage the vessel which has sailed without a
cargo, or with a portion only of the cargo, sustains a loss which
would have given rise to a general average in case the vessel had
taken on board a full cargo, the person letting the vessel may claim
from the freighter a contribution reckoned on two-thirds of the
goods which the latter failed to ship.
Where freighter 
abandons contract.
285.   If the freighter has not shipped any portion of the cargo,
and abandons the contract before the commencement of the period
of demurrage, he must pay to the person letting the vessel half the
freight.
Person letting 
vessel may take in 
other goods in the 
place of those not 
shipped by 
freighter.
286. (1) Where the person letting the vessel is entitled to sail
without a cargo, or with a portion only of the cargo, he may, for the
purpose of securing the freight and the contribution to general
average, take in other goods, even without the consent of the
freighter.
(2) In any such case the freight for such other goods shall be
accounted to the original freighter, who shall, moreover, be
discharged from such contribution to general average as shall have
been paid by such other goods.
When freighter 
ships more than 
agreed upon.
287.   Where the freighter ships more than was agreed upon, he
shall pay freight on the excess at the rate stipulated for the quantity
agreed upon.
Liability of person 
letting the vessel 
for delay.
288.   If the vessel is not ready, and is not in a state to receive the
goods at the stipulated time, the person letting the vessel shall be
liable to pay damages and interest to the freighter.
Time for sailing 
where 
affreightment is for 
conveyance of 
goods in a general 
ship.
289.   Where the affreightment is for the conveyance of goods in
a general ship, the master shall sail with the first favourable wind
or on the first favourable opportunity after the expiration of the
period during which it was agreed that the vessel would take in her
lading, unless a further delay be agreed to by the shippers.
Right of shippers 
in contract for 
conveyance of 
goods in a general 
ship.
290. (1) If in a contract for the conveyance of goods in a
general ship, the day for the sailing of the vessel is not fixed, it
shall be lawful for each of the shippers to withdraw his own goods
without payment of freight, on returning the bills of lading signed
by the master, or giving security for such bills as may have already
been forwarded, and on paying all the expenses for the loading and
unloading of such goods.
(2) Nevertheless, where, in any such case, the vessel has
already on board more than one-half of the cargo, the master shall
sail with the first favourable wind or on the first favourable
opportunity, if he is required to do so by means of a protest by the
shippers representing the greater part of the cargo, and he shall so
sail not later than eight days from the service of such protest; in
such case no one of the shippers shall be allowed to withdraw his
goods.
Where vessel is 
arrested through 
fault of freighter, 
etc.
291.   If a vessel is arrested at the time of departure, or during
the voyage, or at the place of discharge, on account of the act or
negligence of the freighter or any of the shippers, such freighter or
shipper shall make good to the person letting the vessel and the
   COMMERCIAL CODE       [ CAP. 13.             45
other shippers all damages and interest.
Where vessel is 
detained or delayed 
through fault of 
person letting the 
vessel.
292.   The person letting the vessel shall be liable in damages
and interest to the freighter, if, on account of the act or negligence
of the former, the vessel is detained or delayed at the time of
departure, or during the voyage, or at the place of discharge.
Where freighter 
loads forbidden 
goods, etc.
293.   If, without the knowledge or concurrence of the person
letting the vessel or of the master, the freighter or the shipper loads
goods the importation or exportation of which is prohibited, or, by
any other unlawful act during the time of loading or unloading,
causes injury to the vessel or to other interested parties, he is bound
to make good any damages, and, even though the goods are
confiscated, to pay the full freight, and to contribute towards
general average, if any.
Where vessel 
requires refitting.
294. (1) If the master is obliged to refit the vessel in the course
of the voyage, the freighter or the shipper is bound to await the
carrying out of such refitting, unless he elects to withdraw his
goods, in which case he must pay the full freight and contribute
towards general average, saving the provisions of article 324.
(2) If the vessel is chartered by the month, the freight shall
continue to run during the time of refitting, but if the vessel is
chartered by the voyage, no increase of freight may be claimed.
(3) If the vessel cannot be refitted, the master must charter
another vessel or other vessels to carry the goods to the place of
destination.
(4) If the master is unable to charter such other vessel or
vessels at the same place or at a place nearby, freight is due in
proportion to the part of the voyage performed.
(5) In the case mentioned in sub-article (4) of this article, the
duty to provide for the conveyance of the goods shall devolve on
the shippers severally, but the person letting the vessel shall be
bound not only to inform them as to his situation, but also to take
meanwhile all such steps as may be necessary for the preservation
of the cargo.
Where vessel was 
unseaworthy at the 
time of sailing.
295.   The person letting the vessel loses his freight and is
answerable for damages and interest to the freighter, if the latter
proves that the vessel was unseaworthy when she sailed.
When freighter 
may withdraw 
goods in the course 
of the voyage.
296.   The freighter may in the course of the voyage withdraw
the whole of the goods, or a portion thereof, provided no injury or
delay be caused thereby to the other freighters, and provided he
pays to the master the whole freight for the goods withdrawn, as
well as any contribution to general average or other indemnity
which may be due, according to circumstances, saving the
provisions of article 324.
Where cargo 
becomes incapable 
of being carried.
297.   Where, in the course of the voyage, the cargo has by
reason of any peril of the sea become incapable of being carried, it
shall be lawful for the freighter to withdraw it on paying the freight
in proportion to the voyage performed; but if the cargo has become
so incapable by its own inherent vice, the freighter must, if he
withdraws the cargo, pay full freight.
46               CAP. 13. ]               COMMERCIAL CODE
Freight on goods 
sold during 
voyage.
298.   The freight on goods which the master has been compelled
to sell in the course of the voyage for refitting the vessel, or for
buying sails, ropes, or other apparel, or provisions, shall be payable
in full, if the vessel arrives in safety, or in proportion to the voyage
performed, if the vessel is wrecked.
Freight in respect 
of jettisoned 
goods.
299.   The freight in respect of goods jettisoned for the common
safety shall be payable by contribution as a general average.
No freight due for 
goods lost by 
shipwreck, etc.
300.   No freight is due for goods lost by shipwreck, stranding,
or any other  vis major , and the person letting the vessel is bound to
refund the freight paid to him in advance.
Freight is due 
where goods are 
saved,
301. (1) If the goods have been saved from shipwreck or other
accident, freight is due to the person letting the vessel as far as the
place of the accident.
(2) The entire freight is due to him if he carries the goods to
their place of destination.
unless saved 
without co-
operation of 
master.
302.   No freight is due for goods, forming part of the cargo,
which may have been saved at sea or on the coast, without the co-
operation of the master.
Discharge of cargo. 303.   After the expiration of the period agreed upon in the
contract, or fixed by law for unloading, the person letting the vessel
or the master can compel the freighter or the consignee of the goods
to proceed to the unloading of the vessel, and to pay the freight and
average.
When person 
letting vessel or 
master may 
discharge and 
deposit goods.
304.   If, the lay days having elapsed, any dispute arises with
regard to the unloading of the vessel, the person letting the vessel
or the master may discharge the goods, and put them on deposit in
the hands of a third party, without prejudice to his right over such
goods.
Master cannot 
detain goods on 
board.
305. (1) The person letting the vessel or the master cannot
detain the goods on board the vessel on the plea of default of
payment of the freight, the general average, and other charges.
(2) Nevertheless, the person letting the vessel or the master can
deposit the goods with a third party until the sum due to him is
paid, and can, if such goods are perishable, demand that they be
sold.
(3) Where the general average cannot be immediately adjusted,
it shall be lawful to demand that a judicial deposit be made of a
sum to be fixed by the court.
When master loses 
his remedy against 
the freighter or 
shipper. 
306.   Where the master unloads the goods without obtaining
payment of the freight, average, and other charges, or without
taking such precautions as are allowed to him by the laws in force
at the place of discharge, he shall forfeit his right against the
freighter or the shipper, if such freighter or shipper proves that he
has duly settled the amount of such freight, average, and charges
with the person receiving the goods, or that he cannot, owing to the
bankruptcy of such person, recover back such amount.
   COMMERCIAL CODE       [ CAP. 13.             47
Where consignee 
refuses to receive 
the goods.
307.   If the consignee refuses to receive the goods, the person
letting the vessel or the master may demand the sale of such
quantity of the goods as may be required for the payment of the
freight, average and other charges, saving the right of resort to the
freighters or the shippers in case of insufficiency of the proceeds.
Lien or privilege 
extends to average 
and other charges.
Cap. 16.
308. (1) The special lien or privilege which, under the
provisions of paragraph ( c ) of article 2009 of the Civil Code, is
competent to the person letting the vessel or the master for the
payment of the freight, extends also to average contributions and
other charges.
(2) Such lien or privilege, however, both in regard to the
amount of freight, and to the average and other charges, ceases on
the expiration of fifteen days from the day of the delivery of the
goods, notwithstanding that such goods may have not yet passed
into the hands of third parties.
When goods are to 
be numbered, etc.
309.   In all cases where the freight is agreed upon by the
number, measure, or weight of the goods to be carried, the person
letting the vessel is entitled to demand that the goods be numbered,
measured, or weighed at the time of their discharge.
Freighter or 
shipper cannot 
demand reduction 
of freight.
310.   In no case can the freighter or the shipper demand a
reduction in the freight.
When shipper may 
abandon goods for 
freight.
311.   The shipper cannot abandon for the freight goods which
have decreased in value or deteriorated whether by their own
inherent vice or by any fortuitous event. Nevertheless, if casks of
wine, oil, honey, or other liquids have so leaked as to be empty or
almost empty, such casks may be abandoned for the freight.
Sub-title III
O F THE  D ISSOLUTION OF  C ONTRACTS OF  A FFREIGHTMENT
When contract of 
affreightment is 
dissolved  ipso jure.  
312. (1  A contract of affreightment is dissolved  ipso jure ,
without any right of the parties to the contract to claim freight or
indemnity, upon the happening, before the departure of the vessel,
of any of the following circumstances:
( a ) if the departure of the vessel is prevented by a  vis
major ;
( b ) if the exportation from the place of departure of all or
any of the goods included in one and the same contract
of affreightment is prohibited, or if the importation
thereof is prohibited at the place of destination;
( c ) if trade with the place to which the vessel is bound is
interdicted.
(2) In every such case the freighter must bear the expenses of
loading and discharging.
48               CAP. 13. ]               COMMERCIAL CODE
Breaking out of 
war.
313. (1) A contract of affreightment can be dissolved upon the
demand of either of the parties if, before the commencement of the
voyage, a war breaks out by reason whereof the vessel or the cargo
or both ceases or cease to be considered as neutral property.
(2) If neither the vessel nor the cargo is free, the person letting
the vessel and the freighter have no claim upon each other for
compensation, but the expenses of loading and discharging shall be
borne by the freighter.
(3) If the cargo only is not free, the freighter must pay to the
person letting the vessel all the expenses necessary for fitting out
the vessel, for the wages and the maintenance of the crew up to the
day on which the demand for the dissolution of the contract is
made, or, if the goods be already on board, up to the day of
unloading.
(4) If the vessel only is not free, the expenses of loading and
unloading shall be borne by the person letting the vessel.
Person letting 
vessel maintains 
unimpaired his 
right for demurrage 
and average.
314.  In the cases mentioned in the last two preceding articles,
the person letting the vessel maintains unimpaired his rights with
regard to demurrage and to general average, if any.
If vessel is 
freighted for more 
than one place of 
destination, and 
war breaks out 
before the 
completion of the 
voyages.
315. If a vessel, freighted for more than one place of
destination, after the completion of one voyage, happens to be in
the port wherefrom she is to undertake another voyage, and a war
breaks out before the commencement of such other voyage, the
following rules shall be observed:
( a ) if neither the vessel nor the cargo is free -
the vessel shall stay in port until the conclusion of
peace, or until she can sail with convoy, or in any other
safe manner, or until further instructions are
transmitted to the master by the owners of the vessel
and of the cargo, 
where the vessel is laden, the master may deposit
the goods in a warehouse or in any other place of safe
custody, until the voyage can be continued or until
other measures are adopted,
the wages of the seamen and the expenses for the
maintenance of the crew, warehouse rent and any other
expense occasioned by the delay shall be borne, by
way of general average, by the freighter and the person
letting the vessel,
where the vessel is not laden, two-thirds of the
expenses shall be borne by the freighter;
( b ) if the vessel only is not free - 
the contract for the intended voyage shall be
dissolved upon the demand of the person letting the
vessel,
where the vessel is laden, the person letting her or
the master shall pay the expenses for loading and
   COMMERCIAL CODE       [ CAP. 13.             49
unloading, and they can only claim freight in
proportion to the voyages already performed,
demurrage, and general average;
( c ) if the cargo only is not free, and the freighter does not
otherwise effect the shipment, the master may sail
without the cargo, and complete the voyage
undertaken. In any such case, the person letting the
vessel or the master is entitled, on completion of the
voyage, to claim the whole freight, and the provisions
of articles 284 and 286 shall also apply:
  Provided that if the freighter is absent they shall use
all due diligence to obtain a cargo from other persons.
Where war breaks 
out before, or on 
arrival of the vessel 
at the place of 
loading.
316. (1) Where a vessel is freighted to proceed in ballast to
another port, there to be laden for a voyage, the contract shall be
dissolved if, when the vessel is on her way to, or has arrived at the
place of loading, a war breaks out, which prevents the continuation
of the voyage; and no claim to compensation shall be competent to
either party, if the restraint affects the vessel alone, or both the
vessel and the cargo.
(2) If, on the contrary, the vessel is free, but not the cargo, the
freighter shall pay half the stipulated freight.
Interdiction of 
trade.
317.   If, whilst a vessel is on a voyage, trade with the country to
which the vessel is proceeding is interdicted, and the vessel is
obliged to return with the cargo, freight is due for the outward
voyage only, even though the vessel may have been chartered "out
and home".
Embargo.
majeure  causes a temporary suspension of the voyage of a vessel
whether before the vessel’s departure or during the voyage, without
any fault of the master, the owner, or the freighter, the contract
shall continue to subsist, and neither party is liable for damages for
delay.
(2) Freight shall also be due during the detention of the vessel,
if the vessel is chartered by the month; but no increase is due, if the
vessel is chartered for the voyage.
(3) The shipper can have his goods discharged during the
detention at his own expense, on condition of re-loading them or of
indemnifying the person letting the vessel or the master.
Blockade.
master must, in the absence of instructions to the contrary, proceed
to such one of the neighbouring ports of the same State as he may
be allowed to put into.
Conveyance in a 
general ship.
320.   All the rules contained in this sub-title shall apply to the
contract for the conveyance of merchandise in a general ship or  á la
cueillette.
50               CAP. 13. ]               COMMERCIAL CODE
Sub-title IV
O F  B ILLS OF  L ADING
Bill of lading. 321.   The bill of lading shall be signed by the master, and given
to the shipper, and a duplicate shall be signed by the shipper, and
given to the master.
How drawn and 
transferred.
322. (1) The bill of lading may be drawn to order or to bearer
or in favour of a party named therein.
(2) It may be transferred by endorsement even in blank.
Parts of bill of 
lading.
323.   The master shall give as many parts of a bill of lading as
are asked for by the freighter or the shipper.
Goods cannot be 
withdrawn without 
the bills of lading.
324. (1) Freighters or shippers cannot withdraw the goods,
already shipped, without returning to the master the bills of lading
received in respect of such goods.
(2) If one bill of lading or more than one shall have been
forwarded, it shall not be competent to the freighters or the
shippers to withdraw the aforesaid goods except upon giving
sufficient security in respect of any consequences which may arise
from the forwarding of such bill or bills, and under the obligation,
in all cases, of paying the entire freight, the expenses for
discharging the goods, and those occasioned by the displacement of
the remainder of the cargo, saving the provisions of article 290 and
any other provision of law.
Persons between 
whom bill of 
lading is binding.
325.   A bill of lading is conclusive evidence between all persons
concerned in the cargo, as well as between them and the insurers,
saving any proof to the contrary.
When different 
parts of a bill of 
lading are at 
variance.
326.   If there is a variance between bills of lading of the same
cargo, the one which is in the hands of the master shall be
conclusive evidence if it is filled up by the shipper or his agent; and
that presented by the shipper or by the consignee is conclusive
evidence, if filled up by the master.
Agents or 
consignees to give 
receipt.
327.   Every agent or consignee on receiving the goods specified
in the bill of lading or in the contract of affreightment shall be
bound to give the master a receipt for such goods, under penalty of
paying all the expenses, damages, and interest, including those
occasioned by the delay.
Sub-title V
O F  P ASSENGERS
If passenger fails to 
go on board at 
appointed time.
328.   If the passenger fails to go on board, or, without the
permission of the master, absents himself from the vessel at the
time appointed for the departure thereof, the master shall be at
liberty to sail, and may claim the entire amount of passage money.
   COMMERCIAL CODE       [ CAP. 13.             51
Passenger cannot 
transfer his right.
329.   A passenger cannot, without the consent of the master,
transfer to a third party the right accruing to him from the contract.
If passenger dies 
before 
commencement of 
voyage.
330. (1) If the passenger dies before the commencement of the
voyage, only half the passage money shall be due.
(2) Where in any such case the cost of provisions is included in
the passage money agreed upon, such cost shall be deducted
therefrom.
Interruption of 
voyage.
331. (1) If the vessel’s voyage be interrupted or suspended,
whether before the departure or in the course of the voyage, by a  vis
major ,   or by any cause beyond the master’s control, the passenger
and the master shall be released from their mutual obligations, and
neither of them can claim compensation from the other.
(2) In the case, however, of the interruption of a voyage after
the commencement thereof, the passengers shall pay passage
money in proportion to the part of the voyage performed.
Passenger entitled 
to provisions 
during delay.
332.   If in the case contemplated in article 294 a passenger is
willing to await the refitting of the vessel, the supply of provisions
during the delay shall be at the charge of the master, if he has
undertaken to furnish provisions during the voyage.
Passengers to obey 
master ’ s orders.
333.   Passengers shall obey the orders of the master in all
matters concerning the preservation of order on board the vessel.
Master not to 
deviate at request 
of passenger.
334.   The master is neither bound, nor authorized, to put into a
port, or to stop during the voyage, at the request or for the benefit
of a passenger.
Maintenance of 
passengers.
335.   Passengers shall, in the absence of an agreement to the
contrary, provide for their own maintenance; but the master is,
when required, bound to supply to a passenger at a fair price such
provisions as may be necessary.
Property of 
deceased 
passenger.
336.   If a passenger dies in the course of the voyage, the master
shall provide for the custody of such effects of the deceased as are
found on board.
Right of retention.
Cap. 16.
337.  The master shall, for the payment of the passage money
and the cost of provisions, have a right of retention over the effects
brought on board by a passenger, in addition to the same special
privilege as is competent to the creditors mentioned in paragraph
( b )   of article 2009 of the Civil Code.
Title II
O F  C ONTRACTS OF  L OAN ON  B OTTOMRY AND  AT 
RESPONDENTIA
Articles 338 to 360, both inclusive, repealed by: XXXVII.
1988.41. 
52               CAP. 13. ]               COMMERCIAL CODE
Title III
O F  M ARINE  I NSURANCE
Sub-title I
O F THE  C ONTRACT OF  M ARINE  I NSURANCE
Contracts of 
insurance to be 
made in writing.
361. (1) Contracts of insurance must be made in writing, under
pain of nullity.
(2) They may be made by a private writing, which is called a
policy. No blank space shall be left in the policy.
(3) There shall be stated in the contract the date of the day on
which it is signed, and whether the contract was made before or
after noon.
One contract may 
contain several 
insurances.
362. (1) The same contract may contain several insurances,
whether by reason of the things insured, or of the rate of the
premium, or of the several insurers.
(2) Where by the same contract things, even of a different kind,
shipped in the same vessel, are insured in favour of one person
only, one insurance only is deemed to be made.
(3) Where the insurers are two or more, and they do not sign
the contract at the same time, each of them shall, before signing,
state the day and hour of the affixing of his signature.
Transfer by 
endorsement.
363.   The policy is transferable by endorsement.
Things that may be 
insured.
364. (1) The insurance may be upon the hull of the vessel,
whether laden or in ballast, fitted out or not fitted out, sailing alone
or with others; her tackle and apparel; her equipment; her
provisions; all that which may have been expended for the vessel
up to the day of her departure; the sums lent on bottomry and the
interest thereon; the cargo; the anticipated profits; the stipulated
freight; and upon all other things capable of being estimated in
money, and subject to the perils of navigation.
(2) An insurance of the vessel, without any other explanation,
includes the hull, the tackle and apparel, and the equipment.
When and for what 
period insurance 
can be made.
365. (1) An insurance may be made on the whole or on a part
of the above-mentioned things, jointly or separately.
(2) It may be made in time of peace or in time of war, before or
during the voyage of the vessel.
(3) It may be for a voyage "out and home", or only for one of
the two; for a whole voyage or for a definite period; for a
determinate voyage and for a definite period jointly; for all the
voyages and passages by sea, through rivers or navigable channels.
Duration of risks. 366.   If both the voyage and the time are specified in the
contract of insurance, the insurer shall run the risks of the entire
voyage. Where the duration of the voyage exceeds the time
specified, the premium shall be increased in proportion to the
excess. Where the voyage is completed in less than the time
   COMMERCIAL CODE       [ CAP. 13.             53
specified, the premium agreed upon cannot in any way be reduced.
Goods insured on 
vessel unknown to 
the assured.
367.  If the assured does not know on board of which vessel the
goods are shipped, such goods can be insured as shipped on board a
vessel unknown to the assured.
When nature of 
goods is not stated 
in the contract.
368.   If the nature or the kind of the goods is not stated in the
contract, the goods can be insured under the general description of
merchandise; but such insurance shall not include gold or silver
coins or ingots, or pieces of gold and silver, or diamonds, pearls,
gold ware, or munitions of war.
Goods valued in 
foreign money.
369.   If the value of the thing insured is fixed in the contract in
foreign money, it shall be reckoned at the value of such foreign
money in Malta, according to the rate of exchange at the time of the
stipulation of the contract.
Proof of value of 
goods.
370.   If the value of the goods is not stated in the contract, such
value can be proved by the invoices and the books: in the absence
thereof, the goods shall be valued according to the market price at
the time and place of loading, including all duties paid and charges
incurred up to the time the goods have been shipped.
Proof of 
anticipated profit.
371.   The anticipated profit is proved by means of the lists of
prices current, or, in the absence thereof, by such other means as
may establish the amount of profit which might have reasonably
been obtained if the goods insured had reached their place of
destination after a voyage without any accident.
Where profit is less 
than the sum 
declared by 
assured.
372.   Where by such lists of prices current or other means it is
proved that, in case of safe arrival, the profit would have been less
than the sum stated in the contract by the assured, the insurer is
discharged on paying such lesser sum. If the goods insured would
have yielded no profit, nothing shall be due by the insurer.
Proof of amount of 
freight.
373. (1) The amount of the freight is proved by the contract of
affreightment, or by the bill of lading.
(2) Failing such evidence, and in regard to goods belonging to
the ship-owners themselves, the amount of the freight shall be fixed
by experts.
Period of risk.
insurance, such risk shall commence to run and shall come to an
end as provided in article 355.
Period of risk in 
regard to goods,
375.   When goods have been insured, the period of the risk shall
run without any interruption even in cases where, after the vessel
had dropped anchor at an intermediate port, the master has been
compelled to unload the cargo for the purpose of refitting the
vessel; but the period of the risk shall end if the voyage is legally
interrupted, or whenever the assured has ordered the goods not to
be reshipped, or, lastly, immediately on the completion of the
voyage.
in regard to freight,
far as the insurer is concerned, as and when the goods contributing
to the freight are shipped, and shall end on their being landed.
54               CAP. 13. ]               COMMERCIAL CODE
in regard to 
insurers of loans on 
bottomry,
377.  In regard to insurers of sums lent on bottomry, the period
of the risk shall commence and end simultaneously with the
beginning and the end of the risk of the lender, in terms of law, and
according to such agreements as are notified to the insurer.
in regard to 
anticipated profits.
378.   The period of the risk in regard to anticipated profits shall
be the same as that in regard to goods.
Anticipated profits 
to be valued 
separately.
379. (1) Where an insurance has been made on anticipated
profits, such profits shall be estimated separately in the contract,
with an indication of the goods in regard to which such profits are
anticipated.
(2) In case of a valuation in gross of the subject insured, with
an express covenant that the surplus value shall be considered as
the anticipated profits, the insurance shall only be good to the
extent of the cost of the subject insured, and of such amount of
anticipated profits, over and above the cost, as may be proved
under articles 370 and 371.
Reinsurance. 380. (1) It shall be lawful for the insurer to reinsure with
another person things which he has insured.
(2) The assured may insure the cost of the insurance.
(3) The premium of the reinsurance may be greater or less than
that of the insurance.
Increase of 
premium on 
outbreak of 
hostilities.
381.   If, after the commencement of the risks contemplated in
the contract of insurance, a war breaks out, and, in consequence
thereof, the subject insured is exposed to greater danger, it shall be
competent to the insurer to demand an increase of the premium,
and, if such increase is not agreed upon by the parties, it shall be
fixed by the court, regard being had to the circumstances causing
the increase of the danger.
Seaman or 
passenger having 
goods insured to 
deposit bill of 
lading. 
Amended by: 
XXXI.1966.2; 
LVIII.1974.68; 
XXIV.1995.362.
382. (1) A member of the crew or a passenger having on board
the vessel in or on which he is serving or is carried, goods insured
in Malta shall deposit a bill of lading in the Civil Court, First Hall,
if the shipment is made in Malta; if the shipment is made outside
Malta, such bill of lading shall be deposited with the diplomatic or
consular representative of the Government of Malta in that port or
with a person serving in a diplomatic, consular or other foreign
service of any country which, by arrangement with the Government
of Malta, has undertaken to represent that Government’s interests
in that port or with a person authorised in that behalf by the
President of Malta, or, in the absence of such persons, with some
trustworthy merchant being a citizen of Malta or other
Commonwealth citizen, or with a local magistrate.
(2) If the goods insured belong to the master, the bill of lading
shall be signed by two of the principal members of the crew, and, in
case of any disaster, the master shall also be bound to prove to the
insurers the purchase of such goods.
Bankruptcy of the 
insurer or the 
assured.
383. (1) If the insurer becomes bankrupt before the
termination of the risk, the assured may demand either that security
be given or that the contract be rescinded.
   COMMERCIAL CODE       [ CAP. 13.             55
(2) The same right shall be competent to the insurer in case of
bankruptcy of the assured, if the premium has not been paid to him.
When contract of 
insurance is null.
384. A contract of insurance is null, if made upon - 
( a ) the pay or wages of members of the crew;
( b ) the premium or primage payable to the master;
( c ) vessels or goods charged, before the commencement of
the voyage, with a loan on bottomry for their entire
value:
Provided that if such vessels or goods are only in
part charged with such loans, the contract of insurance
shall be valid for the excess of their value over the sum
borrowed.
Concealment or 
mis-representation.
385. (1) Any concealment, or any misrepresentation by the
assured, or any discrepancy between the contract of insurance and
the bill of lading, shall render the contract of insurance void, if
such concealment, misrepresentation, or discrepancy is such as to
lessen the estimate of the risk, or to change the subject-matter
thereof.
(2) The insurance shall be void even if the concealment,
misrepresentation, or discrepancy shall have had no effect upon the
damage or loss of the things insured.
Sub-title II
O F THE  R IGHTS AND  O BLIGATIONS OF THE  I NSURER AND OF 
THE  A SSURED
Where voyage is 
abandoned before 
commencement of 
risk.
386. (1) If the voyage is abandoned, even though by the act of
the assured, before the insurer has begun to run the risk, the
insurance becomes void, and the assured is not bound to pay the
premium, or, in case he has paid it, he shall be entitled to demand
from the insurer the repayment thereof.
(2) The insurer, however, shall receive, by way of
compensation, one half  per centum  on the sum insured, or one half
of the premium, if the whole premium does not amount to one per
cent.
Risks borne by 
insurer.
387.   Any loss or damage which happens to the things insured
by reason of stress of weather, shipwreck, stranding, fortuitous
collision, compulsory deviations, or changes of voyage or vessel;
or by reason of jettison, fire, capture, pillage, piracy, arrest and
restraint of princes and peoples, declaration of war, reprisals; or in
general by reason of any other peril of the sea, shall be at the risk of
the insurer, unless the insurer shall have covenanted his exemption
from one or more of such risks.
56               CAP. 13. ]               COMMERCIAL CODE
Voluntary 
deviations, etc., not 
to be borne by 
insurer.
388.  Any voluntary deviation, or change of voyage or vessel,
and any loss or damage proceeding from the act of the assured, is
not at the risk of the insurer, and he shall be deemed to have earned
his premium, if the time of his risk has commenced.
Inherent vice of 
subject insured.
389. (1) In the absence of an express agreement to the
contrary, the insurer is in no case answerable for damages or
averages proceeding directly from an inherent vice or from the
nature of the subject insured.
(2) Where an insurer is bound to pay for damages occasioned
by leaking or liquefaction, the leakage or diminution to which the
thing insured is ordinarily subject shall be first deducted.
Barratry. 390. (1) In the absence of an agreement to the contrary, the
insurer shall not be answerable for such malversations or faults of
the master or crew as are known by the name of  barratry of the
master.
(2) Any such contrary agreement is ineffectual in regard to
such portion of the subject insured as belongs to the master.
(3) The insurer shall, however, be answerable for the unskilful-
ness of the master or crew.
Collisions. 
Amended by: 
XXII.1976.4.
391. (1) In cases of damage caused by a collision of vessels,
the insurer shall be liable to make good the damage if the collision
was accidental or was caused by the fault of the master or the crew
of another vessel.
Cap. 234.
(2) Where, however, it is proved that both the vessel insured as
well as the other vessel were in fault, or where it is doubtful to
whose fault the collision is imputable, the damage, in cases not
provided for by the Merchant Shipping Act, shall be borne in equal
portions by the colliding vessels; and, in such cases, as well as in
the case of a collision caused by the fault of the master or the crew
of the vessel insured, the insurer is not responsible, unless he has
assumed liability also for cases of  barratry of the master.
(3) The liability of the insurer, in the cases contemplated in this
article, is limited to the damage sustained by the vessel insured, and
does not extend to any indemnity which, by reason of the collision,
may be due by the vessel insured to the other vessel.
Pilotage dues, etc. 392.   The insurer shall not be liable for ordinary pilotage and
towage dues, or any other kind of dues imposed on the vessel or the
goods, unless such dues have been incurred in consequence of any
damage for which the insurer is liable.
Clause “free from 
average”.
393.  Where the insurance is contracted with the clause "free
from average", the insurer is not answerable for any average,
whether general or particular, except in cases which give rise to an
abandonment.
Clause “free from 
hostitilities”. 
394. (1) Where the insurance is contracted with the clause
"free from hostilities", the insurer shall be discharged from all
liability if the goods perish or are damaged by reason of any
violence, capture, pillage, arrest and restraint of princes and
peoples, declaration of war, or reprisal.
   COMMERCIAL CODE       [ CAP. 13.             57
(2) The contract of insurance shall cease as soon as the subject
insured suffers any delay, or the course of the voyage is altered, by
reason of hostilities.
(3) Nevertheless, the insurer shall not on such account be
discharged from the obligation of making good any damage
sustained before the commencement of hostilities.
Vessel, etc., 
detained in port by 
hostile force.
395.   Where any vessel or goods insured "free from hostilities"
are, by hostile force, taken or detained in any port, such vessel or
goods shall be deemed to be captures at sea, and the risk of the
insurer shall cease.
Insurance on goods 
to be shipped on 
two or more 
vessels.
396.   Where the insurance is made separately on goods which
are to be shipped on two or more vessels specified in the contract,
with a statement of the amount insured on each vessel, and where
the whole of such goods is shipped on one vessel or on a smaller
number of vessels than that stated in the contract, the insurer is
only liable for the amount which he has assured on the vessel or
vessels receiving the goods, notwithstanding the loss of all the
vessels so specified; and shall, nevertheless, be entitled to one half
per centum  on the amounts the insurances whereof have thus
become void.
Where voyage is 
prolonged or 
shortened.
397. (1) The insurer’s risk ceases, and he shall be entitled to
the premium, if the assured sends the vessel to a more distant port
than that stated in the contract, even though it be in the same
course.
(2) The insurance shall have its full effect if the voyage is
shortened.
Assured to give 
notice of disaster to 
insurer.
398. (1) The assured is bound to communicate without delay
to the insurer any information which he receives concerning the
loss of the subject insured, and to furnish the insurers, if required,
with copies or extracts of any document conveying such
information.
(2) Otherwise, he shall bear the damages and costs.
Assured to 
endeavour to 
preserve or recover 
thing insured.
399.   Unless and until the assured shall exercise the right of
abandonment competent to him, he is bound to use his best
endeavours for the preservation or recovery of the subject insured.
Insurer of loan on 
bottomry not liable 
for fraud of 
borrower.
400.   In case of an insurance on a loan on bottomry, the insurer,
in the absence of an agreement to the contrary, shall not be
responsible for any fraud on the part of the borrower.
If things insured 
are not dispatched.
401.   Where the things insured are not dispatched, or only a part
thereof is dispatched, the insurer shall receive one half  per   centum ,
or one half of the premium, according to the provisions of article
386, on the sum insured or on the sum exceeding the value of the
goods dispatched, as the case may be.
Where undisclosed 
principal fails to 
dispatch goods.
402.   A person effecting an insurance on behalf of another
person without disclosing the name of the latter, shall not be
entitled to recover the premium if such other person fails to
dispatch the goods insured, or dispatches only a part thereof.
58               CAP. 13. ]               COMMERCIAL CODE
Insurance for an 
amount over or 
under the real 
value.
403. (1) An insurance effected for an amount exceeding the
value of the subject insured is void as regards the assured only, if
fraud or deceit on his part be proved.
(2) If no fraud or deceit is proved, the insurance is valid up to
the value of the subject insured, and, in regard to the excess, the
insurers shall receive one half  per centum ,   or one half of the
premium, according to the provisions of article 386.
(3) An   agreement that the insurer shall be answerable for the
whole amount stated in the contract, independently of the value of
the subject insured, is valid.
(4) Where the insurance is effected for a value less than the real
value, the insurer shall only be liable in proportion to the value
stated.
Several contracts 
of insurance of the 
same subject.
404. (1) Where there are several contracts of insurance
effected without fraud on the same subject, and the first contract
covers the entire value thereof, such first contract only shall hold
good.
(2) The insurers who have signed the subsequent contracts
shall be discharged, and shall only receive one half  per centum  on
the sum insured, or one half of the premium, according to the
provisions of article 386.
(3) If the entire value of the goods loaded is not covered by the
first contract, the insurers who have signed the subsequent
contracts shall be answerable for the remaining value, according to
the order of the date of the contracts.
If there are goods 
on board to the full 
amount of the 
several insurances 
made.
405.   If there be goods on board to the full amount of the sums
insured, and a portion of such goods is lost, the loss shall be borne
by all the insurers of such goods ratably in proportion to their
respective interest.
If master is 
allowed to touch at 
different ports.
406.   If the master is allowed to touch at different ports for the
purpose of completing or changing his cargo, the insurer runs the
risks of the goods insured, as provided in article 355.
Return of premium 
in case of nullity of 
contract,
407.   In case of total or partial nullity of the contract of
insurance, the insurer shall, provided the assured has acted in good
faith, return the premium or, as the case may be, such proportionate
part thereof as corresponds to the amount received by him in
respect of risks which did not attach, deducting one-half  per
centum ,   or one-half of the premium as provided in article 386.
except in case of 
fraud, etc., of 
assured.
408.   If the contract is avoided by reason of any deceit, fraud, or
bad faith on the part of the assured, the insurer is not bound to
return the premium.
Insurance is null 
where insurer is 
aware of safe 
arrival of vessel, 
etc.
409.   Where an insurance is effected on vessels or goods which,
at the time of the stipulation of the contract of insurance, had
already reached their place of destination, or had sustained a
disaster, such insurance is void, if it is proved, or can be presumed
that, at the time of the signing of the contract, the insurer was
aware of the arrival of the subject insured, or, as the case may be,
the assured was aware of the happening of the disaster.
   COMMERCIAL CODE       [ CAP. 13.             59
Facts which give 
rise to presumption 
of knowledge of 
arrival or loss.
410.   Such presumption shall be deemed to exist whensoever,
reckoning at the rate of four miles to the hour, or whensoever,
regard being had to the means of communication or other
circumstances, it is shown that the information relating to the
arrival or loss of the vessel, from the place of such arrival or loss,
or from the place whence such information first came, could have
reached the place where the contract was made, before the signing
of the same.
Other facts giving 
rise to such 
presumption.
411.   Such presumption shall also be deemed to exist
whensoever, before the signing of the contract of insurance, any
vessel shall have come to the place where the contract was made,
from the place of the arrival or loss, or from the place whence
information of such arrival or loss first came, provided such vessel
shall have sailed from the said place after the arrival or loss.
Clause “good or 
bad news”.
412. (1) The presumption mentioned in the last preceding
article shall not arise if the insurance is effected under the clause
"good or bad news", or any other like clause.
(2) In such case the insurance cannot be avoided, unless it is
proved that the insurer was aware of the arrival, or the insured of
the loss, before the signing of the contract.
Sub-title III
O F  A BANDONMENT
Cases in which 
abandonment can 
be made.
413. (1) The things insured may be abandoned in the following
cases:
( a ) shipwreck;
( b ) stranding or running aground with partial wreck; 
( c ) unseaworthiness occasioned by a peril of the sea; 
( d ) forced abandonment;
( e ) capture;
( f ) arrest and restraint of princes and peoples;
( g ) loss or deterioration of the things insured amounting to
at least three-fourths of their value.
(2) Any other damage shall be deemed to be an average loss,
and shall be settled between the insurer and the assured in
accordance with their agreements, and according to their respective
interest.
When sale of 
goods gives rise to 
abandonment.
414.   The sale of the goods in consequence of a peril of the sea,
during the voyage and before the arrival of such goods at the place
of destination, is deemed to be a case of loss which authorises the
abandonment, whatever the proceeds of such sale may be.
60               CAP. 13. ]               COMMERCIAL CODE
Contributions to 
general average not 
considered in 
establishing value 
of loss or 
deterioration.
415.   Where it is necessary to ascertain whether there is
deterioration or loss corresponding to three-fourths of the value of
the goods insured, the damages which arise from general average
contributions are not taken into consideration. The expenses
relating to the sale of the said goods, and the expenses of the acts
preparatory to the sale are, however, taken into consideration.
Assured may sue 
for abandonment 
or for average.
416. (1) In cases where the things insured may be abandoned,
the assured may elect either to make the abandonment or to bring
an action for average.
(2) It shall not be lawful for the assured, after having elected to
bring an action for average, to waive such action, and bring an
action for abandonment. He may, however, waive the abandonment,
if not yet accepted by the insurers, and bring an action for average.
No abandonment 
before risk 
attaches.
417.   It shall not be lawful to make an abandonment before the
risk insured against has attached.
Abandonment 
cannot be 
conditional or 
partial.
418.   The abandonment of the subject insured cannot be partial
or conditional. It extends only to the property which is the subject
of the insurance and of the risk.
Time within which 
abandonment is to 
be made.
419. (1) An abandonment to the insurer must be made within
the time following:
( a ) six months from the day on which information of the
disaster is received, if it has happened on the coasts of
Europe, or on those of Asia or of Africa in the
Mediterranean, or, in the case of capture, from the day
on which information is received that the prize was
carried into any of the ports or places situated on the
above-mentioned coasts;
( b ) eighteen months to run from the aforesaid days
respectively, if the disaster happened in, or the prize
was conveyed to any other part of the world.
(2) When the said times have expired, it shall not be competent
to the assured to make the abandonment.
Assured to give 
notice to insurer.
420. (1) In every case in which the right to abandon is
competent, and in case of any other peril the risk whereof is to be
borne by the insurer, the assured must give notice to the insurer of
any information which he may have received thereon.
(2) Such notice shall be given without delay under pain of
damages and interest.
When lapse of time 
gives right to 
abandonment 
without necessity 
of proving loss.
421. (1) If, upon the expiration of one year from the day of the
vessel’s departure, or from the day to which the last news of the
vessel relates, in the case of ordinary voyages, or upon the
expiration of two years, in the case of long voyages, the assured
declares that he has received no news of the vessel, he shall be
entitled to abandon, and to claim payment of the sum insured
without any necessity of proving the loss of the vessel.
(2) Upon the expiration of the aforesaid times of one year or of
   COMMERCIAL CODE       [ CAP. 13.             61
two years, the assured shall be allowed, for the purpose of
commencing proceedings, the times fixed in article 419.
When loss is 
presumed to have 
happened in the 
case of “time 
policies”.
422. (1) In the case of an insurance effected for a fixed period
of time, when the times mentioned in the last preceding article have
elapsed, the loss of the vessel shall be presumed to have happened
within the period of the insurance.
(2) If there are several successive insurances for a fixed period
of time, the loss is presumed to have happened within the period of
the first insurance; or, in case of news received as contemplated in
the last preceding article, within the period of that particular
insurance to which the date of the last news corresponds.
Definition of “long 
voyages”.
423.   Long voyages are those having for their destination any
coast or country situated beyond the Straits of Gibraltar, excepting
the European sea coast as far as the Sound, the African sea coast as
far as Cape Verde, the Baltic Sea, the British Isles, the Madeiras
and the Canary Islands.
Assured may 
abandon at once or 
reserve his right to 
do so.
424.   The assured may, by means of the notice mentioned in
article 420, either abandon, and claim from the insurer payment of
the sum assured within the time fixed in the contract, or reserve his
right to abandon within the times fixed by law.
Statement to be 
made by assured in 
making 
abandonment.
425.   The assured shall, when making the abandonment, state all
the insurances made, or caused to be made, or ordered by him, and
the sums of money borrowed on bottomry or  at   respondentia.  In
default of so doing, the time for payment, which is to run from the
day of the abandonment, shall be suspended until the day on which
the assured shall make and notify such statement, but the period
prescribed for making the abandonment shall not be enlarged
thereby.
Consequences of 
fraudulent 
statement.
426.   If the statement be fraudulent, the assured shall be
deprived of the benefits of the insurance, and shall be bound to pay
the sums borrowed on bottomry or  at   respondentia ,
notwithstanding the loss or the capture of the vessel.
Duty of insured in 
case of shipwreck, 
etc.
427. (1) In case of shipwreck or stranding with partial wreck,
the assured is bound to labour for the recovery of the things
insured, without prejudice to the abandonment to be made in due
time and at the proper place.
(2) The assured is entitled to the reimbursement of the
expenses for recovery up to the value of the things recovered.
When sum insured 
is to be paid.
428. (1) If the time for payment is not stated in the contract,
the insurer shall pay the sum insured four months after the notice of
the abandonment.
(2) After the expiration of such time, the insurer shall also pay
interest at the legal rate. The things abandoned shall be charged
with the payment.
62               CAP. 13. ]               COMMERCIAL CODE
Insurer cannot be 
sued before proof 
of shipment and 
loss is furnished to 
him.
429.   The insurer cannot be sued for the payment of the sums
insured before the documents proving the shipment and the loss of
the goods insured are notified to him.
When court is to 
order provisional 
payment.
430. (1) Where, in the opinion of the court, the defence of the
insurers is such as to require a separate trial, the court shall order
the insurers to make provisional payment to the assured of the sum
insured, subject to the obligation of the assured to give security.
(2) Such security shall cease to be binding on the expiration of
two years, if within such time no action shall have been brought by
the insurers.
Effect of 
abandonment.
431.   Where an abandonment has been notified and accepted, or
adjudged valid, the property in the thing insured vests in the insurer
from the day of the abandonment, and the insurer cannot, under the
excuse of the vessel’s return, avoid payment of the sum insured.
Abandonment of 
ship to include 
freight of things 
saved.
432.   The freight of goods saved, even if paid in advance, is
included in the abandonment of the vessel, and becomes likewise
the property of the insurer, without prejudice to the rights of the
lenders on bottomry, or of the seamen for their wages, or of other
parties for the recovery of the expenses incurred during the voyage. 
Arrest and restraint 
of princes and 
peoples.
433. (1) In the case of arrest and restraint of princes and
peoples, the assured shall, without delay, give notice to the insurer
of the information received.
(2) The abandonment of the property arrested cannot be made
until after six months from the day of such notice, if the arrest is
effected in the Mediterranean or other European sea; or until after
one year, if the arrest is effected in a more distant place.
(3) Such times shall commence to run from the day of the
notice of the arrest. Where the goods arrested are of a perishable
nature, the aforesaid times shall be reduced to two months in the
former case, and to three months in the latter case.
Assured to 
endeavour to 
secure release of 
goods arrested.
434. (1) During the running of the times fixed in the last
preceding article, the assured is bound to use all due diligence to
obtain the release of the goods arrested.
(2) The insurers on their part may, either in concert with the
assured or separately, endeavour to secure such release.
Abandonment on 
the ground of 
unseaworthiness.
435.   An abandonment on the ground of unseaworthiness cannot
be made if the vessel can be repaired and made fit to continue the
voyage to her place of destination, unless the expense of refitting
the vessel is such as to exceed three-fourths of the value thereof,
saving the right of action of the assured against the insurers for the
recovery of the amount of the expenses incurred and the average
sustained.
Notice to be given 
to insurers of 
cargo. 
436.   Where the vessel has been declared unfit for navigation,
the party whose goods have been insured is bound to give without
delay notice to the insurer of the information received.
Master to procure 
another vessel.
437.   The master is bound in such case to use all due diligence
   COMMERCIAL CODE       [ CAP. 13.             63
to procure another vessel to carry the goods to their place of
destination.
Risks in case of 
reshipment.
438.   The insurer shall run the risks of the goods reshipped on
another vessel, in the case referred to in the last preceding article,
up to the time of the arrival and discharge of such goods.
Charges for which 
insurer is liable.
439.   The insurer shall moreover be liable for all averages and
all expenses incurred for the unloading, storage and safe keeping in
warehouses, and reshipment of the goods, for any excess of freight,
and for any other expense incurred in saving the goods, to the
extent of the sum insured.
If master fails to 
reship goods 
within two months, 
the assured may 
make 
abandonment.
440.   If within the time of two months the master is unable to
procure another vessel for the reshipment of the goods and the
carriage thereof to the place of destination, it shall be lawful for the
assured to abandon the goods.
Title IV
O F  A VERAGE AND OF  J ETTISON AND  A VERAGE  C ONTRIBUTION
Sub-title I
O F  A VERAGE
Average.
vessel or of the cargo, or of both, and every damage sustained by
the vessel or the cargo from the time of the loading or the sailing up
to the time of the return or discharge, fall under the description of
average.
Rules to be 
observed in the 
absence of special 
agreements.
442.   Failing special agreements between all the parties,
averages are regulated in accordance with the following provisions.
General or 
particular average.
443.   There are two kinds of average: gross or general average,
and simple or particular average.
General averages.
( a ) goods thrown overboard for the common safety, or for
the benefit of the vessel and the cargo jointly;
( b ) cables, masts, sails, and other rigging, cut away or
broken for the said purpose;
( c ) anchors, cordage or other things abandoned for the
said purpose;
( d ) any damage done by jettison to goods remaining on
board;
( e ) any damage voluntarily done to the vessel in order to
facilitate the jettison, to lighten the vessel, or to save
the goods, or in order to facilitate the running out of
the water; and any damage sustained by the cargo from
these causes;
64               CAP. 13. ]               COMMERCIAL CODE
( f ) the maintenance of the seamen during the carrying out
of the repairs of the damage voluntarily sustained for
the common safety;
( g ) the expenses of unloading in order to lighten the
vessel, and of putting into any port or other place,
when the vessel is compelled to do so by stress of
weather, pursuit of enemies or pirates, or any other
cause for the safety of the vessel and the cargo;
( h ) any damage caused to the vessel or to the cargo, or to
both, if the vessel is voluntarily run ashore to avoid
her capture or loss, or to save the vessel or the cargo
from any other imminent peril; the expenses and
wages for getting the vessel afloat; and the salvage
payable for extraordinary services to avoid loss or
capture in the aforesaid cases;
( i ) generally, any damage voluntarily sustained in cases of
danger, and all expenses incurred, for the common
benefit and preservation of the vessel and of the goods,
from the time of loading and sailing, up to the time of
the return and discharge.
Things which 
contribute towards 
general average.
445. The goods, the vessel according to her condition at the time
of her arrival, and the clear amount of the freight after deducting
the wages of the seamen, their maintenance, and other expenses of
the voyage, shall each and all contribute in proportion to their
respective values or amounts, towards general average.
How price of 
goods is fixed.
446. The price of the goods shall be fixed according to their
value at the place of discharge.
Particular 
averages.
447. The following are particular averages:
( a ) any damage sustained by the goods through inherent
defects, or by reason of stress of weather, capture,
shipwreck, or stranding;
( b ) expenses incurred to save the goods;
( c ) the loss of cables, anchors, sails, masts, or cordage,
occasioned by stress of weather or other marine
accident; the expenses of putting into any place owing
to the fortuitous loss of the said things, or to the
necessity of victualling the vessel, or for the purpose
of repairing her in case of leakage;
( d ) the wages and maintenance of the seamen during the
refitting of the vessel for any of the causes mentioned
in this article;
( e ) the wages and maintenance of seamen during
quarantine; and
( f ) generally, all expenses incurred for and any damage
sustained by the vessel alone, or the goods alone, from
the time of the loading and sailing to that of the return
and discharge, whenever such expenses and damage
were not incurred or caused voluntarily, and for the
common safety of the vessel and cargo.
   COMMERCIAL CODE       [ CAP. 13.             65
By whom 
particular averages 
are borne.
448.   Particular averages are borne and paid by the owner of the
thing which has sustained the damage or occasioned the expense.
Damage to goods 
occasioned by 
negligence of 
master or crew.
449. (1) Any damage sustained by the goods by reason of the
master having neglected to secure the hatches, to moor the vessel,
or to provide good cables, or by reason of any other accident
occasioned by the neglect of the master or the crew, are likewise
particular averages to be borne by the owner of such goods; but for
any such damage the owner has a remedy against the master, the
vessel and the freight.
(2) Any damage which the owners of the vessel sustain through
an unnecessary and unreasonably long stay in port shall be made
good by the master.
Expenses for 
pilotage, towage, 
etc., are not 
averages.
450.   Pilotage and towage dues in order to put into or sail from
any port or place, the expenses relating to sea-protests, tonnage and
other navigation dues, are not averages but simple charges on the
vessel, saving the provisions of paragraph ( g ) of article 444.
When action for 
average loss is not 
maintainable.
451.   No action for general average can be brought if such
average does not exceed one  per centum  of the joint value of the
vessel and cargo, and no action for particular average can be
brought if such average does not exceed one  per centum  of the
value of the thing damaged.
Sub-title II
O F  J ETTISON AND  A VERAGE  C ONTRIBUTION
Jettison.
enemy, the master deems it his duty, for the safety of the vessel, to
throw anything overboard, or to cut away the masts, or to abandon
the anchors, he is bound to consult the parties interested who may
be on board the vessel and the principal members of the crew.
(2) If there is a difference of opinion, the opinion of the master
shall prevail.
Things to be 
thrown first.
453.   The things least useful, the heaviest, and the least
valuable, shall be the first to be thrown overboard.
Deliberation to be 
reduced into 
writing.
454. (1) The master shall, as soon as possible, draw up a
statement of the deliberation as to the jettison.
(2) The statement shall indicate the grounds on which it was
decided to make the jettison, and shall mention the goods thrown
overboard or damaged; it shall include the names of those who
agreed and of those who disagreed with the master; and it shall be
copied in the log-book.
Statement of losses 
and damage.
455.   The statement of the losses and damage shall be made at
the place of discharge of the vessel.
66               CAP. 13. ]               COMMERCIAL CODE
How things thrown 
overboard are 
valued.
456.   Goods thrown overboard shall be valued according to the
market price at the place of discharge; their nature and quality shall
be proved chiefly by the bills of lading and invoices, if any.
Adjustment of 
average loss.
457.   The apportionment of the losses and damages shall be
made on the goods thrown overboard and on those saved, on the
vessel and on the freight, in proportion to their value at the place of
discharge.
Where quality of 
goods is not truly 
stated.
458. (1) In cases where the quality of the goods has not been
truly described in the bill of lading, if the goods are found to be of
greater value than that stated, they shall, if saved, contribute
according to their valuation; but, if lost, they shall be paid for
according to the quality as stated in the bill of lading.
(2) If the goods are found to be of an inferior quality to that
stated in the bill of lading, they shall, if saved, contribute on the
basis of the quality shown in the bill of lading, but, if jettisoned or
damaged, they shall be paid for according to their value.
Ammunition, 
victuals, etc., do 
not contribute to 
general average.
459. (1) Ammunition, victuals, the effects of the crew, and the
wearing apparel of the passengers do not contribute to general
average.
(2) The value of such things, however, if they are jettisoned,
shall be paid for by a contribution on all the other things.
Goods for which 
there is no bill of 
lading.
460.   Goods for which there is no bill of lading, nor a
declaration of the master, are not paid for, if jettisoned, but shall
contribute, if saved.
Deck-cargo. 461. (1) Goods carried on deck shall contribute, if saved; if
they are jettisoned, or damaged by the jettison, no claim for
contribution can be made by the owner thereof, who shall, however,
have a right of recourse against the master, where the latter is liable
according to law.
(2) The provisions of this article shall not apply in the case of
voyages between Malta and Sicily, or between Malta and Tripoli or
Tunis, or in the case of goods which it is customary to carry on
deck.
Where jettison 
does not save 
vessel.
462.   If the jettison does not save the vessel, there shall be no
contribution, and the goods which have not been jettisoned, and
which have been saved, shall not be liable to pay for the things
jettisoned, or to make good the damage sustained by other goods.
Where the vessel is 
saved by the 
jettison, but is 
afterwards lost.
463.   If the jettison saves the vessel and if, in prosecuting her
voyage, she should be afterwards lost, the effects saved shall
contribute towards the jettison, according to their value in the
condition in which they may be found, after deducting salvage
expenses.
Damage sustained 
after the jettison.
464. (1) Goods jettisoned do not, in any case, contribute to the
payment for any damage which the goods saved sustain after the
jettison.
(2) The cargo does not contribute to the payment of the vessel
which is lost or has become unseaworthy, except in the cases
   COMMERCIAL CODE       [ CAP. 13.             67
mentioned in article 444.
Goods contribute 
to repair of vessel 
damaged for 
saving them.
465.   Where the vessel has been cut open to extract the goods,
such goods shall contribute to the repair of the damage caused to
the vessel.
No contribution by 
goods put into 
boats.
466.   Where the vessel is lost with the remainder of the cargo,
there shall be no claim for contribution against goods put into boats
to lighten the vessel, even though such goods arrive in safety.
Where goods 
jettisoned are 
recovered.
467.   Where, after the apportionment of the contribution, the
goods jettisoned are recovered by their owners, such owners must
return to the master and to the interested parties what they received
out of the contribution, deducting the damages caused by the
jettison, and the expenses of recovering the goods.
Owner of goods 
not to contribute 
beyond value 
thereof.
468.   The owner of the goods can in no case be called upon to
contribute to general average beyond the value of the goods at the
time of their arrival.
Title V
O F  P RIVILEGED  D EBTS ON  S HIPS AND OTHER  S EA-GOING 
V ESSELS
Articles 469 to 476, both inclusive, repealed by: XXXVII.
1988.41.
PART III
O F  B ANKRUPTCY
Title I
O F THE  D ECLARATION OF  B ANKRUPTCY
Definition.
state of bankruptcy.
Declaration in 
court. 
Amended by: 
XXIV.1995.362.
478. (1) The trader or his lawful representative can, on the
suspension of payments, make a declaration thereof in the Civil
Court, First Hall.
(2) In case of the bankruptcy of a partnership  en nom collectif  the
declaration must contain the name and the place of residence of
each of the partners jointly and severally liable.
Contents of 
declaration.
479.  The declaration of the trader must contain his name and
surname, and must state the nature of the business carried on by
him, the name, surname and other particulars of each of his
creditors together with their place of residence, and the quality and
nature of the debts.
Production of 
books. 
Amended by: 
XXIV.1995.362.
480.  On making the declaration mentioned in the foregoing
articles, the trader shall, at the same time, file in the Civil Court,
First Hall, all his commercial books and papers.
68               CAP. 13. ]               COMMERCIAL CODE
Summoning of 
creditors.  
Amended by: 
XXIV.1995.362.
481.  Where a trader has presented any such declaration, the
registrar shall, by letter, call upon the creditors mentioned in the
declaration to appear before the Civil Court, First Hall, there to
show cause why their debtor should not be declared to be in a state
of bankruptcy, and in order that curators may be appointed. The
registrar shall cause the declaration to be published, by means of a
notice containing an abstract of the same, in the Government
Gazette and in one or more newspapers.
Declaration of 
bankruptcy on 
demand of creditor. 
Amended by: 
XIII.1983.5; 
XXIV.1995.362.
482. (1) It shall also be lawful for any creditor, whether the
debt owing to him is a commercial debt or otherwise, and even
though such debt has not yet fallen due, to proceed summarily
before the Civil Court, First Hall, against the debtor or his lawful
representative, demanding a declaration that such debtor is in a
state of bankruptcy.
Declaration may 
not be sought by 
son against father 
or  vice versa , etc.
(2) A declaration of bankruptcy may not be sought by a son
against his father, or by a father against his son, or by one spouse
against the other.
When declaration 
may be sought 
after death of 
trader.
(3) The bankruptcy of a trader can be declared after his death,
if prior to his death he had suspended payment; in such case the
declaration of bankruptcy cannot be demanded by the creditors
except within three months of the death of the debtor.
Creditor 
demanding 
adjudication of 
bankruptcy to give 
security.
(4) In the case of a demand for a declaration of bankruptcy as
provided in this article, the party making the demand shall,
simultaneously with the demand, give security in an amount not
exceeding two hundred liri, by way of penalty, in favour of the
party against whom the demand is made, for the due prosecution of
the case without delay and the substantiation of his claim; in
default whereof, it shall be lawful for the court to order the amount
of the security to be paid, in whole or in part, to the party in whose
favour such security has been given:
 Provided that such payment shall not operate as a bar to an
action against the plaintiff for damages and interest arising from
such proceedings.
Where no funds 
exist in estate of 
bankrupt.
483. (1) If, where no funds exist in the estate of the bankrupt,
the creditor on whose demand the bankruptcy has been declared,
neglects to sue out, at his own expense, such acts and proceedings
as are necessary in order to arrive at the ranking of the creditors, it
shall be lawful for any other creditor, or even for the bankrupt
himself, to sue out such acts or proceedings.
Reimbursement of 
expenses incurred 
by creditor.
(2) All necessary expenses incurred in bankruptcy proceedings
shall be repaid to the creditor disbursing them, as a first charge out
of the first moneys received on account of the estate in preference
to any other debt.
Precautionary acts. 
Amended by: 
XXIV.1995.362. 
484. (1) Precautionary and conservatory acts against the
property or person of the debtor can be sued out by the creditors by
the same process as the law prescribes for the issue of any act or
warrant in security of any other debt, having regard to the nature
and quality of the debt.
   COMMERCIAL CODE       [ CAP. 13.             69
Temporary release 
of bankrupt. 
(2) But a bankrupt who has been arrested at the suit of any
creditor or who has withdrawn to his house from fear of being
arrested, can apply to the Civil Court, First Hall, for his temporary
release for a period of six months which may, at the discretion of
the court, be extended for just cause. The court shall decide the
matter upon a summons against the curators and the creditors at
whose suit the warrant of arrest was issued. Such temporary
exemption of the bankrupt from personal molestation shall have
effect even as regards the creditors and other interested parties who
have not been summoned.
(3) Such temporary release shall be granted where it is not
shown that there has been deceit or fraud on the part of the
bankrupt. But it shall be open to the creditors, by writ of summons,
to insist on the arrest of the bankrupt on proof of any deceitful or
fraudulent act on his part. The court may also, of its own motion,
order, during the course of the proceedings, the temporary arrest of
the bankrupt, if there be against him any grounded presumption of
deceit or fraud.
Acts in fraud of 
creditors are void 
or voidable.
485. (1) Every act transferring property, whether corporeal or
incorporeal, including any renunciation of any succession
whatsoever or of an acquired prescription, and every obligation
incurred or other act made by the bankrupt under a gratuitous title
for the purpose of defrauding his creditors, shall be null and void as
regards the body of creditors, of whatever kind they may be, even
though the parties interested be in good faith.
(2) Every act of the same kind and every obligation, act or
payment made or incurred under an onerous title can be annulled if
there be fraud also on the part of the party interested.
(3) Any such acquisition, obligation, act or payment shall be
deemed to be fraudulent as regards the party interested, if it is
proved that such party knew of the bankruptcy or of the existence
of circumstances giving rise to a declaration of bankruptcy.
Bankrupt is 
dispossessed of 
administration of 
property.
486. (1) From the date of the declaration of bankruptcy made
by the trader himself or, as the case may be, from the date of the
judgment declaring the bankruptcy, the bankrupt is  ipso jure
dispossessed of the administration of all his property, whether
corporeal or incorporeal, and whether relating to his business or
not.
(2) Saving any provision to the contrary of the donors or
testators, everything that devolves on the debtor after the
bankruptcy shall, when and as the same so devolves, fall under
such dispossession, subject, however, to the charges on the
property so devolved and to a proportionate allowance for daily
maintenance.
Debts owing by 
bankrupt not yet 
due, become 
exigible on 
declaration of 
bankruptcy.
487.   Debts owing by the bankrupt, not yet fallen due, even if
privileged, secured by pledge, or hypothecary, become exigible
upon the declaration of bankruptcy made by the trader himself or
upon the judgment of the court declaring the bankruptcy.
70               CAP. 13. ]               COMMERCIAL CODE
Title II
O F THE  R IGHTS AND  D UTIES OF THE  C URATOR OF A  B ANKRUPT
Appointment of 
curators.
488.   The court shall in and by the judgment declaring the
bankruptcy, whether the proceedings were taken upon the
declaration of the bankrupt himself or upon the demand of the
creditors, appoint one or more curators to exercise the functions
assigned to them under this Part.
Qualifications. 489.   The curators to be appointed by the court must be persons
whom the court deems fit faithfully to discharge the duties of their
office, even though they be creditors or relations of the bankrupt.
Publication of 
abstract of 
judgement in 
Gazette.
490.   The curators shall cause a notice containing an abstract of
the judgment declaring the bankruptcy to be published in the
Government Gazette and in one or more newspapers.
Removal of 
curators.
491.   The court may, at any stage of the proceedings, either of
its own motion or upon the demand of one or more creditors or of
the bankrupt, remove the curators. No appeal shall lie against such
decision. In case of removal, new curators shall be appointed.
Property to vest in 
curators.
492. (1) The curators shall not exercise any of their functions
until they have taken the oath that they will truly and faithfully
discharge the duties assigned to them.
(2) Upon the taking of such oath, the possession of all property
and all rights of any kind whatsoever belonging to the bankrupt,
other than the right of nomination to any vacant ecclesiastical
benefice, as well as all rights and property which he may acquire
until his discharge, shall vest in the curators.
(3) The curators shall be deemed to be officers of the court, and
as such they are subject to the orders of the same.
Seizure of 
property. 
Amended by: 
XXIV.1995.362. 
493.   If the property of the bankrupt, including his books and
papers, have not already been secured upon the demand of some
creditor, the curators, as soon as they have been sworn, shall apply
to the judge of the Civil Court, First Hall, for the issue of a warrant
of seizure. In the case of bankruptcy of a partnership  en   nom
collectif ,   the warrant of seizure shall be executed not only at the
principal offices of the partnership, but also at the residence of each
partner.
Books open to 
inspection.
494.   The books and papers of the bankrupt shall be open to
inspection by all the parties interested, and, by permission of the
judge, they may be delivered, wholly or in part, to the curators.
Collection of 
moneys.
495.   The curators shall receive all sums due to the bankrupt.
The receipts to be given by the curators shall be viséd by the
registrar who shall keep an abstract thereof; otherwise they shall
not have the effect of discharging the debtors. The curators shall
take possession of every other thing which is still in the possession
of the bankrupt or belongs to him.
Sale of perishables. 496.   The curators shall sell, by means of a licensed auctioneer,
such goods and merchandise as are perishable, after stating their
reasons to the judge and obtaining his authority.
   COMMERCIAL CODE       [ CAP. 13.             71
Sale of non-
perishables.
497.   Non-perishable merchandise cannot be sold by the
curators, before the proceedings relating to the composition or
arrangement provided for in the following articles have taken
place, except in pursuance of a judgment of the court upon a writ of
summons issued against the parties interested.
Curators may 
continue business.
498. (1) It shall be lawful for the curators, with the authority
of the judge, to continue to carry on the business of the bankrupt,
where they are of opinion that the continuation of such business
will afford a means of re-establishing the bankrupt’s affairs, or of
increasing his assets for the benefit of the creditors.
(2) The judge shall, when granting such authority, give such
directions as he considers most advantageous in the interest of the
bankrupt and of his creditors:
 Provided that if any creditor shall at any time make opposition
to such authority, it shall be in the power of the court, on just cause
being shown, to withdraw the authority, after hearing the curators
and the bankrupt.
Sum of money 
which curators 
may keep.
499.   The curators can, at the discretion of the judge, keep such
sum as the judge shall determine in order to meet necessary
expenses. All other moneys shall be paid by the curators into the
registry of the court.
Action against 
curators.
500.   From the time the curators enter upon the duties of their
office, all civil actions commenced before the bankruptcy against
the person and property of the bankrupt can only be prosecuted
against the curators. After the bankruptcy, no action can be brought
except against the curators.
Duties of curators.
office, must take every necessary step for the preservation of the
rights of the bankrupt as against his debtors; they shall also cause
to be registered in the Public Registry any hypothec affecting the
property of the debtors of the bankrupt if he has failed to do so.
(2) It shall be the duty of the curators to sue for the payment of
the debts, of whatsoever kind, due to the bankrupt, for the benefit
of the creditors: But it shall not be lawful for the curators to make
any compromise or refer any dispute to arbitration, without the
consent in writing of the majority in value of the creditors of the
bankrupt, and the authority of the judge.
Making up of 
inventory.
502. (1) Within the period of one month from the judgment
declaring the bankruptcy, the curators shall, notwithstanding any
appeal from such judgment, make up an inventory of the bankrupt’s
property.
(2) Such period may for just cause be enlarged.
(3) Every creditor has a right, and the bankrupt is bound to
assist in the making up of the inventory.
Contents of 
inventory.
503.   The inventory shall contain a true list together with a
description and valuation of all the bankrupt’s property, movable
and immovable, a statement of the debts owing to or due by the
bankrupt, a statement of his profits and losses, and a statement of
72               CAP. 13. ]               COMMERCIAL CODE
the expenses.
Power of court.  
Amended by: 
XXIV.1995.362.
504.   It shall be in the power of the Civil Court, First Hall,
either of its own motion or on the demand of the curators or of one
or more of the creditors, to compel the bankrupt and any other
person to give on oath all such information as it may deem
necessary or useful in the interest of the body of creditors or for the
making up of the inventory.
Title III
O F THE  R IGHTS OF  R ECOVERY
Recovery of bills 
of exchange, etc.
505.   It shall be lawful, in case of bankruptcy, to recover all bills
of exchange and other documents of title yet unpaid which are
found in kind in the possession of the bankrupt at the time of the
bankruptcy, whenever such bills or documents of title shall have
been endorsed by the owner for collection for his own account.
Recovery of goods. 506. (1) It shall likewise be lawful to recover goods delivered
to the bankrupt by way of deposit or to be sold on account of the
owner, so long as the same exist in kind, wholly or in part.
(2) It shall also be lawful to recover the price or part of the
price of such goods, which has not been paid in cash or otherwise,
or set off in account current between the bankrupt and the buyer.
Recovery of goods 
sold to bankrupt.
507. (1) Goods sold to the bankrupt or forwarded for his
account may be recovered, so long as they are in his possession. 
(2) Nevertheless, such right of recovery may not be maintained
in cases where, before their arrival, the goods have been, without
fraud, sold on invoices or bills of lading signed by the party
forwarding the goods.
(3) The party recovering the goods shall be bound to return to
the estate the sums received by him on account, and all advances
made in respect of freight, commission, insurance or other
expenses, and must pay what remains due in respect of such
charges.
Goods not yet 
delivered to 
bankrupt.
508.   It shall be lawful for the seller to retain the goods sold by
him to the bankrupt, but not yet delivered to the bankrupt or not yet
forwarded to him or to a third party on his behalf.
Curators ’  power to 
withdraw goods.
509.   In the cases mentioned in the last two preceding articles,
the curators shall have power, with the authority of the judge, to
take the goods on paying to the seller the price agreed upon
between him and the bankrupt.
   COMMERCIAL CODE       [ CAP. 13.             73
Title IV
O F THE  P ROOF OF  D EBTS AGAINST THE  B ANKRUPT’S  E STATE
List of creditors.
within three days, make a list of all the creditors.
(2) Such list shall be filed in the registry, and the registrar
shall, upon an order of the judge, summon a meeting of the
creditors by means of a notice to be published in the Government
Gazette and in one or more newspapers.
Meeting of 
creditors.
(3) The meeting of the creditors shall take place in the presence
of the judge on the day and at the place fixed in the notice.
Application of 
creditor.
511.   Every creditor shall, at such meeting, or on another
subsequent day, as the judge shall direct, present an application for
admission of his debt, and shall produce and specify the documents
in support of the same. A  procès-verbal  shall be drawn up
containing the pleas set up by the curators or by the creditors.
Person interested 
can assist in the 
examination of 
claims.
512. (1) Any person, although his debt has not been proved
and admitted, may, on summarily showing that he is interested,
assist in the examination of the claims of the other creditors and set
up pleas in regard thereto.
(2) In cases where one of the curators opposes or claims any
right in his own name, the interest of the body of creditors shall be
defended by the other curator or curators not being objectors or
claimants; but if everyone of the curators shall, in his own name,
oppose or claim some right, the body of creditors shall, in this
instance and for this purpose only, be represented by some other
person whom the judge shall, by decree, appoint, without any other
formality.
False claim.
Amended by: 
XXIV.1995.362.
513.   If any person wilfully makes any false claim or claims a
larger sum than that actually due to him, he shall be liable to be
sued before the Civil Court, First Hall, for the payment of twice the
amount falsely claimed, for the benefit of the estate of the
bankrupt.
Examination of 
claims.
514.   Upon the presentation of the creditors’ applications, the
judge shall proceed to the examination of the claims. The decree of
the judge relating to the examination of the claims shall contain a
reference to the documents substantiating the claims, and shall state
the place of residence of the creditors and the amount admitted.
Proceedings after 
examination of 
claims. 
Amended by: 
XXIV.1995.362.
515. (1) As soon as the decree mentioned in the last preceding
article is prepared, it shall be deposited in the registry and
published by means of a notice in the Government Gazette and in
one or more newspapers. Notice of such deposit shall be given
individually to the creditors who made application for the proof of
their claims.
(2) If such decree be not impeached within the period of eight
days after notice of the deposit, it shall  ipso jure  be deemed to be
accepted.
(3) The decree may be impeached by writ of summons before
74               CAP. 13. ]               COMMERCIAL CODE
the Civil Court, First Hall.
List of creditors 
failing to appear.
516.   Upon the deposit of such decree in the registry, the
curators shall draw up and file in the same registry a note
containing the names of the creditors who failed to appear.
Title V
O F THE  C OMPOSITION OR  S CHEME OF  A RRANGEMENT
Meeting of 
creditors after 
decree relating to 
examination of 
claims.
517. (1) Within ten days after the deposit of the decree relating
to the examination of the claims, the registrar shall call a meeting
of the creditors whose claims have been admitted.
(2) Such meeting shall be held on the day and at the time fixed
by the judge who shall preside at such meeting.
Bankrupt to be 
present.
518. (1) The bankrupt shall also be summoned to such
meeting. He cannot attend by proxy except for reasons approved by
the judge.
(2) The judge shall examine the instruments of proxy of those
who appear on behalf of absent creditors. He shall cause the
curators to give, in his presence, an account of the state of the
bankruptcy and of everything that has taken place.
(3) The bankrupt may, in all cases, be heard.
Terms of 
composition.
519.   At such meeting, it shall be considered whether the case
admits of a composition. The bankrupt shall propose the terms of
the composition, and the creditors shall have at least eight days to
consider the proposal.
Taking of votes. 520.   At the expiration of the eight days, the creditors shall meet
again in the presence of the judge, and their votes shall be taken.
Composition to be 
agreed upon by 
majority in number 
and three-fourths 
in value of 
creditors.
521. (1) The registrar shall draw up   a  procès verbal  of the
proceedings and of the resolutions passed at such meetings.
(2) Every creditor can give his vote, and the final agreement
shall not be deemed to be approved except by the concurrence of a
majority in number and three-fourths in value of the creditors who
have proved.
(3) Creditors having a hypothec registered in the Public
Registry or holding a pledge cannot vote on the resolution relating
to the composition.
Where majority of 
creditors agreeing 
to composition do 
not represent three-
fourths of sums 
admitted.
522. (1) If the majority of the creditors present agree to the
composition, but their claims do not represent three-fourths of the
sums admitted to be due by the bankrupt, the deliberation shall be
adjourned for another eight days, as a last adjournment.
(2) Tutors or curators of creditors cannot consent to the
composition without the authority of the judge of the Civil Court,
Second Hall, but the intervention of the judge shall not be requisite
at the execution of the composition.
   COMMERCIAL CODE       [ CAP. 13.             75
New scheme of 
arrangement can be 
proposed.
(3) If the composition is not agreed upon, it shall be lawful for
any of the creditors, at any other stage of the proceedings, to
propose a fresh scheme of arrangement, and in such case, the judge
shall grant a sufficient time for deliberating.
Composition to be 
approved by judge.
523. (1) If all the creditors agree to the composition, its
approval by the judge shall be sufficient to make it valid. But if the
composition is agreed to only by three-fourths in value of the
creditors, the curators or the bankrupt shall, within the period of
eight days, apply to the court for the approval thereof, by writ of
summons against the creditors opposing the composition or failing
to attend the meeting prescribed in article 517.
(2) In the absence of proof by the defendants of any deceit or
gross misconduct, the court shall approve the composition.
(3) A composition duly approved shall be binding on all the
creditors.
Rehabilitation.
shall be deemed to be  ipso jure  rehabilitated.
Effects.
restoring to the bankrupt the administration of his property, under
the conditions, if any, embodied in the instrument of composition.
Stipulations which 
may be validly 
made in instrument 
of composition.
(3) Any stipulation contained in the instrument of composition,
not being contrary to law, shall be valid. The instrument of
composition may provide for the selection of one or more persons
for the purpose of watching over the carrying out of the
composition, of assisting at the sale of property if any such sale
takes place, and of securing the distribution of the proceeds
amongst the several creditors.
(4) A stipulation that the bankrupt shall have no power to do
any act, whether of administration or of alienation, without the
consent of one or more persons appointed by the creditors, shall be
a valid stipulation, and shall have effect even against third parties
who have contracted in good faith with the bankrupt alone.
Where 
composition 
provides for the 
abatement of part 
of debt.
525. (1) If the composition provides for the abatement of a
part of the debt, the bankrupt shall be discharged, even as to his
future property, from the part abated:
Provided that such abatement and any time granted to the
bankrupt for payment shall not operate in favour of any other
person, being a co-debtor or surety jointly and severally liable with
the bankrupt.
Effect of breach of 
composition 
arrangement.
(2) The default in making payment according to the terms of
the composition, shall be considered as a fresh bankruptcy, if the
debtor continues to carry on trade.
Right of action of 
creditors against 
co-debtors.
526.   Notwithstanding the composition, the right of action of the
creditors for the whole amount of their debts against the co-debtors
or sureties jointly and severally bound with the bankrupt shall
remain unimpaired, even though such creditors may have assented
to the composition.
76               CAP. 13. ]               COMMERCIAL CODE
Rendering of 
accounts by 
curators.
527. (1) The curators shall, within four days after the approval
of the composition, render their final account; and they can be
compelled to render such account at the instance of the bankrupt or
of any other interested party.
(2) The curators shall then, within the period of eight days,
deliver to the bankrupt or to the person appointed under the
composition all the bankrupt’s property, books, papers and other
effects.
(3) Upon such delivery, the functions of the curators shall
cease.
Title VI
O F THE  R ANKING OF  C REDITORS
If composition is 
not approved.
528.   If the composition is not approved, the curators shall,
within the period of one month, proceed to the sale of the
bankrupt’s property, under the authority of the court.
Property to be 
retained by 
bankrupt.
529.   In all cases, the bankrupt and his family shall be allowed,
with the approval of the judge, to retain the wearing apparel and
other movable effects necessary for their personal use, regard being
had to the condition and former circumstances of the bankrupt.
Redemption of 
pledges.
530. (1) The curators are authorized to redeem pledges, for the
benefit of the estate of the bankrupt, upon payment of the
respective debts.
(2) If the pledge is not redeemed by the curators, and is sold by
the creditor for a price exceeding the debt, the surplus shall be
collected by the curators; if the price realized is less than the debt,
the creditor who had the pledge may prove and compete for the
difference.
Ranking of 
creditors. 
531. (1) Following the deposit of the decree relating to the
examination of the claims, the judge shall proceed to the ranking of
the creditors.
(2) Such ranking shall set forth the order in which the creditors
shall be paid from the proceeds of the property sold, from the
revenue of property attached by a garnishee order, and from any
other funds which may have remained, or may at any time come in
the possession of the curators, or otherwise exist in favour of the
estate of the bankrupt, even though such moneys may not have been
deposited in the Registry of the Court.
Presentation of 
application by 
creditors.
532.   For the purposes of such ranking, the creditors shall, by
letter of the registrar, be called upon to present in the registry,
within fifteen days, the requisite demand, by means of an
application, together with such other documents as may be
necessary for the ranking.
Consideration of 
claims.
533.   After the presentation of the applications mentioned in the
last preceding article, the registrar shall, by letter, summon the
creditors, the curators and the bankrupt to appear before the judge
   COMMERCIAL CODE       [ CAP. 13.             77
on the day appointed for the purpose, in order that their respective
claims may be dealt with.
Allowance to 
bankrupt for 
maintenance.
534. (1) Where there is no presumption of the bankruptcy
being fraudulent, the bankrupt shall be entitled to an allowance out
of his own property.
(2) The curators shall propose the amount of the allowance, and
the judge shall fix the same having regard to the needs and the
number of the bankrupt’s family, and to the extent of the loss which
will thereby be occasioned to his creditors.
Privileged 
creditors.
535.  Creditors having pledges, privileges or hypothecs shall be
ranked according to the law for the time being in force.
Creditors not 
appearing after 
intimation.
536.  The creditors who fail to appear after the intimation
prescribed in article 532 shall not be taken into account in the
ranking of the creditors: but none of the creditors appearing after
the said intimation shall receive payment of his claim unless he
gives sufficient security, to the satisfaction of the curators, that he
will contribute ratably in favour of those creditors who shall have
failed to appear or are absent, in the event of their appearing within
the period of one year from the day on which such security has
been given.
No interest due 
from date of 
bankruptcy.
537.  In all cases of bankruptcy, no interest on the sums due by
the bankrupt shall be allowed from the date of the declaration of
bankruptcy made by the trader himself or as the case may be from
the date of the judgment declaring the bankruptcy.
Title VII
O F THE  R EHABILITATION AND  D ISCHARGE
Rehabilitation and 
discharge.
538. (1) When the ranking of creditors has been definitely
settled, the registrar shall, by letter, call upon the creditors so
ranked to appear on the day appointed by the judge for the
examination of the accounts of the curators, and for considering
whether the bankrupt ought to be rehabilitated to trade.
(2) The rehabilitation shall be granted by a decree of the judge,
provided there be no proof of any deceit or fraud on the part of the
bankrupt.
(3) The rehabilitation has the effect of discharging the
bankrupt, with respect both to his person and to his after-acquired
property, from all debts that could at any time previous to the
declaration of bankruptcy have been claimed against him.
Fraudulent 
bankruptcy.
539. (1) The benefits granted by law in favour of bankrupts
shall not apply in the case of fraudulent bankruptcy.
(2)A bankrupt shall be deemed to be a fraudulent bankrupt in
each of the cases following:
( a ) if he makes an untrue statement in respect of the debts
owing to or from him, or in respect of his insolvency;
78               CAP. 13. ]               COMMERCIAL CODE
( b ) if he has simulated any expenses or losses or if he fails
to give a satisfactory explanation of the manner in
which his receipts have been disposed of;
( c ) if he has concealed or removed any sum of money, or
any debt due to him, goods, merchandise or other
movable effects;
( d ) if he has made fictitious sales, transactions or
donations;
( e ) if he has simulated collusive debts between himself
and fictitious creditors, by simulated writings or by
declaring himself debtor, without consideration or
cause, in any public or private act;
( f ) if he has concealed or destroyed his books, documents
or other papers relating to his accounts.
Cases where trader 
may be adjudged a 
fraudulent 
bankrupt.
540. A bankrupt may in the cases following be adjudged a
fraudulent bankrupt, unless he sufficiently proves that he had no
intent to defraud - 
( a ) if he has not kept books or if his books do not show the
true state of his assets and liabilities;
( b ) if, on being lawfully summoned for examination, he
fails to attend;
( c ) if he has not aided in the making up of the inventory.
Part IV
O F  P RESCRIPTION AND  I NADMISSIBILITY OF  A CTION IN 
CERTAIN  COMMERCIAL   M ATTERS, OF THE  J URISDICTION OF 
THE  C IVIL  C OURT, FIRST HALL, AND OF  C OMMERCIAL  F EES
Title I
O F  P RESCRIPTION AND  I NADMISSIBILITY OF  A CTION IN 
CERTAIN  C OMMERCIAL  M ATTERS
Times to be 
peremptory.
541.  All times fixed by any express provision of this Code for
the exercise of any action or right of recourse arising from
commercial acts, are peremptory; and the benefit of the  restitutio in
integrum  by reason of any title, cause or privilege whatsoever shall
not apply.
Actions barred by 
the lapse of five 
years.
542.  Saving the provisions contained in articles 238, 239 and
263, actions arising from bills of exchange or from promissory
notes shall be barred by prescription by the lapse of five years from
the day of their maturity, and actions arising from drafts or cheques
on bankers or cashiers shall be barred by prescription by the lapse
of five years from their date.
Actions arising 
from bottomry 
contracts, etc.
543.   Actions arising from contracts of loan on bottomry or from
contracts of insurance shall be barred by prescription by the lapse
of five years from the day on which the same could have been
exercised.
   COMMERCIAL CODE       [ CAP. 13.             79
Actions for freight, 
etc.
544. The following actions shall be barred by prescription by
the lapse of the times stated hereunder:
( a ) actions for payment of freight, by the lapse of one year
from the completion of the voyage;
( b ) actions for the payment of victuals supplied to seamen
by order of the master, by the lapse of one year from
the day of such supply;
( c ) actions for payment of timber and other things
necessary for the construction, equipment and
provisions of a ship, by the lapse of two years from the
date on which such timber or other things have been
supplied;
( d ) actions for payment of wages of workmen and for
work done, by the lapse of one year from the
completion of their work or the delivery of the work;
( e ) actions for the delivery of goods, by the lapse of one
year from the arrival of the vessel.
Actions that are 
inadmissible.
545. No action shall lie -
( a ) against the master and the insurers for damage
occasioned to the goods, if such goods have been
received without protest, and the damage was visible;
( b ) against a freighter for average, if the master has
delivered the goods and received the freight without
making a protest;
( c ) for damages occasioned by collision of vessels when
the same happens in a place in which the master could
institute proceedings, unless the master made his
protest.
Prescription to run 
against minors, etc.
546.   Save where the law expressly provides otherwise, the
prescriptions established in this Code shall run against minors and
persons interdicted, saving their right of relief against the tutor or
curator.
Title II
O F THE  J URISDITION OF THE  C IVIL  C OURT,  F IRST  H ALL
Commercial 
jurisdiction.  
Amended by: 
XXIV.1995.362.  
Cap.12.
547.   Commercial jurisdiction shall be exercised by the Civil
Court, First Hall, in accordance with the provisions contained in
the Code of Organization and Civil Procedure.
Controversies of a 
commercial nature.
548. The following controversies are of a commercial nature:
( a ) all controversies relating to obligations and contracts
between traders, unless it appears from the act that the
transaction is of a purely civil nature;
( b ) all controversies relating to acts of trade between
persons whomsoever.
80               CAP. 13. ]               COMMERCIAL CODE
Other matters 
cognizable by Civil 
Court, First Hall. 
Amended by: 
XXIV.1995.362.
549.   The Civil Court, First Hall, shall also take cognizance -
( a ) of actions against agents or other persons
commissioned by merchants, or their subordinates in
regard only to transactions carried out in the ordinary
course of the business of their principal; and of actions
by the former against the principal;
( b ) of all matters relating to bankruptcy in accordance
with the provisions contained in this Code.
Title III
O F  C OMMERCIAL  F EES
Commercial fees, 
how regulated.
550.   Commercial fees shall be regulated according to the
Schedule hereto.
Power of Minister 
responsible for 
justice to establish 
fees. 
Amended by: 
L.N. 4 of 1963; 
XXXI.1966. 
551.   The Minister responsible for justice may, by notice in the
Government Gazette, after hearing the Chamber of Commerce,
amend or make additions to the Schedule of fees referred to in the
last preceding article.
G ENERAL  P ROVISION
Contrary customs 
to be inoperative.
552.   Any law or custom contrary to or inconsistent with the
provisions of this Code shall have no effect.
   COMMERCIAL CODE       [ CAP. 13.             81
Schedules 
contained in s.1 of 
Ord.II. of 1898, 
consolidated. 
Amended by: 
XIII.1983.4. 
SCHEDULE
[A R T I C L E S  550-551]
PART I 
COMMISSIONS AND FEES
Commissions
2 %
2 1/ 8 %
2%
¼%
½%
On the purchase and sale of goods.
On the purchase of goods with the principal’s
funds in hand ...............................................
On the purchase of goods and on the drawing
for the value thereof .....................................
On the sale of goods .......................................
On attempted sale of goods -
if the value be above Lm500 .......................
if the value be Lm500 or less......................
On the purchase and sale of sailing - or steam-
ships (including brokerage), (from each
party) ........................................................... 1¼%
Banking Transactions
On drawing .................................................... 1/ 8  to ¼%
On remitting .................................................. 1/ 8 %
On accepting .................................................. 1/ 8 %
On negotiating ............................................... 1/ 8  to ¼%
On endorsement of bills of exchange .............. 1/ 8 %
N.B.- If the drawing and remitting, or the
accepting and negotiating refer to the same
transaction, the fee is only ..................................... ¼%
On the purchase or sale of public funds -
for funds quoted at above 75% of their
nominal value, - 
on the nominal value ....................................   1/ 8 %
82               CAP. 13. ]               COMMERCIAL CODE
for funds quoted at below 75% of their
nominal value,-
on the nominal value  .................................... 1 /16 %
On disbursements to travellers against letters
of credit ....................................................... ½%
On collection, payment, or negotiating of
coupons ....................................................... 1/ 8 %
On collection of bills of exchange and
remittances of the amount ............................ 1/ 8 %
On collection of moneys in account current
and remittance of proceeds, or payments
made on demand .......................................... 1/ 8 %
N.B. - The minimum rates above specified in the
cases where the rate is not definitely indicated,
apply to transactions the amount of which exceeds
Lm100.
Sailing-ship or Steamship Agency
To the freighter of a steamship or sailing-ship 2%
To the consignee, on the affreightment of a
sailing-ship or steamship, if he procured the
affreightment ............................................... 1%
On freights of importation, as per manifest,
both if the freight be payable at the port of
destination and if paid in advance ................ 2%
On procuring freights to steamships or sailing-
ships for exportation, as per manifest ........... 3%
On disbursements to steamships or sailing-
ships ............................................................ 2%
On disbursements to steamships or sailing-
ships if under average ................................. 2½%
On discharging and reloading, or on
reshipping of goods on sailing-ship or
steamship with or without average, -
if the value of the goods be under Lm2,000 ... ½%
if the value of the goods be above Lm2,000 .. ¼%
   COMMERCIAL CODE       [ CAP. 13.             83
On transhipment of packages - according to
the goods and the number of packages -
for each package  .......................................... 4m to 2c5
for bales or cases of textiles, -
for each bale or case  .................................... 10c
for iron, -  per ton  .......................................... 10c
On the sale by public auction of goods or
articles landed from sailing-ships or
steamships under average ............................. 2%
 Fees
For representing one or more persons before
courts of justice -
if the amount in litigation exceeds Lm 1,000-
in the court of first instance .................... 2%
in the court of second instance ................ 1%
if the amount in litigation is Lm 1,000 or less -
in the court of first instance ............................ 3%
in the court of second instance ........................ 2%
N.B. - If representation is in second instance
only, the fee is -
if the amount in litigation exceeds Lm1,000  2%
if it is Lm1,000 or less .................................. 3 %
On deposits in court as security for suits
(besides interest at 6% per annum) - 
for a period not longer than one year ............. 3%
for any further period not exceeding one year 2%
On receipt of telegrams for transmission
abroad  -
per telegram ................................................. 25c
On giving orders -
to steamships,  -  for each order  ..................... 50c
to sailing-ships, -  for each order  ................... 25c
84               CAP. 13. ]               COMMERCIAL CODE
On procuring orders, receiving and delivering
goods, adjusting accounts, procuring
acceptances, or collecting and remitting ....... 3%
for  del credere  on the sale of goods on credit  2%
On guarantees in favour of any person -  per
month .......................................................... ¼%
On guarantees in favour of any person,
accompanied by a deposit (besides ¼% per
month), interest, per annum, of .................... 6%
PART II
FEES OF PUBLIC BROKERS
On the sale and purchase of goods (from each
party) ........................................................... ½%
On the sale and purchase of goods of small
value, such as pozzolana, soda-ash,
firewood, mineral salts, and the like articles
(from each party) ......................................... 1%
N.B. - In the case of goods sold under discount,
the brokerage is due on the net amount of the
invoice.
On exchange of goods -  on the value of every
article  (from each party) .............................. 3 / 8 %
On the purchase and sale of any stock in
public funds to bearer -  on the real value
(from each party) ......................................... 1%
On the purchase and sale of foreign bills of
exchange, discount of bills in the market,
and of coupons -  on the real value  (from
each party) ................................................... 1%
On the purchase and sale of gold and silver
bullion, or of State or foreign coins - o n the
real value  (from each party) ......................... ½%
On whole or partial affreightment of sailing-
ships or steamships-  payable by the master  ... 2%
On affreightment of sailing-ships or
steamships  á la cueillette  (ship receiving
goods) ......................................................... 3%
   COMMERCIAL CODE       [ CAP. 13.             85
PART III
 FEES OF SURVEYORS
Lm c m
For a survey on the condition of a sailing-ship
or on the condition of the bottom   or
machinery of a steamship, with or without
average -
for the first survey ........................................ 2.10,0
for any further survey ................................... 1.05,0
For a survey on goods - 
if the value does not exceed Lm100 .............. 0.52,5
if the value is above Lm100 but does not
exceed Lm200 ............................................. 1.05,0
if the value is above Lm200 -
for the first survey ........................................ 2.10,0
for any further survey ................................... 1.05,0
For a survey, on board, on condition of the
cargo and stowage thereof -
for the first survey ........................................ 2.10,0
for any further survey ................................... 1.05,0
N.B. - All the said fees are due to each
surveyor and for attendances within the
Grand Harbour or within the Marsamxett
Harbour; for attendances outside the said
harbours, such fees shall be doubled. The
said fees also include the fee for the drawing
up of the report, but transport and other
expenses incurred by the surveyors in the
discharge of their duties, shall be refunded to
them, in addition to the fees above specified.
If the time employed by the surveyors outside
the said two harbours exceeds one day, and
their continual attendance should be required
beyond that term, - in addition to the
expenses incurred, for each day already
commenced .................................................. 5.25,0
On appraisement of a sailing-ship or
steamship, her tackle and apparel, - besides
the expenses incurred-
86               CAP. 13. ]               COMMERCIAL CODE
on the first Lm500 .......................................... 1%
on the second Lm500 ..................................... ¾%
on any further sum ......................................... ½%
