Malta hit with infringement proceedings as ECJ issues Opinion
The European Commission has launched infringement proceedings against Malta for allegedly breaching an EU regulation when it amended the Gaming Act to prevent the enforcement in Malta of foreign court rulings against Maltese gaming companies.
The Commission has issued a formal notice about proceedings against Malta over the "Bad Application of Regulation (EU) No 1215/2012 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters".
The regulation aims to ensure “free-circulation of judgements” and the “mutual recognition of judicial and extra-judicial decisions in civil matters”.
Malta was given time to address the Commission’s concerns before the case can proceed further. If Malta fails to adequately respond, the Commission may decide to bring the case before the European Court of Justice.
In the formal letter sent to the Maltese government, the EC said that Malta has failed to comply with EU regulation by imposing its courts an obligation to refuse recognition and enforcement of judgments issued by courts.
The EC added that Malta is discouraging foreign litigants from pursuing legal action in Maltese courts against Maltese gaming companies.
“The Commission considers that the Maltese legislation, by effectively shielding the online gaming sector from cross-border litigation, undermines the principle of mutual trust in the administration of justice within the Union,” the EC said.
The Maltese government has insisted that the law does not establish new or separate grounds for refusing the enforcement of judgments beyond those set in EU regulation.
It said it will provide a formal response to the Letter of Formal Notice within the stipulated two-month timeframe.
The Malta Gaming Authority also defended the law, arguing that it is in line with EU regulations and the principles set out by the European Court of Justice. It does not impose a blanket ban on enforcing European judgments against Maltese-licensed gaming companies, nor does it shield them from legal action in other EU courts.
In 2023, an Austrian law firm and a German lawyer filed a complaint with the Commission, accusing the Maltese government of undermining the rule of law in Europe.
Nationalist MEP Peter Agius expressed concerns about the Commission's infringement action, saying in a post on X that Malta needed to align with EU law as soon as possible.
Prime Minister Robert Abela had defended the law when he met Austrian Chancellor Karl Nehammer.
Earlier this year, two landmark rulings by the Maltese courts declared that Austrian courts cannot compel Malta-based gaming operators to compensate Austrian gamblers for their losses, even when Austrian courts had ordered the refunds.
Agius also asked the EC to address the “jungle” of third-party litigation funding (TPLF) that is funding legal action over gambling losses, with the aim of enforcing foreign judgments in Malta.
TPLF is when outside investors cover the legal costs of a case in exchange for a share of any winnings.
The MGA had previously accused German and Austrian law firms of “very aggressive advertising” to encourage customers of Maltese gaming companies who may have lost money to seek legal aid.
https://timesofmalta.com/article/eu-commission-launches-infringement-proceedings-malta-gaming-law.1111624#:~:text=The%20European%20Commission%20has%20launched,rulings%20against%20Maltese%20gaming%20companies.