On 30 October, the European Court of Justice received an opinion from Advocate General Anthony Michael Emiliou, which cast doubt on the robustness of Malta’s Article 56A in safeguarding operator assets across EU borders. Specifically, the opinion questioned whether this law might inadvertently expose operator assets, located outside Malta, to increased risk of being frozen by cross-border orders.
The case in question involves Mr Green, an operator owned by Evoke, which faced a legal challenge in Austria despite being licensed in Malta. An Austrian consumer, having lost €62,878 with Mr Green between January 2017 and April 2019, initiated legal proceedings claiming the contract with the operator was void. The Austrian courts ruled in favor of the consumer, ordering Mr Green to refund the stakes, including interest and costs.
Following the Austrian court’s decision, the plaintiff sought a European Account Preservation Order (EAPO) in February of the previous year to freeze Mr Green’s bank accounts in several EU countries, such as Ireland, Malta, Sweden, and Luxembourg. EAPOs are critical tools within the EU, designed to aid creditors in recouping debts by freezing a debtor’s bank accounts across member states.
Initially, the court dismissed the EAPO application citing a lack of “urgent need”. The decision raised concerns over whether Malta’s Article 56A could block such orders, as this provision within Malta’s gambling regulations aims to shield local licensees from legal actions initiated in other EU jurisdictions. The court also highlighted potential challenges in asset enforcement and the delay in filing the claim, suggesting that assets might be moved to evade enforcement.
Advocate General Emiliou emphasized that licensing in Malta does not guarantee immunity for operators against actions in other jurisdictions. He advised operators to maintain transparent records, resist dispersing or concealing assets post-judgment, and to respond promptly to legal claims to prevent successful preservation and enforcement actions abroad.
The timing of the EAPO filing was also scrutinized. Mr Green had ended its Austrian payment service provider arrangement in early 2021, a factor considered in the EAPO proceedings. The Advocate General’s opinion suggests that Article 56A may, in fact, present complications rather than protections, potentially leading to asset freezes for operators with holdings outside Malta.
This case amplifies the debate over Article 56A’s effectiveness and raises questions about its ability to shield operators from foreign judgments. EU states remain empowered to pursue EAPOs against operators, arguing that Article 56A’s protective stance may obstruct judicial processes.
The European Commission has echoed these sentiments, expressing concerns that Article 56A undermines judicial cooperation across EU member states. A letter from the Commission to the Maltese government in June criticized the amendment, suggesting it unjustly shields Malta-licensed operators from overseas legal challenges and could erode the principle of mutual trust in justice administration.
From another perspective, some industry observers argue that Article 56A is crucial for maintaining Malta’s position as a favorable jurisdiction for operators, helping to protect them from potentially hostile legal environments in other EU countries. They contend that without such protections, operators might face undue burdens in navigating differing legal landscapes.
However, the prevailing opinion from the EU and Advocate General suggests that the mutual trust required for cross-border legal processes could be compromised. This could lead to increased scrutiny on Maltese operators and potentially more stringent enforcement actions by courts in other EU states.
Ultimately, this ongoing legal discourse highlights the delicate balance between national regulatory autonomy and the overarching principles of EU-wide judicial cooperation. For operators, this means navigating a complex legal framework that demands not only compliance with local regulations but also a strategic understanding of the broader European legal environment.
4.8/5
