In Malta, commercial contracts routinely cross civil law and common law traditions. A European supplier invoking force majeure against a Maltese counterparty may find that the local courts apply doctrines shaped by Napoleonic codification rather than English common law instincts. The result is a legal setting where the written contract, the Civil Code, and a body of judicial interpretation all interact – sometimes in unexpected ways.
Force majeure and hardship in Malta are governed primarily by civil legislation derived from the Maltese Civil Code, which draws heavily on continental European codification. A party seeking relief must demonstrate that performance was rendered impossible – not merely more burdensome – by an event that was unforeseeable, external, and irresistible. Hardship, as a distinct concept, occupies a narrower and less settled position in Maltese law, and courts have approached it cautiously. The gap between what parties assume their contracts provide and what Maltese civil legislation actually supports can be significant.
This analysis examines the doctrinal foundations of force majeure and hardship in Malta, identifies where court interpretation diverges from the statutory text. Explores the practical implications for cross-border contracts involving European parties. Additionally, sets out a strategic approach for businesses managing disruption risk in this jurisdiction.
Doctrinal foundations: civil law roots in a mixed legal system
Malta's legal system is frequently described as a mixed jurisdiction. Its private law – including contract and obligations – derives from the civil law tradition, principally through codification modelled on the Napoleonic Code. Its procedural and public law layers carry strong common law influence, reflecting the island's colonial history. For force majeure and hardship analysis, the civil law dimension dominates.
Under Maltese civil legislation, the principle of cas fortuit ou force majeure (fortuitous event or force majeure) releases an obligor from liability when performance becomes impossible due to an event that the obligor could not foresee, resist, or prevent. The doctrine is not simply a creature of contract; it is rooted in the general law of obligations. This means a party may invoke it even where the contract is silent, provided the statutory conditions are met.
The core statutory elements are three. First, the event must be imprévisible – unforeseeable at the time of contracting. Second, it must be irrésistible – irresistible in the sense that no reasonable measure could have prevented its effects. Third, the event must be external to the obligor, meaning it cannot originate in the obligor's own conduct, sphere of risk, or enterprise. These three requirements operate cumulatively. The absence of any one defeats the claim.
Hardship – the situation where performance remains technically possible but has become so disproportionately burdensome as to destroy the original equilibrium of the contract – occupies a different and more contested position. Unlike force majeure, hardship does not appear in Maltese civil legislation as an independent ground for contract modification or suspension. The Civil Code does not contain a general imprévision clause of the type found in French law after its 2016 reform. A party relying purely on changed economic circumstances, without genuine impossibility, faces a considerably higher doctrinal threshold.
Practitioners in Malta note that this structural gap creates a recurring tension. Parties who have drafted their contracts under English law instincts – using hardship clauses as standard boilerplate – sometimes assume that the clause will be interpreted expansively. Maltese courts, applying civil law methodology, have been more restrained. The written clause may be enforced according to its terms, but where the contract is silent, statutory hardship relief is largely unavailable.
Competing court interpretations: where doctrine meets practice
The Maltese courts – principally the Qorti Ċivili tal-Prim'Awla (Civil Court, First Hall) and, on appeal. The Qorti tal-Appell (Court of Appeal) – have developed a body of interpretation that does not always follow a uniform line. Several tensions are worth noting.
The first tension concerns the foreseeability threshold. Courts have at times applied a strict test: foreseeability is assessed against the standard of a reasonable and prudent contracting party in the relevant industry. On this approach, a business that operates in a sector known to be subject to geopolitical or supply chain risk will find it difficult to argue that a specific disruption. even a severe one – was unforeseeable. Courts have pointed to the existence of industry-standard risk allocation clauses as evidence that the type of risk was, at least generically, foreseeable.
The second tension concerns partial impossibility. Where only part of a contractual obligation becomes impossible, the Civil Code provides for partial relief proportionate to the impossible portion. In practice, however, courts have applied this provision restrictively. A party that can still perform some of its obligations – even at greatly increased cost – is unlikely to obtain full suspension of the contract. The obligor must demonstrate that the impossible portion is not severable from the remainder without fundamentally changing the nature of the obligation.
The third tension, and perhaps the most commercially significant, concerns the distinction between objective and subjective impossibility. Maltese civil legislation addresses objective impossibility – the situation where performance is impossible for anyone, not merely for this particular obligor. Subjective impossibility, where performance is impossible only for the specific obligor due to that party's own circumstances, does not meet the statutory threshold. This means a manufacturer who faces a supply disruption specific to its own supplier network, while competitors continue to perform equivalent obligations, will struggle to establish force majeure under the statute.
The courts have also considered the question of causation carefully. Relief is denied where the party seeking it contributed to the disruptive event or failed to take reasonable steps to mitigate its effects. This duty of mitigation, while not always explicitly stated in the Civil Code, has been applied as an implicit condition by courts drawing on general principles of obligations. International clients unfamiliar with this approach sometimes underestimate how actively the court will scrutinise conduct before and during the disruptive event.
For a detailed view of how commercial disputes of this kind are handled procedurally. This includes the use of civil procedure tools such as the statement of claim and interim injunction applications. See our analysis of corporate disputes in Malta.
The gap between statute and practice: what contracts actually say – and what courts do with them
The most consistent observation from practitioners advising on Maltese contract disputes is that the written contract and the underlying statute often do not align as parties expect. Three recurring misalignments are worth examining in detail.
The first misalignment concerns force majeure clause drafting. Many commercial contracts governed by Maltese law include clauses that enumerate specific events – natural disasters, pandemics, government action, war – as force majeure triggers. Parties frequently assume that the enumerated list is exhaustive and that the clause displaces the statutory regime entirely. Maltese courts have, however, read such clauses in light of the general law of obligations. Where the clause is ambiguous about whether it adds to or replaces the statutory conditions. Courts have applied a teleological interpretation: the clause is read in a way consistent with the underlying civil law purpose of the statutory doctrine. This can produce results that neither party anticipated.
The second misalignment concerns the consequences of establishing force majeure. Under Maltese civil legislation, the primary consequence is relief from liability for non-performance – not automatic contract termination or price adjustment. A party that successfully establishes force majeure suspends its obligation while the event persists but does not automatically acquire the right to exit the contract or renegotiate its terms. Where the disruption is prolonged, the question of when suspension transforms into a right of termination is governed by specific provisions of civil legislation dealing with contracts of continuing performance. Courts have required parties to demonstrate that the duration of the event has rendered the contractual purpose definitively unachievable.
The third misalignment concerns hardship clauses. International contracts – particularly those used in supply chains and long-term service arrangements – frequently include hardship clauses that require renegotiation in good faith upon a material change in economic circumstances. These clauses raise a specific problem in Malta: the obligation to renegotiate in good faith is not easily enforced through Maltese civil procedure. The court cannot substitute the renegotiated terms or compel a specific outcome. What it can do is determine whether the party invoking hardship has met the threshold set by the clause itself, and whether the refusal to renegotiate constitutes a breach of the clause's procedural requirements. The substantive outcome – the revised commercial terms – remains a matter for the parties.
In practice, this means that hardship clauses function primarily as a structured negotiating mechanism rather than a source of judicially enforceable economic relief. A party facing adverse economic circumstances will often use the hardship clause to initiate dialogue and, if negotiation fails, to establish that it acted in compliance with its contractual obligations before resorting to other remedies. The court filing in such cases frequently involves a claim for breach of the procedural obligations in the clause, rather than a direct claim for contractual adjustment.
Parties who need to assess how litigation and alternative dispute resolution interact in this context can review the services described in our overview of litigation and arbitration in Malta.
To receive an expert assessment of force majeure or hardship exposure under your Maltese contracts, contact us at info@ferrazwhitmore.com.
Cross-border implications: European parties and the Maltese dimension
Malta's membership of the European Union adds a further layer of complexity for cross-border contracts. EU legislation does not harmonise the substantive law of force majeure or hardship – these remain matters of national private law. However, several EU-level instruments affect how disputes involving Maltese parties and European counterparties are managed.
The first consideration is the choice of law. Under EU private international law rules – the Rome I Regulation for contracts – the applicable law is determined primarily by the parties' express choice. Where a contract expressly designates Maltese law, Maltese civil legislation applies to the force majeure and hardship analysis. Where the choice of law is absent or unclear, Rome I provides connecting factors that may point to Maltese law where the characteristic performer is based in Malta. European counterparties sometimes assume that their home country's more flexible hardship doctrine will apply; this assumption can be wrong where the contract is governed by Maltese law.
The second consideration is jurisdiction and enforcement. Under EU rules on civil jurisdiction. principally the Brussels I Regulation (recast). judgments obtained in Maltese courts benefit from automatic recognition and enforceability across EU member states without the need for a separate exequatur procedure. A judgment enforcement obtained in Malta against a German or French counterparty can therefore be executed directly in those jurisdictions. This makes the Maltese courts an effective forum for European creditors seeking to enforce contractual claims, even where the debtor's assets are located elsewhere in the EU.
The third consideration concerns the conduct of proceedings. Malta's civil procedure operates in Maltese and English, which reduces the practical burden for English-speaking international parties compared to purely civil law jurisdictions where proceedings must be conducted in a non-English language. This procedural accessibility, combined with the EU judgment recognition regime, makes Malta a strategically useful jurisdiction for creditors managing multi-jurisdictional disputes.
A recurring cross-border scenario involves contracts in the maritime, logistics, and energy sectors – industries where Malta-registered entities are common – that are disrupted by events outside Malta. In such cases, the force majeure analysis under Maltese civil legislation must address whether the disrupting event satisfies the external, unforeseeable, and irresistible requirements from the perspective of the Maltese-registered obligor. The answer turns heavily on the specific facts: the obligor's contractual obligations, its mitigation efforts, and the nature of the event. Practitioners advising European clients in this context consistently emphasise the importance of contemporaneous documentation. notices, mitigation records, correspondence – which courts in Malta treat as primary evidence of the party's conduct during the disruptive period.
A comparative perspective is available in our analysis of how equivalent doctrines operate in Portuguese contract law: Force Majeure and Hardship in Portugal.
For a tailored strategy on cross-border contract disputes involving Maltese law and European counterparties, reach out to info@ferrazwhitmore.com.
Strategic recommendations and self-assessment
Businesses operating under or through Maltese-governed contracts should approach force majeure and hardship risk with a specific set of considerations. The following framework addresses both pre-dispute planning and active dispute management.
Before a disruptive event arises, contracts should be reviewed against the three statutory conditions. A force majeure clause that uses broad language without engaging with the requirements of foreseeability, irresistibility, and external origin may be interpreted more narrowly than its drafters intended. Specific attention should be paid to:
- Whether the clause defines the consequences of force majeure (suspension, termination, price adjustment) or leaves these to be determined by the general law of obligations.
- Whether a hardship clause contains a defined threshold, a structured renegotiation procedure, and a consequence for failure to renegotiate.
- Whether the contract imposes a duty to notify the counterparty promptly upon the occurrence of the disruptive event – failure to notify within a specified period can operate as a waiver of the force majeure right.
- Whether the governing law and jurisdiction clauses are consistent with the party's enforcement strategy, taking into account the EU judgment recognition rules.
When a disruptive event occurs, the practical response should proceed along three tracks simultaneously. The first track is documentation: all evidence of the event, its effects on performance, and the steps taken to mitigate those effects should be preserved immediately. Maltese courts will scrutinise this record. The second track is notification: the contractual counterparty should receive a written notice that complies with any notice requirements in the contract and that identifies the event, its nature, and its expected duration. The third track is legal assessment: the party should obtain an early opinion on whether the event meets the statutory conditions and what procedural steps. including any urgent measures such as an interim injunction to preserve the status quo. may be available or necessary.
A force majeure or hardship claim in Malta is applicable if:
- The disruptive event was objectively unforeseeable for a party in the obligor's position and industry.
- The event was genuinely irresistible – no reasonable mitigation measure could have prevented its effect on performance.
- The event is external to the obligor and does not originate in its own conduct, financial position, or supply chain choices.
- The affected obligation is identified with specificity and the causal link between the event and the impossibility of performance is clearly established.
- The party has complied with its notification and mitigation obligations under the contract and applicable law.
Before initiating civil procedure or a statement of claim, verify:
- That the contractual force majeure or hardship clause does not impose conditions additional to the statutory requirements – such as minimum durations, specific qualifying events, or procedural prerequisites – that have not yet been met.
- That the party has taken and documented all reasonable mitigation steps, since the absence of such steps is a common basis on which courts reject force majeure claims.
- That the choice of forum – Maltese courts versus arbitration – is consistent with the contract and with the enforcement strategy, particularly where counterparty assets are located in EU member states and automatic enforcement is available under the Brussels I Regulation.
- That the timing of any court filing takes into account the applicable limitation periods under Maltese civil legislation, which can run from the date of breach or the date on which the party became aware of the relevant facts.
One important strategic observation concerns the interaction between force majeure and damages claims. A party that successfully establishes force majeure is relieved of liability for the period of impossibility. However, if that party also has claims against the counterparty for other obligations. such as payment for services already rendered or costs incurred in reliance on the contract. those claims are not extinguished by the force majeure event. Maintaining clarity about which claims survive, and pursuing them through separate heads of claim, is an aspect of dispute management that is sometimes overlooked in the urgency of the disruptive event itself.
Outlook: regulatory trajectory and what to monitor
The doctrinal position on force majeure in Malta is relatively stable. The Civil Code provisions have not undergone significant amendment in recent years, and there is no active legislative initiative to introduce a standalone hardship clause analogous to the French imprévision reform.
However, several developments merit monitoring. First, the continued expansion of EU contract law instruments – including ongoing discussions about optional common European commercial law tools – could influence how Maltese courts approach harmonisation pressures in cross-border disputes. While Malta has not adopted any optional EU contract law instrument, the Court of Justice of the European Union's interpretations of adjacent EU legislation can inform Maltese judicial reasoning in cases with a cross-border dimension.
Second, the aftermath of large-scale disruptions in recent years – supply chain failures, energy price shocks, and geopolitical disruptions affecting logistics – has generated a body of contractual disputes across EU jurisdictions. As Maltese courts decide more of these cases, a clearer judicial line on the foreseeability threshold and the treatment of systemic risk may emerge. Practitioners who monitor these decisions will be better positioned to advise on clause drafting and dispute strategy.
Third, the role of arbitration in resolving Maltese commercial disputes is growing. The Malta Arbitration Centre (MAC) provides a structured institutional framework for commercial arbitration under Maltese arbitration legislation. Arbitral tribunals seated in Malta have somewhat greater flexibility in applying hardship principles, particularly where the parties have chosen institutional rules that incorporate concepts of contract adaptation or equitable adjustment. For international contracts where Maltese law is chosen as the governing law. The combination of Maltese-seated arbitration and MAC institutional rules may offer more commercially pragmatic outcomes in hardship scenarios than litigation before the civil courts.
Finally, a lawyer Malta specialist will note that the increasing use of digital and automated contracting platforms by Malta-registered entities raises novel questions about force majeure notice procedures. Contracts concluded through electronic platforms often impose strict automated notice windows. The interaction between these automated mechanisms and the general civil law principles governing the timeliness and form of force majeure notices has not yet been fully addressed by the courts. Parties using such platforms should obtain specific advice on whether their digital notice procedures comply with the requirements of Maltese civil legislation and the relevant contractual terms.
Frequently asked questions
Q: How does Maltese law treat force majeure differently from English contract law?
A: English contract law does not have a standalone doctrine of force majeure. It relies instead on the doctrine of frustration, which requires a more fundamental change in circumstances than the Maltese civil law standard. Under Maltese civil legislation, force majeure is a statutory concept with defined requirements – unforeseeability, irresistibility, and external origin – that applies even where the contract is silent. A party accustomed to English law instincts will find the Maltese regime more codified and, in some respects, more prescriptive. Engaging a law firm Malta with civil law competence is important when assessing claims under Maltese-governed contracts.
Q: How long does it typically take to resolve a force majeure dispute through the Maltese civil courts?
A: First instance proceedings before the Civil Court, First Hall in Malta can take anywhere from one to several years, depending on the complexity of the case, the number of witnesses, and court scheduling. Appeals to the Court of Appeal add further time. Urgent relief – such as an interim injunction to preserve rights pending the main proceedings – can be obtained more quickly, often within days or weeks of a court filing. Parties with time-sensitive claims should consider whether to seek interim measures immediately while pursuing the substantive dispute through the main proceedings or through arbitration.
Q: Can a party rely on hardship to renegotiate a long-term contract under Maltese law if there is no hardship clause?
A: This is a common misconception. Where a contract governed by Maltese law contains no hardship clause, there is no general statutory basis for requiring renegotiation on grounds of changed economic circumstances alone. The Civil Code does not incorporate an imprévision doctrine equivalent to the one introduced into French civil legislation. If performance remains objectively possible – even at a significantly higher cost – the obligor cannot compel the counterparty to renegotiate simply because the contract has become commercially disadvantageous. The only available path is to demonstrate genuine legal impossibility meeting the force majeure threshold, or to rely on any hardship provisions included in the contract itself.
About Ferraz & Whitmore
Ferraz & Whitmore is an international law firm based in Lisbon, advising business clients across 46 jurisdictions. Our team combines Portuguese civil law expertise with English common law tradition to deliver cross-border legal solutions in commercial litigation, contract disputes, and force majeure analysis involving Maltese and European law. We advise international entrepreneurs, institutional investors, and in-house legal teams managing contract disruption risk across multiple legal systems. The firm's commercial litigation practice covers civil law jurisdictions throughout Europe, including Malta, supported by direct access to Portuguese and EU regulatory systems and a network of local counsel. Our attorneys have advised on force majeure, hardship, and contract adaptation matters across both civil law and common law jurisdictions, and the firm participates in cross-border practice groups focused on commercial obligations and dispute resolution. As a law firm Malta specialists regularly work with, Ferraz & Whitmore offers the dual-tradition perspective that complex cross-border contracts require. To discuss how force majeure or hardship provisions in your Maltese contracts affect your position, contact us at info@ferrazwhitmore.com.
Disclaimer: This publication is provided for informational purposes only and does not constitute legal advice. The information herein should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. Ferraz & Whitmore assumes no liability for actions taken or not taken based on the contents of this material. For advice regarding your particular situation, please contact info@ferrazwhitmore.com.