The recent developments in Maltese constitutional jurisprudence concerning the imposition of significant administrative penalties by non-judicial authorities continues to illustrate a critical tension between constitutional guarantees and pragmatic regulatory enforcement. Central to this debate is Article 39 of the Maltese Constitution, which unequivocally provides:
“Kull min jiġi mixli b’reat kriminali għandu jingħata smigħ xieraq quddiem qorti indipendenti u imparzjali.”
(“Any person charged with a criminal offence shall be afforded a fair hearing before an independent and impartial court.”)
In several cases [Phoenix Payments Ltd v FIAU et (FH)(30 March 2023)(51/22) (Mme Justice A. Demicoli); Insignia Cards Ltd v. FIAU et (FH)(24 May 2023)(175/21) (Mr. Justice L. Mintoff); Lombard Bank Malta Plc v. FIAU et (FH)(5 June 2023)(394/21)(Mr. Justice G. Mercieca); XNT Ltd v. FIAU et (FH)(13 July 2023)(300/22)(Mme Justice J. Vella Cuschieri); Dr Roderick Caruna v. FIAU et (FH)(28 September 2023)(11/22)(Mr Justice T. Abela); N Trust Ltd v. FIAU et (FH)( 30 January 2014)(247/22)(Mme Justice J. Vella Cuschieri); Credence Corporate and Advisory Services Ltd v. FIAU et (FH)(29 May 2024)(129/21) (Mr. Justice I. Spiteri Bailey); Vivero Ltd v. FIAU et (FH)(27 June 2024)(114/21) (Mr Justice T. Abela); Truevo Payments Ltd v FIAU et (FH)(27 June 2024)(579/212)(Mr Justice Abela)], this constitutional provision has been interpreted strictly, asserting that any penalties considered criminal by their severity or deterrent nature—assessed via the well-established Engel criteria—must originate from judicial proceedings and not administrative bodies. However, in a landmark judgment delivered on 18 November 2024, presided by Chief Justice Mark Chetcuti, the Constitutional Court in XNT Ltd vs FIAU significantly altered the established jurisprudential stance. The Court posited that substantial administrative penalties, despite qualifying as criminal in nature under Engel criteria, could constitutionally originate from administrative authorities provided there was an effective right of appeal before a court of law. In the Court’s words:
“Il-kriterji Engel mhumiex kumulattivi iżda alternattivi, u għalhekk għalkemm multa amministrattiva tista’ titqies bħala kriminali, dan ma jfissirx li l-penali amministrattivi ma jistgħux jiġu imposti minn awtorità amministrattiva, sakemm jeżisti appell ġudizzjarju effettiv li jassigura smigħ xieraq.”
(“The Engel criteria are not cumulative but alternative, hence, although an administrative fine may be considered criminal, this does not mean administrative penalties cannot be imposed by an administrative authority, provided an effective judicial appeal exists to ensure a fair hearing.”)
Chief Justice Chetcuti’s reasoning rested on several interconnected arguments. First, he emphasized that Maltese law expressly allows administrative authorities to issue fines provided there is subsequent access to a judicial body. He underscored that the critical issue is not the initial imposition by an administrative body but the availability and effectiveness of judicial oversight through an appeal mechanism. The Chief Justice argued:
“Li awtorità amministrattiva timponi multa ma jfissirx li hi tkun qed tieħu l-post tal-qorti. Dak li huwa kruċjali huwa li jkun hemm mekkaniżmu effettiv ta’ appell quddiem qorti li jkollha ġurisdizzjoni sħiħa sabiex tiġi rispettata d-dritt għal smigħ xieraq.”
(“The imposition of a fine by an administrative authority does not mean it is taking the place of a court. What is crucial is the existence of an effective appeal mechanism before a court with full jurisdiction to uphold the right to a fair hearing.”)
Second, he pointed out that the European Court of Human Rights consistently upheld the legitimacy of administrative fines at first instance, provided robust judicial review existed. Hence, the Maltese constitutional standard, though stringent, does not inherently exclude this interpretation.
As held earlier, critics of this interpretation argue that this logic undermines the constitutional safeguard explicitly confining criminal penalties to judicial institutions. They highlight prior judicial pronouncements, notably the Constitutional Court’s judgments in Federation of Estate Agents vs Director General Competition and Rosette Thake vs Electoral Commission, which firmly rejected any retroactive legitimisation of administrative adjudications through subsequent judicial review.
Yet, the complexity of the matter was underscored by the recent ECtHR ruling on the same case (XNT Ltd vs Malta, Application no. 37277/24), which dismissed XNT’s, emphasising:
“The Court reiterates that a State’s choice of a particular criminal justice system is in principle outside the scope of the supervision carried out by the Court at European level, provided that the system chosen does not contravene the principles set forth in the Convention”
The cumulative effect of these considerations is that Malta presently occupies a constitutional terrain characterised by uncertainty. Although jurisprudentially precarious, Chief Justice Chetcuti’s ruling remains authoritative unless explicitly overruled by constitutional amendment or substantial judicial reinterpretation. In other words, considerable fines imposed administratively, potentially amounting to hundreds of thousands of euros seem to be, at least for now, constitutionally anchored and effectively enforceable.
