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Malta

Implementing legislation

The Maltese Commercial Code (Chapter 13 of the Law of Malta), as amended by the Various Laws (Amendment) Act 2003

Proper notice

  • 1 month if less than or equal to 1 year
  • 2 month is more than 1 year and less than or equal to 2 years
  • 3 months if more than 2 years

Indemnity or compensation or both

Indemnity only

Calculation of indemnity/compensation

  • Capped at a maximum of the average annual commission over last 5 years or, if less than 5 years, over the agency
  • Agent may also be entitled to damages

Pre-termination commission

Yes

Post-termination commission

Yes

Back Commission

Yes

Other comments

Any person who wishes to be a commercial agent must obtain a licence from the Council of the Maltese Chamber of Commerce.

Restrictive Covenants

Implementing Legislation

Maltese Commercial Code (Chapter 13 of the Laws of Malta)

1) Under Maltese law is it possible to have a restraint of trade clause operating during the agency agreement and, if so, is it subject to any qualifications?

Article 20 of Council Directive 86/653/EEC on the coordination of the laws of the Member States relating to self-employed commercial agents has been introduced (practically verbatim) into the Maltese Commercial Code when this was last amended in 2003.  

Article 70 A of the Commercial Code defines a restraint of trade clause as “an agreement or a clause in an agreement restricting the business activities of a commercial agent following the termination of the agency contract.”

The Code does not address the situation regarding restraint of trade clauses operating during the agency agreement.

 2) Under Maltese law is it possible to have a restraint of trade clause operating following the termination or expiry of the agency agreement and, if so, is it subject to any qualifications?

As mentioned above, the Commercial Code follows Article 20 of Council Directive 86/653/EEC and, therefore, has the same provisions regarding restraint of trade clauses operating following the termination or expiry of the agency agreement.

Article 78 G of the Commercial Code provides as follows:

"(1) A restraint of trade clause shall be valid only if and to the extent that -
(a) it is concluded in writing; and
(b) it relates to the geographical area or the group of customers and the geographical area entrusted to the commercial agent and to the kind of goods covered by his agency under the contract.

(2) A restraint of trade clause shall be valid for not more than two years after termination of the agency contract.

(3) Nothing in this article shall affect any enactment or rule of law which imposes other restrictions on the validity or enforceability of restraint of trade clauses or which enables a court to reduce the obligations on the parties resulting from such clauses."

agentlaw.co.uk. wishes to thank Fenech & Fenech Advocates of Valletta for its contribution to this page

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