Financial Services Tribunal fails the fair-hearing test

The First Hall of the Civil Court (Constitutional Jurisdiction) gave judgment on 27 April 2026 in Phoenix Payments Limited vs L-Awtorita' Ghas-Servizzi Finanzjarji Ta' Malta. Madam Justice Rachel Montebello held that the appeal route against a fine imposed by the Malta Financial Services Authority lacks the full review by an independent court that a fair hearing requires. The appeal was still pending, so she declared a likely breach and stayed the appeal until the law is amended.

The facts

On 11 March 2021 the authority fined the company €32,400 under article 13 of the Financial Institutions Act (Chapter 376 of the Laws of Malta) and regulations made under it (S.L. 376.02). The fine followed inspections in May 2020 and a so-called minded letter of 4 November 2020, which set out the breaches found and the action proposed.

The company answered in writing. The authority then cut the breaches from five to three and imposed a lower fine. The company, since renamed Lazarus Long Limited, appealed to the Financial Services Tribunal.

On 26 April 2021 it also filed this constitutional application against the authority and the State Advocate. It argued that the authority acts as investigator, prosecutor and judge, and that the appeals open to it cannot cure that. The tribunal refused on 9 August 2021 to suspend the appeal, and the court treated that appeal as still pending.

What the court held

The court treated the fine as a criminal charge for the purposes of article 39(1) of the Constitution and article 6(1) of the European Convention on Human Rights, though outside the hard core of criminal law. It found that the authority is neither a court nor an independent tribunal. Its enforcement directorate takes part at every stage, and the officers who recommend a fine are paid by the body that collects it.

That alone is no breach. Following the Constitutional Court, the judge held that an administrative body may impose such a sanction if the person can take it before a court with full jurisdiction over fact and law. The appeal route failed that test on three counts.

First, under article 21(9) of the Malta Financial Services Authority Act (Chapter 330), the tribunal may examine only a wrong application of the law, an abuse of discretion or a manifestly unjust decision. It cannot question a discretion properly exercised. The court held that the tribunal “ma għandux ġurisdizzjoni sħiħa biex jirrevedi d-deċiżjoni fuq il-fatti tal-każ” (has no full jurisdiction to review the decision on the facts of the case).

Second, the tribunal is not independent. The minister appoints its three members for three years, may reappoint them and alone decides whether one should be removed for incapacity or misconduct. Article 12(1)(f) also tasks the authority's enforcement directorate with assisting in the conduct of enforcement appeals before the tribunal, which the court found removes any appearance of impartiality and denies the appellant equality of arms.

Third, article 21(14) allows a further appeal to the Court of Appeal on a point of law only, and articles 145 and 150 of the Code of Organization and Civil Procedure restrict new evidence. The court contrasted fines by the Financial Intelligence Analysis Unit, which the Court of Appeal may review on everything.

A fair-hearing breach is judged on the proceedings as a whole, and the tribunal might still annul the fine. Relying on article 46 of the Constitution, which also covers a right that is likely to be breached, the court declared that the company's right under articles 39(1) and 6(1) is likely to be breached.

It stayed the tribunal appeal until Chapter 330 is amended to allow an appeal to the Court of Appeal on all questions of fact and law, with both sides free to bring evidence. It rejected the claims to annul the fine and for moral damages, since no actual breach had yet occurred. It ordered a copy sent to the tribunal and, once final, to the Speaker of the House of Representatives under article 242 of the Code of Organization and Civil Procedure.

Each party bears its own costs.

Why it matters

A licence holder fined by the authority now has a first-instance ruling that the tribunal route is likely incompatible with the right to a fair hearing. A lawyer advising on such a fine should weigh a constitutional application alongside the tribunal appeal and ask for a stay. The ruling turns on the text of Chapter 330, so fines under other statutes need their own appeal provisions checked.

Where it sits

The case applies the settled doctrine that a criminal charge under article 6 has an autonomous meaning, and that an administrative penalty is compatible with article 6 if a judicial body with full jurisdiction can review it. The court drew that test from the European Court of Human Rights (4 March 2014) and from Edizioni del Roma Societa' Cooperativa A.R.L. vs Italy (European Court of Human Rights, 19 December 2020).

On independence it looked to the manner of appointment, the term of office and guarantees against outside pressure, as set out by the European Court of Human Rights (28 June 1984). It followed Federation of Estate Agents vs Direttur Ġenerali (Kompetizzjoni) (Constitutional Court, 3 May 2016) and Online Amusement Solutions Ltd vs Korp għall-Analiżi ta' Informazzjoni Finanzjarja (Constitutional Court), which read article 39(1) as widely as article 6(1).

It distinguished Phoenix Payments Limited vs Il-Korp għall-Analiżi ta' Informazzjoni Finanzjarja (Constitutional Court, 18 November 2024), where review lay before a court with full jurisdiction.

Source

First Hall of the Civil Court (Constitutional Jurisdiction), 272/2021, 27 April 2026: 272/2021