Securing future obligations

Abstract

The global economic circumstances of the first decade of this century have spurred the need for the Maltese jurisdiction to better adapt to the needs of both the local and foreign investor as a means to increase the volume of capital that is being invested locally. These developments create the scope for an evaluation of the different modes of creating security and providing collateral under Maltese law. This thesis analyses the means through which future obligations can be secured under Maltese Law. The possibility of effectively securing future obligations should allow for an increased level of flexibility for creditors and debtors alike, thereby facilitating the financing of a number of projects. Nevertheless, this prospect is fraught with difficulties. This study evaluates the traditional institutes of security, namely suretyship, pledge and hypothecs. The possibility of securing future obligations under each of these modes of creating security is considered. Non-traditional modes of securing future obligations, namely through the security trust, mortgage and security by title transfer are also examined. The constitutive elements of each institute are studied in some depth and compared those of the other institutes. This study also considers the possibility of securing future obligations through financial collateral arrangements and considers the various facets of the Financial Collateral Arrangements Directive as the first attempt of harmonisation of securing future obligations at EU level. The thesis looks to proposing a number of changes that would make the various modes of creating security better suited to cater for future obligations in furtherance of the aim of making the Maltese jurisdiction more creditor friendly. Whilst the possibility of amending a number of the above-mentioned institutes is discussed, the single most important finding of this thesis is that much greater clarity is required as to the actual possibility of securing future obligations.