DLT & Fintech

Distributed ledger technology (“DLT”), of which blockchain is a key example, has the potential to disrupt those industries where end-users could benefit from decentralization.  
 
Decentralization is a concept in which parties to a transaction are able to transact directly with one another without the necessity of intermediaries that are ordinarily employed to enable such transactions. 
 
Being a relatively novel technology, many are the solutions that are being proposed that are yet to be tested in the market. Only a select few will achieve the desired commercial outcome, as an increasing number of participants attempt to deliver competing solutions that seek to radically change the way we transact with each other. 
 
Our DLT and fintech practice brings together financial regulatory, data protection, intellectual property, KYC, and e-commerce issues and applies them to the nuances surrounding the new wave of regulations on DLT, related virtual currencies, and DLT service providers. 
 
With these tools, we are able to guide clients to prepare the required documentation and by curating important details that can differentiate an initial coin offering (“ICO”) from a security token offering (“STO”) or a related service from one regulatory regime to another. 
 
Our in-depth understanding of distributed ledger technology, token generating events, and the ecosystem of related service providers makes us well-positioned to advise and assist clients on all aspects of: 
 
- Structuring, drafting, and review of ICO or STO documentation including white papers, private placement offering documents, token purchase agreements, pre-ICO token offering, terms of use, and privacy policies
- Regulatory profiling of ICOs or STOs pursuant to the ‘financial instrument test’ set forth by the MFSA
- Licensing of brokers, dealers, portfolio managers, sponsors, and exchanges of virtual currencies
- Anti-money laundering regulations, due diligence, and KYC implications of ICOs and related service providers 
- Business formation
- Review of marketing material and websites
- Advising on associated aspects of intellectual property, data protection, regulatory compliance, and e-commerce.

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Court Upholds Right to Divide Roof in Co-ownership Case

In matters of co-ownership, individuals cannot be compelled to remain in such a state indefinitely and may request the partition of the property, provided this is easily divisible. This principle was underscored in the judgment delivered on the 30th January 2024 in the case William Gatt, Claire Gatt et al. vs George Mangion et al., presided over by Honorable Judge Dr. Joanne Vella Cuschieri, which judgment was subsequently confirmed by the Court of Appeal on the 30th January 2025. Case Background The plaintiffs sought judicial intervention to dissolve co-ownership of the roof of a block of apartments, which was held in common between four apartments, in equal, undivided shares. The plaintiffs presented an architect’s report demonstrating that the property was divisible without undue harm. Despite sending a formal legal letter and a judicial letter, the defendants consistently opposed any division. Consequently, the plaintiffs requested a court order to terminate the co-ownership and permit partition. Defendant's Arguments Inapplicability of Civil Code Provisions: The defendants argued that Article 4 of the Condominium Act (Chapter 398, Laws of Malta) excludes the application of the Civil Code to property held pro indiviso in condominium common areas. They also cited Article 7 of Chapter 398, which requires unanimous consent for division. Competence of the Court: They contended that disputes regarding condominiums must be resolved through arbitration under the Arbitration Act. Potential Prejudice: The defendants claimed that division would reduce usability and diminish the property’s value due to limited development potential. They also alleged disproportionate benefits and prejudice against smaller portions. Court’s Analysis and Decision The court had already dismissed the defendants’ preliminary pleas regarding the admissibility of the action, the requirement for unanimous consent, and the jurisdiction of the court to decide the case. The Court, in its partial judgment delivered on the 23rd of February 2021, affirmed its competence and allowed the case to proceed to the merits. In its judgment on the merits, the court focused on whether the property could be easily divisible or partitioned without difficulty. The Architect’s Report played a pivotal role, confirming that the property- in this case, the roof - was divisible without diminishing usability for any of the apartment owners. Under Article 496 of the Civil Code, no individual can be forced to remain in co-ownership, and partition can be demanded unless explicitly prohibited by a valid agreement or will. Notably: Agreements preventing partition are valid only for up to five years and can be renewed. Even where partition is prohibited, the court may allow it under "serious circumstances" as outlined in Article 497 of the Civil Code. The court affirmed that the law prioritizes enabling partition unless there are compelling reasons to maintain co-ownership. It dismissed the defendants’ concerns about reduced usability, stating that each party’s right to use their portion of the roof would remain intact post-partition. Regarding potential value reduction, the court emphasized cooperative development planning to enhance the property’s overall value. It advised the parties to collaborate in managing the airspace, benefiting all stakeholders. Final Judgment The court granted the plaintiffs’ request, ordering the property’s partition. It rejected the defendants’ arguments and claims, affirming the plaintiffs’ right to terminate co-ownership. This case demonstrates the fundamental principle enshrined in law that no individual can be compelled to remain a co-owner against their will. The plaintiffs were represented by Dr. Joseph Mizzi.  
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