What happens if the other party in an arbitration simply refuses to participate?

No, a party's refusal to participate does not automatically bring arbitration proceedings to a halt under the Arbitration Act, Chapter 387 of the Laws of Malta, since the framework, including the Malta Arbitration Centre's rules, includes default mechanisms specifically designed to handle exactly this scenario, such as the Chairman of the Malta Arbitration Centre having the power to appoint an arbitrator on behalf of a party that fails to make its own nomination within the required timeframe, allowing the process to continue rather than being blocked by one side's non-cooperation. Once properly constituted, the arbitral tribunal can generally proceed with the arbitration and issue a binding award even in the continued absence or non-participation of one party, provided that party was given proper notice and genuine opportunity to participate at each stage, since Maltese arbitration law does not allow a party to defeat a valid arbitration agreement simply by refusing to engage. It would be worth working closely with your lawyer and the Malta Arbitration Centre to ensure every procedural step, particularly notice requirements, is properly documented, since this becomes important both for moving the process forward and for ensuring any eventual award is fully enforceable against the non-participating party.