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Legal Focus
JANUARY 2013
Shipping: Vessel Arrests Panama
Looking further into the issues surrounding vessel arrests within the shipping industry, Lawyer Monthly also speaks to Maria de Lourdes Marengo, Partner at Patton, Moreno & Asvat, a well-established law firm with more than 30 years of experience in the Panamanian legal sector.
In october, a Ghanaian court approved the seizure of an argentine ship as part of an on-going dispute between the country and its creditors. How common are vessel arrests in Panama? Have you ever been involved with one?
The Maritime Procedural Law of Panama allows for the arrest of vessels in respect of claims arising from acts of maritime commerce, which are to be settled by the Maritime Courts of Panama. In that respect, Panama shares with most maritime nations the recourse of arrest or attachment of vessels.
Many vessel arrests are conducted on vessels which are in transit, or will transit through the Panama Canal. Patton, Moreno & Asvat regularly assists clients both in securing vessel arrests and releasing vessel arrests, in accordance with the provisions set out in the Maritime Procedural Law. Our team of lawyers is available 24/7 to respond to clients’ needs.
can you give me an overview of the legislation governing vessel arrests and seizures in Panama?
The legislation governing vessel arrests and seizures is the Maritime Procedural Law, contained in Law 8 of March 30, 1982, whereby the Maritime Courts are created and rules of procedures are prescribed, as amended by Law 11 of May 23 of 1985 and Law 12 of January 23 of 2009. The Maritime Procedural Law governs the organization, competence and procedure for the maritime jurisdiction in Panama.
How complex is the approval process for seizure and injunction cases?
To obtain an arrest order it is necessary to file an arrest request and complaint, with “prima facie” evidence of the claim. The plaintiff has to also cover the Court expenses to arrest the vessel and the expenses to preserve the vessel. An arrest order is usually granted within 24 hours of the request being filed. The time for
execution of the arrest depends on the location of the vessel (Pacific or Atlantic). Both Maritime Courts are located on the Pacific. It takes approximately two hours to drive from one ocean to the other and then some additional time for navigating to the vessel.
In the Panamanian jurisdiction, the arrest is available in three instances, to wit:
1) Physically, to seize property susceptible to sequestration in order to make effective privileged maritime liens over the same;
2) To bring within the jurisdiction of the Panamanian Maritime Courts, cognizance of causes emerging within, or outside the National territory, as a result of facts, or acts related to navigation, when the defendant is outside its jurisdiction;
3) To assure that the proceedings will not have any illusory effect, and keep the defendant form transposing, dissipating, encumbering, alienating, or impairing properties susceptible to the said measure.
With respect to injunction measures, Panama’s Maritime Procedural Law allows a person with reason to believe that during the time prior to a judicial recognition of his right, he will suffer imminent or irreparable danger, to request from the Maritime Court the most appropriate conservatory or protection measure which will provisionally guarantee, depending on the circumstances, the effect of a judgment on the merits (i.e. injunction order). Such measures normally are in the form of an order against the sale, transfer or mortgage of Panamanian vessels.
The Maritime Court may issue an order restraining the sale of a Panamanian registered vessel upon filing of a complaint against the vessel’s owner with a petition accompanied with evidence of the existence, and the merits of the claim. The plaintiff will need to deposit court expenses and security damages that the injunction may cause, which is fixed by the Court between US$10,000 to US$50,000.
Once the injunction order is issued, the Court sends the order to the Department of Registration of Titles and Encumbrances of the Shipping Bureau and these authorities make a note on the records of the vessel.
are there any legislative changes you would like to see?
Panamanian maritime legislation has been recently amended and is up to date with the most modern and efficient traditions of maritime countries and jurisdictions. Laws 55, 56 and 57 of 2008, which regulate maritime commerce, ports and merchant marine have compiled our maritime regulations in an accessible manner. Our Maritime Procedural Law has been kept up to date with jurisdictional trends in the maritime area. There is a reason why Panama is the largest ship registry of the world, and strong, consistent legislation is one of those reasons, as well as the efficient manner in which the Panama Maritime Authority has conducted itself. LM
contact: Maria de Lourdes Marengo
address: capital Plaza, Floor 8 costa del Este, Panama P.o. Box 0819-05911 Panama, Republic of Panama
tel: +507 306-9600 Fax: +507 263-7887 Email: mmarengo@pmalawyers.com Website: www.pmalawyers.com