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Maritime Law

Under international treaties and Panamanian laws
Cajigas & CO Law Firm > Maritime Law

Under Panamanian Law, change of ownership of a vessel can be prevented by arresting the vessel. For this to be accomplished, the vessel must be within the jurisdiction of Maritime Law in Panama. However, if the vessel is not in Panama, we are allowed to file an action in rem against the vessel, request its arrest and immediately require the Maritime Court to order an entry on the vessels’ record at the Public Registry as evidence that a claim against the vessel has been effected.

Ley Marítima en Panamá - Maritime Law in Panama

This entry, which would appear in every certification issued by the Registry regarding the vessel, will not prevent its sale, but it would allow the plaintiff to make valid his rights against any buyer of the vessel. An alternative is to request in Court an order to prohibit the sale or mortgage of the vessel. To this end the plaintiff should file preliminary evidence to support the claim and a guaranty bond to be fixed by the Court, for not less than US$10,000.00.

An action in rem filed in Panama just to get the above note, would be in abeyance up to the moment the vessel arrives and is arrested in Panama. In case the vessel’s owners motion for the release of the note, arguing that a previously filed claim exists abroad, the Court may reject the action in remand could require as previous conditions that the defendant prove the following:

  1. That the lis pendens argument is valid in the relevant foreign Court to reject a claim when a previous claim is pending before a Panamanian Court, and
  2. That the defendant has secured the sums claimed in the foreign Court.

The arrest of the vessel could also be ordered by a foreign Court and we may request its enforcement by the Maritime Law in Panama. For this purpose, a 6 to 8-month procedure seeking the approval of the Supreme Court would be necessary.

The first aspect to determine in order to arrest a vessel in Panama, is whether the client has or not an action in rem. This will enable us to choose the right proceedings for the claim. In accordance to the Panamanian law, unless there be an agreement to the contrary, the lex loci where the cargo was loaded should be applied to determine the effects of a transportation contract, including the bill of lading. This law will also decide the time-barring of the action and whether there is an action in rem.

The limitation of responsibility of the vessel would be regulated by the law of the vessel’s flag. In case the Maritime Law in Panama becomes applicable, this is very similar to the International Convention on Limitation of Liability for Maritime Claims, London, 1976.

Panama is the world’s top in ship registry and Maritime Services

The maritime law in Panama have their own conditions and are governed by international treaties that ensure fair treatment of the parties in conflict. In order to draft a claim against a vessel, and file for its arrest, the following information is required:

  1. Name of the vessel and particulars of the same (tonnage, flag, estimated time of arrival and any other details).
  2. Name of the plaintiff and the individual who will sign the power of attorney, as well as the address of the plaintiff.
  3. Name, address and all data available about the defendant, if the claim is in persona.
  4. A clear explanation of the facts on which the claim will be based.
  5. Amount claimed.
  6. Port and country where the cargo was loaded or the facts occurred.
  7. Copies of the bill of lading, including the reverse side, which should be enlarged before faxing enabling us to read the small print. We will search here for any clause related to applicable law or jurisdiction.
  8. Copies of any written communications with the vessel or its representatives, which may be of interest in the claim.
  9. Copies of any survey report available.

The complaint should be filed together with the arrest petition and preliminary fax evidence to support the claim.

The following bonds should be deposited in Court at the time the arrest petition is being filed:

  1. US$ 1,000.00, as a guaranty for potential damages an unfair arrest may cause (this sum is recovered if the claim is won). If the claim is in persona (not in rem) the guaranty to be deposited will be between 20% to 30% of the sum claimed.
  2. US$ 2,500.00, to cover initial expenses for maintenance and custody of the vessel.
  3. From US$ 150.00 to US$ 4,500.00 (depending on the amount claimed) If the action is to be filed without a formal power of attorney and without evidence of the existence of the plaintiff (this deposit is to be recovered at the time these documents are filed in court).
  4. In addition to the power of attorney, which form we may send upon request, the client needs to have a document issued by a Governmental Authority, to prove that the plaintiff, if it is a company, is presently in existence and that the person signing the power of attorney is authorized to represent the company. Only in the event that the said Government Authority to issue this type of certification does not exist, you may then have a Notary Public sign the form of certification on the reverse of our power of attorney model.

It is important to mention that the power of attorney, the certification of existence and representation provided by the plaintiff must be legalized by Apostille. If this is not available, it must then be legalized by the closest Panamanian Consulate.

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