Injunctions Requests before the Panama Maritime Court

In Panama, shipping is one of the most important economic engines of the country. The Canal, the State of the Art Container Ports of Balboa, Cristobal, Evergreen and Manzanillo, the expanding multimodal activities and the ship registry are all factors that are shaping the country into an important maritime nation.

Panama has one of the most important merchant fleets in the world with thousands of ships registered in Panama and flying the Panamanian flag in all corners of the world. When legal situations arise concerning a Panamanian registered vessel or its owners, operators, etc , Panama Maritime Law ( both substantive and procedural ) will certainly be under consideration at some point. Many are the occassions were lawyers and clients find themselves trying to find possible measures to pressure and pursue debtors.
In this article, we briefly refer to the injunctive reliefs available in Panama.

The Panama Maritime Procedural Law considers the following injunctions (or “precautionary measures” as denominated by Panama legislation):

Injunctions for In Rem Claims

There are many instances where a vessel or a ship owning company may incur in debts or liabilities which may result in painful hazards for creditors to recover, with the additional pressure for the latter party that most marine related credits and liens in Panama maintain a time bar of one (1) year. Such may be the case when a supplier has been left hanging with a credit, against a vessel whose route avoids choice of law jurisdictions or where no reliable court may be found to enforce the lien.

The Panama Maritime Procedural Law No. 8 of 1982 contemplates the possibility to file injuctions against those Panamanian flagged vessels not transiting Panamanian waters in Articles 168(4) and 170, third paragraph.

The injunction, when admitted by the Panama Maritime Court, will essentially consist in the recording at the Panama Public Registry of an annotation at the vessel´s property title informing that there is a pending claim and order of arrest before the Panama Maritime Court.

This injunction remedy is contemplated for maritime liens exclusively and its prerequisite is that a claim against a Panama registered vessel must be presented before the court. The effect of the annotation is limited to give notice of the legal action; it does not imply legal arrest, which may only be executed if the vessel is within the jurisdiction of the Maritime Court.

If and when the vessel is physically arrested in Panama an annotation by order of the court will be available whereby the vessel is put out of commerce for the time the vessel remains arrested or until it is judicially sold.

These injunctions essentially serve various purposes, especially when the vessel cannot be physically arrested:

1 - Maintain alive (and stop the statute of limitations) a claim against a vessel before the termination of the one year time bar. Consequently, this permits pursuit of payment satisfaction beyond the statute of limitations

 

2 - Serve to give notice to other present or future creditors that the vessel has pending claims. By notice of the mere existence of the injunction, potential buyers or financing institutions may preclude themselves from doing business with the vessel or shipowner due to the pending litis notification.

Injunctions available for In Personam Claims

“In personam” claims are those maritime originated claims were the creditor may not pursue his claim against the vessel directly, but against the owners, charterers, operators, etc. , including any maritime commerce claim which may not necessarily involve a ship.

Article 203 of Panama’s Maritime Procedural Law, may allow injunctive relief to “in personam” plaintiffs. Article 203, as per its drafting (based on its immediate predecesor Art. 558 of the Civil Procedure Code) is very broad in its interpretation and applications.
Article 203, in purpose and definition, may be compared to those established for the “Mareva” injunctions under English Law.

Fundamentally, Article 203 provides the possibility that a plaintiff may request a precautionary measure (protective, preservative, stoppage) to guarantee and secure the outcome of a judgment until the end of the litigation. These measures may translate for example, in an injunction to stop movement of assets.

The necessary prerequisites to obtain such relief (or precautionary) measure from the Maritime Court are:

1. The previous or concomitant initiation of a claim before the Panama Maritime Court.
2. Prima facie proof of the possible dissipation of assets.
3. Possible existence of property located or registered the Republic of Panama.
4. To comply with a security bond for damages.

In principle, this injunctive relief once approved by the court may serve the same purposes that the one available for the in rem claims.

Both injunctions have the characteristic that when requested the court must consider and decide the claimant´s request ex parte.

It is also worth mentioning that for in personam claims litigation, the plaintiff must continue pursuing the summoning of the defendant, particularly if the domicile of the defendant is not established in Panama and regardless that the injunction has been effected.

It is important to consider that because of its drafting origins and existing interpretation and application in civil courts (via Art 558 of Civil Procedure Code), Art 203 is subject to more uses in litigation (similar to the Mareva injunction) other than the specific targeted assets of a defendant and it may include requests to impose orders to do, orders to not do, to suspend and others.

Maritime Practice

Maritime Litigation	Ship arrest and injunctive relief, Defense of personal injury claims, Bunker claims, Carriage of goods claims, Charterparty disputes, Marine Insurance and reinsurance claims, Collision, salvage and related marine casualties, General average and cargo transshipment, Shipbuilding, ship repair, ship sale and MOA disputes.
Commercial Maritime Transactions	Drafting of an litigation relating to charter parties, berthing agreements, stevedoring contracts, contracts of carriage, service contracts for ocean transportation and terminal leases, ship repair contracts, sale and purchase agreements  and joint venture agreements.
Environmental Representation	Immediate oil spill response. Advice on oil spill liability, hazardous materials transportation and environmental compliance. Lobbying and analysis related to proposed environmental legislation affecting our maritime clients.
ISM Code	Representation, assistance and coordination in application of code norms with Panama Ship Registry.
Legal Opinions	Legal opinions on Panama preferred ship mortgages, vessels acquisitions and other matters related to Panama Maritime Law.
Ship & Yacht Registrations	Ship and yacht registration under the Panama Flag.
Vessel Financing	Representation of lenders and borrowers in preferred ship mortgages transactions.
Labor Relations	Defense claims involving shoreside and maritime labor.