By: Margareth J. Mosquera T.
This year Panama is commemorating the 34th anniversary of its Maritime Jurisdiction, which cannot be possibly conceived without the existence of such an essential procedural figure as the ship arrest. Through the ship arrest the Panamanian Maritime Courts gain competence over whatsoever kind of maritime claims, even though said claim has not been pursued in accordance with our national laws and the more so in a foreign jurisdiction outside the Republic of Panama.
When a ship arrest takes place in Panamanian waters, there are four (4) dimensions which interact constantly, namely the following: the plaintiff against the defendant and vice versa; the competent judge and his/her criteria and the governed laws. Based on this, we like to call the ship arrest in Panama, a four (4) D experience. These are at the same time different and complementary point of views; Doubtless, this last idea can also apply in other jurisdictions, but here is when a key question arrives: What makes Panama so particular in ship arrest?
It is very well-known that the Maritime Courts of Panama can have jurisdiction through the ship arrest, even though if the ship or the parties are not Panamanians or the contract or claims are not governed by Panama law. Actually, just by means of the performance of the ship arrest, a judge become competent to hear the underlying claim on the merits, that’s what we call Forum Arresti. The tricky part is that in order to enable the plaintiff applying for a ship arrest, the ship must be found to be within Panamanian waters. Thence, the strategic position of the Panama Canal cannot be more highlighted since more than 10,000 ships pass through this waterway every year, thus making Panama more an ideal forum to prospective plaintiffs who seek conveniently to have their claims heard in the same forum where the security is placed. It is a matter of increasing plaintiff probabilities of attracting demands for successful arrests of ships, no matter the underlying cases should be heard.
However, Defendants hold often a credible proof that said ship must be released immediately as she is unrelated to the trail or even worse, the ship is scheduled to pass through the Panama Canal or is on charter at the time of the arrest. There are common scenarios when the defendant must pay for the bond or lodge an appeal to the arrest enforcement order, expressing either that said ship does not belong to the defendant or that with the arrest, the plaintiff is violating a prior and express no-arrest undertaking or, that the plaintiff seeks to enforce a non-existing maritime liens under the applicable law.
Either way, arresting a ship or defending a ship against an arrest are legal steps which require very qualified local assistance. Panama is not a party to neither the Brussel´s Arrest Convention 1952 nor the Geneva Arrest Convention 1999,which leave foreign clients in a weak position for ascertaining the outcome or, indeed, for predicting the risks claim-wise.
