Shipping Litigation in Panama

The Maritime Courts of Panama hold a critical role in international shipping due to the Panama Canal's global significance and the extensive flow of cargo through the Ports of Balboa (Pacific) and Cristobal (Atlantic). Given Panama's importance as a maritime hub, shipping litigation cases are handled efficiently and with urgency to meet the needs of the global shipping industry.

At Gerli & Co., we provide comprehensive legal support for clients involved in maritime disputes across all aspects of shipping law, including:

• Cargo claims
• Vessel arrest and release procedures
• Marine insurance claims
• Maritime liens and privileged claims
• Charter party disputes
• Claims related to vessel damage or total loss
• Legal representation for services rendered to vessels

Vessel Arrest in Panama

Vessel arrests in Panama are governed by the Maritime Procedure Code (Law No. 8 of 1982, as amended), which provides a fast and effective mechanism for securing maritime claims. Panama offers distinct advantages in arrest procedures due to its high vessel traffic and legal framework, making it an optimal jurisdiction for creditors and claimants.

Vessel arrests are commonly initiated against vessels transiting the Panama Canal or calling at Panamanian ports. Given that a vessel takes approximately eight hours to transit the canal, and there is no possibility of turning back once transit has begun, timely legal action is essential for claim enforcement.

Because of the mobile nature of vessels, shipowners may attempt to evade creditors by moving assets beyond jurisdictional reach. The Panama Maritime Courts provide an effective remedy, allowing claimants to initiate arrest procedures against vessels in transit or anchored in Panama. This legal framework ensures that creditors can recover their claims efficiently by obtaining a court order for the vessel's detention.

Maritime Jurisdiction in Panama

Panama's Maritime Courts operate independently from the civil court system, ensuring a fast, specialized, and flexible process for maritime disputes. Vessel arrests can be initiated under three key circumstances:

1. To secure a payment guarantee, preventing the vessel owner from disposing of the vessel or assets before settling debts.
2. To establish jurisdiction over shipowners whose vessels transit through Panama or operate within Panamanian territorial waters.
3. To enforce privileged maritime liens, securing creditor claims directly against the vessel.

In Panama, claimants may pursue vessel arrest proceedings through in rem actions (against the vessel itself) or in personam actions (against the shipowner). The efficient legal framework allows for swift enforcement, ensuring that shipowners comply with financial obligations.

Maritime Courts of Panama

The First Maritime Court of Panama was established by Law 8 of 1982 to replace the former U.S. District Court of the Canal Zone following the Panama Canal Treaties. This court initially held exclusive admiralty jurisdiction over maritime disputes.

Due to increasing maritime litigation volume, a Second Maritime Court was established in 2001. Both courts share jurisdiction over cases arising from maritime commerce and trade, handling disputes efficiently and in line with international maritime legal principles.

The Panama Maritime Courts exercise jurisdiction over:

• In rem proceedings against vessels or cargo within Panamanian waters or ports.
• In personam claims, where jurisdiction is established by attaching property owned by the defendant in Panama, including vessels, cargo, bunkers, or financial assets.

To initiate a vessel arrest, the plaintiff must provide:

• A bond of USD 1,000 as security for court costs.
• A deposit of USD 2,500 with the Court Marshal to cover initial expenses related to the arrest.

Panama's efficient and streamlined procedures make it one of the most attractive jurisdictions for vessel arrests, particularly for ships transiting the Panama Canal or calling at Panamanian ports.

Urgent Maritime Legal Services – 24/7 Availability

The Maritime Courts of Panama are available 24/7, 365 days a year to handle urgent maritime matters, including vessel arrests, injunctions, and ship releases. Our firm ensures that legal procedures are executed promptly and with minimal financial impact on shipowners and charterers.

At Gerli & Co., we specialize in Admiralty and Maritime Law, focusing on litigation before Panama's Maritime Courts and Arbitration Tribunals. We represent shipowners, charterers, P&I Clubs, and marine insurers in legal proceedings related to vessel arrests, maritime claims, and regulatory compliance.