Maritime Liens & Ship Arrest

Maritime Liens in Panama are set forth in Law 55 of 2008, on Maritime Commerce, and are listed as liens against the vessel, the freight and the cargo.

The following liens will have privilege over the vessel and will concur on its price in the following order:

• any judicial costs caused in the common interest of the maritime creditors;

• any expenses, compensation and salaries for assistance and salvage;

• any salaries, remuneration and compensation due to the captain and crew;

• the naval mortgage;

• any credits in favour of the Panamanian State for fees and taxes;

• any salaries and stipends due to stevedores and dock workers hired directly by the owner, operator or captain of the vessel to load or unload it;

• any indemnities due for damages caused by fault or negligence;

• any amounts owed by way of contribution in general averages;

• any amounts owed by virtue of obligations contracted for the necessities and provisioning of the vessel;

• any amounts taken on the bottomry of the vessel and rigging for supplies, arms and apparel, and insurance premiums;

• any salaries of pilots and watchmen and conservation and custody expenses of the vessel, its rigs and supplies;

• any indemnities owed to carriers and passengers for failure to deliver the goods carried or for any damages thereto imputable to the captain or the crew;

• the price of the last acquisition of the vessel and any interest due.

The following liens will have privilege over the freight and will concur on its price in the following order:

• any judicial costs caused in the common interest of creditors;

• any expenses, indemnities and salaries for assistance and salvage;

• any salaries, remuneration and compensation due to the captain and crew for the voyage in which the freight was earned;

• any amounts due by way of general averages contributions;

• bottomry bonds on freight earned;

• insurance premiums;

• any amounts of capital and interest owed by virtue of the obligations contracted by the captain on the freight, with the legal formalities;

• any indemnities owed to carriers and passengers for failure to deliver the goods carried or for any damages thereto imputable to the captain or the crew;

• any other duly registered debt guaranteed by bottomry bond or naval mortgage or pledge on the freight.

The following liens will have privilege over the cargo and will concur on its price in the following order:

• any judicial costs caused in the common interest of creditors;

• any expenses, indemnities and salaries for assistance and salvage;

• any commercial taxes or fiscal rights owed at the place of unloading;

• any transportation and cargo expenses;

• any leasing of storage for the things unloaded;

• any amounts owed by general averages contributions;

• bottomry bonds and insurance premiums;

• any amounts of capital and interest owed by virtue of the obligations contracted by the captain on the freight, with the legal formalities;

• any other loan with pledge on the cargo, if the lender holds the Bill of Lading.

Liability in Personam for Owners or Demise Charterers

A vessel may be arrested in rem, regardless of the owner’s personal liability. Notwithstanding, the owners or demise may be held liable in an in personam claim if the applicable law so allows.

Arresting a Vessel

To obtain an arrest order it is necessary to file an arrest request and complaint, with prima facie evidence of the claim. The plaintiff must also cover the court arrest and maintenance expenses. In the Panamanian jurisdiction, the arrest is available in three instances:

• Physically to Seize Property Susceptible to Arrest in Order to Make Effective Privileged Maritime Liens over That Property.

• To Bring within the Jurisdiction of the Panama Maritime Courts Cognisance 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.

• To Assure That the Proceedings Will Not Have an Illusory Effect, and Keep the Defendant from Transferring, Dissipating, or Encumbering Properties Susceptible to Those Measures.

Further information, please contact our Maritime Law and Shipping Litigation Team

PANAMA: María Teresa Diaz (mdiaz@pmalawyers.com) | Belisario Porras (bporras@pmalawyers.com) | Nadya Price (nprice@pmalawyers.com) | Joaquín de Obarrio (jdeobarrio@pmalawyers.com)

UK: Enrique Sibauste (esibauste@pmalaywers.co.uk)

- An extract of the Panama Shipping Guide 2021, originally published by Chambers & Partners