PANAMA Law and Practice Contributed by: Nadya Price and Joaquín De Obarrio, Patton Moreno & Asvat
the merits (ie, an injunction order). Such a measure is normally in the form of an order against the sale, transfer or mortgage of a Panamanian vessel. Accordingly, the Maritime Court may issue an order restraining the sale of a Panamanian-registered vessel upon the filing of a complaint against the vessel or its owner with a petition accompanied with evidence of the existence, and the merits, of the claim. The plaintiff must deposit security with the court, which is fixed by the court as between USD10,000 and USD50,000. The security must be posted in: • cash; • certified cheques issued by banks licensed to operate in Panama; • Panamanian public debt titles; or • any other guarantee agreed by the parties. The plaintiff must file a complaint, together with secu - rity for damages and all the preliminary evidence to support the facts of the complaint. Initially, documents may be filed in fax or PDF copies with an undertaking to produce the originals within a short period of time. Once issued, the court sends the order to the Depart - ment of Registration of Titles and Encumbrances of the Shipping Bureau, and such authority makes a note on the records of the vessel. 5.9 Releasing an Arrested Vessel Once the arrest is executed, the defendant or any other interested party may petition the release of the arrest by posting a security which is affixed by the court to cover the amount of the claim, interest (three years), arrest expenses and legal fees. The security must be posted in: • cash; • certified cheques issued by banks licensed to operate in Panama; • Panamanian public debt titles; or • any other guarantee agreed by the parties. The parties may agree on the amount, the nature and the conditions of the security which will be substi - tuted for the arrested vessel, and must jointly petition
the judge for the lifting of the arrest, consigning the agreed bond at the same time. The parties may agree on other types of guarantees such as letters of indem - nity/letters of undertaking (LOIs/LOUs), bank letters or property and casualty (P&C) insurance letters. If the parties do not reach an agreement as to the amount and nature of the security to be consigned, the court shall, on a motion by the defendant or a third party interested in lifting the arrest, set the amount of the security so that it covers the amount claimed in the complaint plus interest (three years), costs and expenses. This amount may not exceed the market value of the property. Notwithstanding the foregoing, when the arrest is requested to make effective proprietary rights, or the possession and the use of the property under arrest, the arrest may not be lifted or suspended. 5.10 Procedure for the Judicial Sale of Arrested Ships When ordering a judicial sale, the court will instruct the marshal to carry out the sale procedure. The court will appoint a surveyor to survey the vessel and determine its market value. The plaintiff must pay the surveyor’s professional fees. The court order fixing the judicial sale dates must be published at least twice a week until the sale is com - pleted, in national newspapers and any other special - ised publications that the parties deem convenient. Bids and counterbids will be received in writing by the marshal. On the same date, the oral bidding and coun - terbidding process will begin. Bids that have been submitted to the marshal will be announced and the vessel will be provisionally adjudicated to the bidder with the highest price. The successful bidder must pay the full purchase price within three working days after the provisional adjudication of the vessel. Payment must be made in cash, or by a certified cashier’s cheque in the name of the Maritime Court. On the date of the sale, the marshal will issue a provisional adjudication certificate in favour of the successful bidder.
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