PANAMA Law and Practice Contributed by: María Teresa Diaz, Nadya Price and Joaquín De Obarrio, Patton Moreno & Asvat
5. Passenger Claims 5.1 Laws and Conventions Applicable to the Resolution of Passenger Claims Chapter IV of the Maritime Commerce Law regu - lates contracts for the carriage of passengers by sea, while Chapter II of Law 8 of 1982 (the “Code of Maritime Procedure”) regulates the procedure for limiting a ship-owner’s liability. Article 1651 of Panama’s Code of Commerce establishes a one-year time-bar provision for indemnities derived from shipping transport or charter contracts, and a time-bar provision of six months if its issuance is within the territory of the Republic of Panama. Available limitations on liabilities in respect of a passenger’s claim include: • claims related to death and bodily injury which occurred on board or were directly connected to the exploitation of a vessel, or to salvage or assistance operations, and damages resulting from any of these causes; • claims related to damages resulting from a delay in the transportation of passengers or their luggage by sea; and • claims for damages different from those aris - ing from contractual rights, caused in direct connection with the exploitation of the vessel, or with salvage or assistance operations. Panama’s Maritime Commerce Law Article 244, on maritime liens, includes “compensation for damages caused by fault or negligence” which has been interpreted to include personal injury in a general sense.
The judicial sale of arrested vessels is under - taken by the Maritime Courts. A private sale may be allowed extrajudicially if the parties have agreed to such terms in the mortgage or loan documents, with the ship-owner granting an irrevocable mandate to the mortgagee. 4.11 Insolvency Laws Applied by Maritime Courts Panama enacted Law 12 of 2016 on insolvency proceedings (the “Insolvency Law”), which came into effect in January 2017. The Insolvency Law includes provisions similar to those in Chapter 11 of the United States Bankruptcy Code, creat - ing a specialised insolvency jurisdiction before the civil courts. Bankruptcy financial protection will be granted by the civil courts to the debtor who undergoes a reorganisation process under the Insolvency Law. During this period, no executory proceed - ings, executions of any kind, restitution of assets or evictions may be initiated against the debtor. The Insolvency Law is still recent and has not been extensively tested by the courts. 4.12 Damages in the Event of Wrongful Arrest of a Vessel Any party who by mistake, fault, negligence or bad faith seizes an asset or property that does not belong to the defendant or in contravention of a prior and express agreement between the parties (or where a party requests an arrest for a maritime lien which is inexistent or time-barred by the statute of limitations) will be responsible for the damages caused, as well as for the pay - ment of the expenses and costs arising from that action.
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