Panama rejects proposed merchant shipping accord

Attempts to shun excessive crew claims being filed in Panama by Filipino seafarers and their lawyers are bound to frustrate ship owners, P&I clubs and crewing agents after a proposed bilateral shipping agreement has failed to materialize.

For a number of reasons, Panama, whose canal has been the venue of several ship arrests to obtain tort claims due to injury or death suffered by crewmembers onboard, has rejected the bilateral shipping accord proposed by the Philippines.

The Panama Maritime Authority (AMP) believes that it would be "counterproductive to execute an agreement, which in principle, excludes the jurisdiction of our courts over labor matters in the case of seamen of Philippine nationality."

The proposed Philippines-Panama Merchant Shipping Agreement prevents Filipino seafarers from suing in Panama. It stipulates that any dispute or claim arising from or relating to a contract of employment on board ship of whatever nationality or registry "shall be referred for determination and exclusive resolution by the competent courts, tribunals or authorities of the country of seafarer's nationality."

"After evaluating the possibility of subscribing to such an agreement," says AMP administrator Jerry Salazar in his letter to Panama's Foreign Affairs Ministry, the situation will create an "exceptionality in the application of (Panamanian) Decree-Law 8," signed on February 26, 1999 in which the Panamanian government intends to expand coverage to other fields.

"Although juridically viable," according to Salazar, the "measure would put the seaman at a disadvantage vis-a-vis the shipowner since, first by contractual agreement and now by virtue of a Bilateral Agreement, the worker waives the judicial process granted thereto by the recently formulated statute..."

So far it is estimated that there are more than 100 ships, including those targeted for arrest on cargo and insurance claims, are on the watch list of a Panamanaian law firm. P&I clubs have been appalled over the high cost of bonds that run to about $50 million for the release of a number of ships with Filipino complainants still pending in Panama's admiralty court.

Another equally important consideration the AMP would not want to overlook is the existence of its "Law 8 of 30 March 1982 (as amended by Law11 on 23 May 1986)," which created the Admiralty Court of Panama. This law particularly Articles 17 and 164(2), established the jurisdiction of the admiralty court as "international" in nature.

Subscribing to the draft bilateral agreement, according to AMP, would be in violation of Panama's legislation and in contravention to Panamanian interests, one of which is to have an international forum.

The proposed changes particularly on seafarer's nationality clause would also mean preventing Filipino seafarers from filing tort claims in Panama, where claims settlement involving disability or death can run up to a minimum of $700,000 per seaman compared to a maximum of $50,000 and an additional amount of $7,000 under the age of 21 but not exceeding to four children as stipulated in the POEA-approved contract.