Panama: Recent Developments Concerning Filipino Crew Claims

(Sea Venture Volume 20)

In January of this year, the Panama Maritime Court granted a  motion to decline jurisdiction in an action in rem against the "Stolt Vinland" in which a Filipino crewmember was claiming in respect of personal injuries¹.  In an encouraging change from its earlier enunciated position, the Maritime Court held that the National Labor Relations Commission of the Philippines (NLRC) was the proper and exclusive forum to resolve all claims by crewmembers against their employers under the applicable contract of employment approved by the Philippine Overseas Employment Administration (POEA), whether such claims sounded in tort or in contract.   The Court further held that pursuant to legislation enacted in the Philippines, local manning agents are jointly and severally liable for the actions of the employer/shipowner.   The crewmember may, therefore, file his claim in the Philippines (before the NLRC) against the local manning agent without the need to serve process on the absent shipowner.

The Court further interpreted the Philippine law and procedure to mean that any award made in favour of the crewmember could be enforced by levying on the performance bond deposited by the manning agent, with the proviso that if such bond were insufficient to satisfy any final award, then execution could be levied against the property of the manning agency or the personal property of the directors/partners thereof.

This was the first decision by the sitting Maritime Judge in which jurisdiction was declined based on the concept of forum non conveniens subject, however, to the following conditions:  (a) that the Maritime Court would retain the security posted in Panama pending the final determination of any action brought in the Philippines, (b) that a time bar defense could not be pleaded in the Philippines, (c) that a voluntary appearance be made by defendant(s) and (d) that the dispute be submitted for decision on the merits without presentation of any technical defenses.

This decision was supported by the May 14, 2001 decision of the Panama Supreme Court in the case of Helen Tobias, et al vs. M/V Star Cebu² which reversed the Maritime Court´s refusal to grant a  motion  to decline jurisdiction based on forum non conveniens.   This case involved a wrongful death action filed by the widows and minor children of 2 Filipino crewmen aboard the "Star Cebu", a Philippine flag vessel.  The alleged tort occurred while the vessel was in Brazilian waters.  The Supreme Court agreed with the argument that  the vessel´s flag, the nationality of the claimants, the applicable law  and the jurisdiction clause contained in the POEA contract all confirmed the Philippines as the appropriate forum for this action. The Supreme Court, however, ordered that the security posted in Panama at the time that the vessel was arrested would be retained by the Maritime Court pending the outcome of any proceedings initiated in the Philippines.  

A mere week after its reversal of the "Star Cebu" decision, the Supreme Court,  again reversed an earlier decision by the Maritime Court refusing to decline jurisdiction in a wrongful death action filed by the survivors of numerous Filipino crewmembers against the Panamanian corporate owner of a Panamanian flagged vessel,  whereon the alleged tort occurred³.   Of importance here, was the Supreme Court´s holding that the Panamanian contacts (mentioned above) did not provide sufficient reason to retain jurisdiction of the case in Panama given the existence of the POEA which mandated the Philippines as the exclusive forum for the resolution of any dispute flowing thereunder.  It is left to be seen what will occur if one of these cases, in which the forum non conveniens argument has succeeded in Panama, is not accepted by the NLRC in the Philippines and an attempt is made to re-file or re-docket it in Panama.

In the  case of Alonsabe vs. M/V Diamond A ⁴, the plaintiffs attempted to attack the validity  of releases executed in the Philippines by crewmembers or their heirs/survivors. The Panama Supreme Court reversed the Maritime Court´s refusal to accept such releases as valid.   The Court held that the party (plaintiff) challenging the validity of a release has the burden of proving its invalidity.  The Supreme Court further held that plaintiffs had failed to prove  that the releases had been obtained by fraud, lack of informed consent or consideration and in violation of public policy.  (The Court did, however, affirm the holding of the lower Court concerning the invalidity of releases executed by a parent on behalf of his minor children because of the parent´s failure to obtain settlement approval from the appropriate Philippine Court.)

Finally, the Maritime Court some months ago granted an "ad instanter" motion to set aside the arrest of a vessel which resulted from a claim for personal injury by a Filipino crewmember.  The motion was based on a clause contained in the recently revised release executed in the Philippines by the crewmember in question.  Pursuant to such clause, the crewmember agreed not to subsequently file any claim or action against the owners in tort or on any other ground and also not to subsequently seek the arrest of the vessel involved in the alleged accident or any other vessel owned or operated by the owners, charterers or operators.

There are still several appeals pending before the Supreme Court on similar or related issues. It is hoped that the High Court will reiterate its previously expressed position with respect to the forum non conveniens issue and the validity of releases executed by Filipino crewmembers.

 

With thanks to Gabriel R. Sosa III, Partner, De Castro & Robles, Panama for preparing this article.

1Victor Cataby vs MV Stolt Vinland. De Castro & Robles acted for the vessel interests.
² De Castro & Robles also acted for the vessel interests in this case.
³ Luz Marina Reyes, et. al vs. Diamond Camelia S. A. and Mitsui Osk Lines
⁴ De Castro & Robles acted for the owner and it’s P&I Club in this case.