Panama: Filipino Crew Claims – Validity Of Release

March 2001

The Panamanian Maritime Court, in spite of a prior favorable Supreme Court ruling, had routinely held the releases signed in the Philippines as void for the purpose of tortious liability. However, in a recent case involving such a release, the Court was persuaded that the release constituted a true, valid, and pressure-free transaction of ALL claims, including "tort".

In this most recent case, plaintiff was a crewmember who suffered an injury onboard the vessel, which resulted in the loss of a foot. The crewmember signed a "Release of All Rights". Subsequently, he filed an action before the National Labors Relation Commission (NLRC), where the "Release of All Rights" was examined by the Labor Arbiter who explained its consequences to the crewmember. The crewmember re-signed the release before the Labor Arbiter. Consequently, the Labor Arbiter issued a dismissal of the NLRC process.

The Maritime Court convened a special hearing to decide this issue. After hearing the relevant arguments by the parties, the Court was persuaded that the Labor Arbiters of the NLRC had reviewed and approved the release, and that the matter had been filed and dismissed before the NLRC only AFTER the Arbiter was satisfied that the plaintiff understood the consequences of the release and dismissal. Therefore, the Maritime Court held that the release was valid under the circumstances and dismissed the case.

This decision can be appealed to the Supreme Court, after the transcripts of the hearing are made part of the record, which could take another 4-6 months. Based on prior Supreme Court rulings in connection with releases, we are optimistic that the Supreme Court would, if the matter were appealed, confirm the Maritime Court’s ruling.

 

With thanks to De Castro & Robles, Panama, for supplying this information.