Arias, Fábrega & Fábrega innovated to expand the scope of interpretation of the rules of wrongful arrest to obtain the release of an administrative injunction (flag arrest) over a vessel.  

The matter involved the defense of ATLANTIC PANAMAX 1 AS within the ordinary maritime proceedings brought before the First Maritime Court of Panama against it by DST SHIPPING INC.

It contemplated a flag arrest (i.e. an injunction) against the Panamanian registered vessel DST DRAMMEN, which restricted the transfer in ownership and encumbrances before the Public Registry of Property of Vessels and the deletion of the vessel from the registry, in respect Merchant Marine Administration of the Panama Maritime Authority.

The claim consisted in the reimbursement of amounts of up to USD 847,300.00 for expenses of the Vessel supposedly paid up by DST SHIPPING INC. pursuant to a Ship Management Agreement between DST SHIPPING INC. and TREVISO SHIPTRADE INC. under the assertion that ATLANTIC PANAMAX 1 AS was liable for the appointment of DST SHIPPING INC. and to cover the alleged claim for reimbursement.

ARIFA became the first law firm to innovate in the application of the rules of wrongful arrest (“Apremio”) to lift the administrative precautionary measure in the registry, such as the “flag arrest”, by successfully having admitted the motion on the grounds that the plaintiffs had previously agreed not to pursue any arrest or similar action against the vessel, which is one of the grounds to obtain to challenge an arrest, as a wrongful one. The Court ruled in favor of ATLANTIC PANAMAX 1 AS ordering to lift the injunction over the vessel DST DRAMMEN.

In combination with the forgoing, in this case ARIFA was also successful in obtaining the arrest of the amounts consigned by the plaintiff under a certificate of judicial deposit, as liability bond in connection with the granting of the flag arrest, as a means to secure an eventual enforcement order to cover the payment of damages and judicial costs, to which the plaintiff would be liable as a consequence of the release of the flag arrest, allowing the owners to further dispose of the vessel.

ARIFA legal team also innovated in the way on how to apply the clauses of a charter-party, in coordination with English lawyers, in the context of an “agreement not to arrest” the vessel, in the context of the petition for the flag arrest.

Other firms have taken our model application to do pursue in a similar manner the release of flag arrests before the Maritime Courts of Panama.