Jon Werner’s Testimony on US Maritime Law Wins Key Decision in Panama Vessel Case

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Jon Werner of MMWR’s Maritime Practice Group recently testified as an expert in US maritime law at a trial conducted in the First Maritime Court of Panama. The case involved the arrest of a vessel based on an asserted lien for the provision of necessaries under US law. The necessaries in question were standby tug services which the terminal required whilst repairs to the vessel were being performed. The vessel’s local agent had ordered the tug services and ultimately paid the tug company’s invoices after the vessel disputed responsibility for same.

Jon’s expert testimony centered on the issue of whether, under the Commercial Instruments and Maritime Liens Act (CIMLA), the local agent had a valid basis to assert a maritime lien on the vessel. While it may sound surprising, Jon’s opinion was that there was no valid basis to assert a maritime lien. The key consideration was that because the local agent did not provide any services directly to the vessel, and instead simply arranged for services to be provided by the tug company and subsequently advanced funds to pay for those services, a longstanding (but often overlooked) doctrine of maritime law known as the rule of advances came into play.

Under the rule of advances, the party asserting a lien must show that the funds were advanced on behalf of the vessel on the order of the master or the person in charge of managing the vessel for the purpose of satisfying a pending or future lien claim against the vessel. The problem for the local agent was that they advanced the funds without first receiving an order from the master or someone else with the requisite authority. As a result, the court found there was no valid basis for a maritime lien under US law and the claimant was ordered to return the security it had obtained via the vessel arrest and pay the vessel owner’s costs.

While the ultimate credit for the win belongs to Luis Raven of Morgan & Morgan, the Panamanian trial counsel who retained Jon as an expert, the court’s decision adopted all of Jon’s opinions on the key issue.

If you have any questions regarding this case, please contact Jon Werner of Montgomery McCracken’s Maritime and Transportation Industry Group.

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