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Pirates of the Caribbean

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A tale of foreign investors navigating shady rules, a corrupt judicial system, unscrupulous attorneys and an assortment of political games.

BY SUSAN AVERY FORD

The story begins in 2001, with a high profile, $80 million dollar residential project called Valle Escondido, in Boquete, Panama. This project, the first to be funded by foreign investors, has tipped an unprecedented real estate boom in Panama.  It has also spurred the debate over corruption, an inept judicial system and a stall in the country’s democratic growth.

In an effort to cooperate with a local farmer who needed access through the project to his 16 hectares (approximately 40 acres) of land, project managers allowed passage on the condition that his workers be transported via truck, to and from the boundaries of the property. Shortly thereafter, about 50 indigenous workers came through the property carrying signs claiming that they had been held hostage on the farm because they were not being allowed passage through the project. Over the next several days national papers ran the story and the TV news showed videos of the workers reuniting with their families at the front gate, claiming to have been “held hostage” for weeks.

CRIMINAL ACTION AND JUDGMENT

The farmer then filed criminal charges against the project for kidnapping and prevention of access to his farm. 2½ years later the criminal court found in favor of the project, dropping all actions and judgments. The criminal case clearly established that the farmer was never denied access to his property; furthermore, he had no legal right to enter his property through Valle Escondido.

During the criminal process, Valle Escondido had a lien placed against it for $1.35 million, thanks to a peculiar Panamanian law called “sequester.”  The farmer claimed he had lost his coffee crop because he was prevented from picking his harvest. Through use of “sequester," he was able to place a hold on the property, preventing the owner from selling it until the case was settled. With the approval of a willing judge, the sequester amount was decided to be 27 times the amount of the actual value of the farmer’s crop. 

The case moved on to civil court, which unlike American civil law, dictates that precedents set by previous court rulings are invalid. Each case is heard and judged on its own merit. Nearly six years later, circuit civil court Judge Mario Alberto Batisita issued his ruling in favor of the plaintiff for an unprecedented amount of $945,184.

PANAMA SUPREME COURT

The case was appealed and went before the Superior Tribunal of the district and on August 10th 2007 Dimas M. Moreno expeditiously ruled in favor of the plaintiff.

Now the case has been sent before the Panama Supreme Court magistrate to decide if it merits an additional review and judgment by the highest court. If the Supreme Court refuses to review the case, the appeal process will end. If this case is not heard by the Supreme Court and if the final judgment is not made based on the facts of the case then every foreign investor in Panama is at risk.

Susan Avery Ford is a freelance writer living in Los Angeles, California.

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