Reference is made to Article 1515 of the Code of Commerce and to Law No. 43 of 18 November 1984, which prescribe that the mortgage contract of a vessel, if executed in the Republic of Panama or before an authorized official of the Republic abroad, must be recorded in a public deed.

This contract may also be executed abroad subject to the laws and formalities of the country in which it is done. In every instance, this contract must include:

1. The name and domicile of the mortgagor and that of the mortgagee.
2. The fixed or maximum amount of capital secured thereby. The mortgage shall also secure, in addition to the capital, all earned interest, costs, collection expenses, amounts due as a result of the fluctuations in the currency or means of payment and any other sums agreed upon by the mortgage contract.


It is to be presumed, both as to between the parties and as between third parties, unless proved otherwise, that thee amounts owed, whether for capital, interests and other sums secured by the mortgage, are the amounts mentioned in the complaint.

3. The dates for the payment of the capital and the interests, or the method used to determine said dates, except if the mortgage is created to secure obligations payable on demand, future obligations or obligations subject to conditions precedent.
4. If the interests have been agreed on, the mortgage contract must set forth the interest rate agreed upon or the manner in which same may be determined.


The interests may be stipulated with reference, among others, to the rate prevailing at a given market, or at the rate used by banks for prime debtors in any market. The rate may be adopted as of that prevailing at the time the contract is signed, or according to rate fluctuations occurring during the term of the credit.





Credits secured by ship mortgages shall not be subject to maximum interest; and, therefore neither the provisions of Law 5 of 1933 nor those of Law 4 of 1935 shall be applied. Nevertheless, the National Banking Commission may establish a maximum rate of interest for the credits when the mortgage lien is created on ships engaged in local trade.

5. The name, patent number, call letters, if any, tonnage and measures of registry.
   
   If the ship mortgage is under construction, the provisions established in Article 1518 must be indicated.
6. When several ships are mortgaged to secure one debt, a determination may be made as to the amount secured by each. If such determination is not made, the mortgagee may proceed against any or all of the vessels for the total amount secured by the mortgage.