Panama on Thursday granted asylum to Ecuadoran newspaper publisher Carlos Eduardo Perez Barriga, one of three executives facing prison after losing a libel suit seen as a key test of press freedoms in Ecuador.
The announcement came shortly after Ecuador's high court ruled against the El Universo newspaper in the suit filed by leftist President Rafael Correa.
Panama "after considering the arguments presented in writing by Mr Perez Barriga, has looked upon his request for diplomatic asylum favorably," said a statement from Panama's embassy in Ecuador.
The request had been granted because there was "a reasonable fear for his personal security." Perez Barriga was already in the embassy when the statement was released.
Correa responded to journalists in Quito that he was surprised by the move from Panama, which has a long tradition of offering political asylum.
"We're surprised... because these men are not politically persecuted but common law prisoners," Correa said.
Ecuador's National Court of Justice (CNJ) on Thursday sentenced the three top executives of the media company to three years in prison and fined them $40 million, denying an appeal as "out of order."
Correa sued the El Universo daily in March 2011 alleging "defamatory libel" over a column by former opinion page editor Emilio Palacio accusing the president of crimes against humanity.
Palacio suggested that a future president could take Correa before a criminal court for ordering the military to fire at its discretion on a hospital on September 30, 2010, during a police uprising.
A lower court judge ruled against the newspaper in July, handing down the $40 million judgment and prison sentences against the paper's publisher, as well as deputy directors Cesar Perez and Nicolas Perez and Palacio, who are all currently in Miami. An appeals court upheld the sentence in September.
The latest ruling will not take effect for three days, according to defense attorneys.
The case has been widely criticized by rights groups as a blow to freedom of speech in Ecuador and also calls into question the independence of the Ecuadoran courts.
Correa appeared to soften his stance Thursday, saying he was considering whether to ask the courts to lift the jail terms and fine, without making any promises.
"We're going to consult with people we trust, with the political executive and we'll announce relevant decisions to the country," Correa told foreign journalists.
The defense has vowed to take the case to the Interamerican Human Rights Commission and then to the Interamerican Human Rights Court. A lawyer for the newspaper called the $40 million fine "irrational and immoral."
Correa has said the fine will go to an official global warming initiative.
The newspaper's management said the fine would likely bankrupt it, given that its total capital is just $35 million.
Cesar Perez said in Miami Thursday that he would stay out of Ecuador for now and seek European support, but that he was not yet seeking asylum. Nicolas Perez, who has US nationality, said that he would seek support in Washington in the coming days.
Palacio last week sought political asylum in Miami and is considered a fugitive from Ecuador.
Correa has taken other legal action against what he calls the "corrupt" media, leading critics to accuse him of attacking free speech in the South American nation of 14 million.
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