Arbitration

Arbitration agreements

What are the formal requirements for an enforceable arbitration agreement?

The arbitration agreement has to be in writing. An arbitration agreement shall be considered to meet this requirement whenever evidence of its contents can be produced by any means. This includes electronic communications that can be accessed for eventual confirmation. The existence of a written form can also result from the exchange of briefs of complaint and answer to the complaint, whenever a party affirms its existence and the opposing party does not object, or by reference to an arbitration clause existing in a document that would apply to the relevant contract.

Arbitral procedure

Does the domestic law contain substantive requirements for the procedure to be followed?

The law on arbitration contains substantive law provisions regulating matters such as the definition of domestic or international arbitration, matters that can be submitted to arbitration, the effects of the arbitration agreement, the default rule that arbitration shall be at law when the parties do not state the nature of the arbitration, and requirements for application for the annulation or enforcement of the award.

Award

When and in what form must the award be delivered?

In domestic arbitration, the general rule is that the award has to be delivered within two months following the filing of closing statements, and may be extended for an additional two months depending on the degree of complexity. In international arbitration, the award has to be delivered within the term provided by the relevant rules, or as agreed by the parties or the arbitral tribunal.

Generally, the arbitration award has to be in written form signed by the majority of the arbitrators. If there is no majority consent, then the chair can sign the award. The award has to include the analysis and motivations (except as otherwise agreed by the parties), it has to include the date and the seat of the arbitration; the award is served by the arbitral institution or the tribunal, as applicable, to the parties through delivery of a signed copy of the award. Generally, a single award is issued; however, multiple awards can also be issued, as may be agreed with the parties.

Appeal

On what grounds can an award be appealed to the court?

Appeal is not available against the arbitral award. The award can be challenged through an annulment application filed before the Fourth Chamber of the Supreme Court of Justice, on the following grounds:

  • that one of the parties to the arbitration agreement was under some incapacity under the law applicable to it, or the agreement is not valid pursuant to the law to which the parties subjected it or, if no provision was made in this regard, pursuant to Panamanian law;
  • that the party against was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was unable, for whatever reason, to present its defence;
  • that the award deals with a dispute that was not contemplated by the arbitration agreement, or that did not fall within the terms of the submission to arbitration, or contains decisions that go beyond the scope of the arbitration clause or the submission to arbitration. However, if the provisions of the award that refer to the matters submitted to arbitration can be separated from those that have not been submitted to arbitration, the former may be recognised and enforced;
  • that the formation of the arbitral tribunal or the arbitral proceedings did not conform to the parties’ agreement - except when such agreement breaches the arbitration law - or, in absence of an agreement, it did not conform to the arbitration law;
  • that the arbitration tribunal has ruled on a matter that could not be arbitrated; and
  • that the international arbitral award breaches international public policy; in case of a domestic award, that such award breaches Panamanian public policy.
Enforcement

What procedures exist for enforcement of foreign and domestic awards?

Foreign arbitral awards in Panama are recognised and enforced in accordance with either:

  • the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958);
  • the Inter-American Convention of International Commercial Arbitration (Panama, 1975); or
  • any other treaty ratified by the Republic of Panama on the recognition and enforcement of arbitral awards. The petition for recognition is filed before the Fourth Chamber of the Supreme Court of Justice of Panama.

In case of foreign awards where Panama served as the seat of arbitration, enforcement can be directly requested before the civil circuit courts, through judgment enforcement proceedings.

Domestic awards are enforced through judgment enforcement proceedings before the civil circuit courts.