Arbitration

UNCITRAL Model Law

Is the arbitration law based on the UNCITRAL Model Law?

Generally, yes, with influence of the ICC Arbitration Rules, as well as the arbitration laws of other jurisdictions (Spain, France, Mexico and others).

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.

Choice of arbitrator

If the arbitration agreement and any relevant rules are silent on the matter, how many arbitrators will be appointed and how will they be appointed? Are there restrictions on the right to challenge the appointment of an arbitrator?

Generally, the parties are free to appoint the number of arbitrators, provided the tribunal is composed of an odd number. If the parties cannot agree to the number of arbitrators, the dispute shall be decided by a sole arbitrator. If one of the parties is the state or a state entity, then the tribunal shall consist of three arbitrators.

It the arbitral tribunal is composed of three arbitrators, then each party appoints one arbitrator, and the appointed arbitrators then appoint the chair. If a party fails to appoint an arbitrator within the following 30 days after the last appointment of an arbitrator, of if within such term the arbitrators do not appoint the chair, then the appointment can be requested by any of the parties, from a national or international institution, pursuant to their respective rules.

An arbitrator can only be challenged in those circumstances when justified doubt exists regarding the arbitrator’s impartiality or independence, when the arbitrator does not meet the qualifications agreed by the parties, or when the arbitrator does not meet the requirements of law (such as individuals who have been found to have seriously breached the code of ethics of an arbitral institution, or individuals declared criminally liable for fraud).

Arbitrator options

What are the options when choosing an arbitrator or arbitrators?

The parties generally agree that each shall appoint one arbitrator. The chair may be appointed by the institution or the party-appointed arbitrators, depending of the arbitration agreement and applicable rules. The most active arbitral institutions have lists of arbitrators, for both domestic and international arbitration, from which the chair of the tribunal is appointed following the relevant institution’s rules. The candidates are generally experienced practitioners in their fields, and generally have served as arbitrators, and include national as well as internationally renowned specialists.

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.

Court intervention

On what grounds can the court intervene during an arbitration?

Generally, court intervention during an arbitration is not admissible. The parties can agree to arbitrate a court dispute, provided the matter can be submitted to arbitration. The courts can intervene prior to the formation of the arbitral tribunal by providing interim relief or precautionary measures at the request of the plaintiff, or they can intervene at the request of the arbitral tribunal, for purposes of assisting the tribunal with interim relief or with the production of evidence.

Interim relief

Do arbitrators have powers to grant interim relief?

Yes.

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) and 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, or in the 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 the 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.

Costs

Can a successful party recover its costs?

Generally, yes. When filing closing statements, the parties are generally requested to submit a report on incurred costs, including legal expenses, expert fees, arbitrator and services fees of the institution, as well as general expenses incurred during the arbitration, for the evaluation by the arbitral tribunal and inclusion in the award.

Law stated date

Correct on

Give the date on which the above content is accurate.

16 April 2020.