Alternate Dispute Resolution Law at Panama
Panama has developed a robust legal framework for Alternative Dispute Resolution (ADR), encompassing arbitration, mediation, and conciliation. The country has positioned itself as a significant hub for international commercial arbitration in Latin America.
🇵🇦 Legal Framework for ADR in Panama
1. Arbitration
Law No. 131 of 2013: This law governs both national and international commercial arbitration in Panama. It is based on the UNCITRAL Model Law and aims to promote Panama as an international arbitration center. The law allows parties to choose their arbitrators, determine the seat of arbitration, and select the applicable law and language. Arbitral awards are generally final and binding, with limited grounds for annulment .
Constitutional Recognition: Article 202 of Panama's Political Constitution recognizes arbitration as a legitimate means of dispute resolution, granting it constitutional status .
International Treaties: Panama is a signatory to several international treaties, including the New York Convention (1958), the Inter-American Convention on International Commercial Arbitration (1975), and the Washington Convention (ICSID) (1965), facilitating the recognition and enforcement of foreign arbitral awards .
2. Mediation and Conciliation
Decree Law No. 5 of 1999: This law regulates mediation and conciliation in Panama. Mediation is defined as a non-adversarial process aimed at facilitating communication between parties to reach a mutually agreeable solution. Conciliation involves a neutral third party assisting the disputing parties in reaching a settlement .
Judicial Support: While ADR methods are not mandatory, judges are required to inform parties about the availability of mediation services when accepting a civil complaint .
3. Public-Private Partnerships (PPP) and ADR
Law No. 93 of 2019: This law mandates that PPP contracts include a phase of amicable dispute resolution for technical or economic disputes. If an amicable solution cannot be reached, disputes may be submitted to a dispute board or directly to arbitration .
⚖️ Enforcement and Appeal Mechanisms
Enforcement of Arbitral Awards: National arbitral awards are enforced through civil courts, while international awards are recognized and enforced under the New York Convention and related treaties .
Appeal Process: Arbitral awards can be challenged before Panama's Supreme Court on limited grounds, such as incapacity of a party, lack of due process, or decisions on matters not subject to arbitration .
🏛️ ADR Institutions in Panama
Arbitration and Settlement Centre of Panama (CECAP): A prominent institution offering arbitration services and maintaining a roster of national and international arbitrators.
Center of Dispute Resolution (CESCON): Specializes in ADR services for various sectors, including construction, and may act as an appointing authority in the absence of party agreement .
🔍 Recent Developments
Cobre Panama Arbitration Case: In 2024, Canadian mining company First Quantum Minerals initiated arbitration against Panama over the closure of the Cobre Panama copper mine. The dispute was resolved in 2025 when the company dropped its $20 billion claim, allowing for potential negotiations to resume
✅ Summary
Panama's legal framework for ADR is comprehensive and aligns with international standards, making it an attractive jurisdiction for resolving commercial disputes. The country's commitment to arbitration, supported by constitutional recognition and adherence to international treaties, underscores its role as a leading center for dispute resolution in Latin America.
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