International Commercial Arbitration at Panama
Absolutely! Here’s a detailed overview of International Commercial Arbitration in Panama:
⚖️ Legal Framework for International Commercial Arbitration in Panama
1. Panama’s Arbitration Law
Panama’s arbitration framework is primarily governed by Law No. 131 of August 14, 2013 (Ley No. 131 de 2013), which regulates arbitration proceedings.
The law is based largely on the UNCITRAL Model Law on International Commercial Arbitration, aligning Panama with international best practices.
The law applies to both domestic and international commercial arbitration.
2. Recognition and Enforcement of Foreign Arbitral Awards
Panama is a party to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, enabling the enforcement of foreign arbitral awards in Panamanian courts.
Panama also acceded to the Inter-American Convention on International Commercial Arbitration (Panama Convention, 1975), enhancing regional enforcement mechanisms.
🏛️ Arbitration Institutions in Panama
Panama Arbitration Center (Centro de Arbitraje de Panamá - CEP)
The primary arbitration institution in Panama.
Provides administrative support and procedural rules for arbitrations held in Panama.
Popular for both domestic and international disputes.
International Arbitration under Foreign Institutions
Parties often choose to submit disputes to well-known international institutions such as the ICC (International Chamber of Commerce), LCIA (London Court of International Arbitration), or CIETAC.
🧾 Key Features of Arbitration in Panama
✅ Party Autonomy
Parties may freely choose:
The seat of arbitration (within or outside Panama)
Language of arbitration
Arbitrators and number of arbitrators
Applicable rules (institutional or ad hoc)
📜 Enforcement
Panamanian courts generally support the recognition and enforcement of both domestic and foreign arbitral awards.
Enforcement may be refused on limited grounds such as public policy violation, improper notice, or invalid arbitration agreement as outlined in Panama’s arbitration law and the New York Convention.
⚠️ Grounds to Challenge Arbitral Awards
The law specifies grounds similar to the UNCITRAL Model Law, including:
Invalidity of arbitration agreement
Procedural irregularities
Lack of jurisdiction
Violation of public policy
🔍 Recent Trends and Developments
Panama’s strategic location as a logistics and trade hub increases its attractiveness as a seat for international arbitration in Latin America.
The government has made efforts to modernize arbitration laws and promote Panama as a center for dispute resolution.
Increasing preference for arbitration in international commercial contracts, especially in sectors such as shipping, construction, banking, and trade.
📌 Challenges
Arbitration remains less commonly used compared to litigation but is growing steadily.
Need for further development of arbitration expertise among legal practitioners.
Limited awareness among some domestic businesses.
✅ Conclusion
Panama provides a modern, internationally aligned arbitration framework, making it a reliable jurisdiction for resolving international commercial disputes. With a modern arbitration law, participation in key international conventions, and institutional support through the Panama Arbitration Center, Panama is emerging as a viable arbitration venue in Latin America.
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