PANAMA Law and Practice Contributed by: Jorge Molina Mendoza and Alberto de Urriola Rubio, FABREGA MOLINO
4.3 Court Intervention According to Panamanian arbitration legislation, an arbitration administering institution can intervene in the selection of arbitrators. This can happen when one of the parties has not appointed an arbitrator within the time established by law or the arbitration agree - ment, or if the appointed arbitrators cannot agree on the appointment of the third arbitrator. Intervention may also be required when the parties cannot agree on the appointment of a single arbitrator, or in multi- party arbitration, where the respective claimant or defendant parties cannot agree on the appointment of an arbitrator or, having each appointed one, the appointees cannot agree on the appointment of a third arbitrator. Regarding the limitations of these powers, it is worth noting that the arbitration institution must take into account the conditions required by the par - ties. The appointed arbitrator must be of a different nationality from that of the parties and, if applicable, from the nationality of the already appointed arbitra - tors. 4.4 Challenge and Removal of Arbitrators Law 131 of 2013 establishes that an arbitrator can be challenged if there are circumstances that give rise to justified doubts about their impartiality or independ - ence, or if they do not possess the qualifications agreed upon by the parties. 4.5 Arbitrator Requirements According to Law 131 of 2013, it is mandatory for a person appointed as an arbitrator to disclose all circumstances that may give rise to justified doubts about their impartiality or independence. Likewise, should such circumstances arise after their appoint - ment or during the proceedings, they must disclose such circumstances to the parties without delay.
5.2 Circumstances for Court Intervention According to Law 131 of 2013, an arbitral tribunal can address issues related to arbitral jurisdiction when one of the parties raises questions about the exist - ence or validity of an arbitration clause. Additionally, in Panama, negative decisions on arbitral jurisdiction (competence) can be reviewed by the Fourth Chamber of the Supreme Court. 5.3 Timing of Challenge The exception of incompetence of an arbitral tribunal must be raised no later than at the time of submit- ting the statement of defence. If an arbitral tribunal declares itself competent as a preliminary matter, any of the parties may file an annulment appeal before the Fourth Chamber of the Supreme Court of Justice within 30 days of receiving notification of the decision. 5.4 Standard of Judicial Review for Jurisdiction/Admissibility The standard of review in Panama is deferential. 5.5 Breach of Arbitration Agreement Ordinary courts in Panama will deal with any party initiating a process in contravention of an arbitration agreement by declaring the nullity of the proceed - ings and declining competence in favour of the cor - responding arbitral tribunal. National courts are strict in enforcing arbitration clauses. 5.6 Jurisdiction Over Third Parties Law 131 of 2013 does not contemplate arbitral juris - diction over a third party that is not a signatory to the contract from which the arbitration clause derives. However, through jurisprudence of the Fourth Cham - ber of the Supreme Court, the inclusion of non-signa - tory third parties in the arbitration clause in an arbitra - tion process has been recognised as valid. In such a case, the summoning of a third party or their forced participation in an arbitration without having agreed to the arbitration clause, only occurs when there are reasons, causes or circumstances of such magnitude and relevance between that third party and the parties in conflict that the third party’s involvement is neces - sary for the fair resolution of the dispute.
5. Jurisdiction 5.1 Challenges to Jurisdiction
In Panama, only the arbitral tribunal or arbitration insti - tution can decide on its own competence. That is, the competence-competence principle applies.
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