PANAMA Law and Practice Contributed by: Jorge Molina Mendoza and Alberto de Urriola Rubio, FABREGA MOLINO
in Panama are mediation, conciliation and arbitration, all of them being regulated. Without a doubt, arbi- tration stands out, supported by a user-friendly law based on the UNCITRAL Model Law and a distin- guished community of arbitration practitioners. 12.2 ADR Within the Legal System ADR is not compulsory and does not form part of court procedures. However, civil judges, when accepting that the initial complaint fulfils the formal requirements set by the law, must inform the parties that mediation carried out by the Judicial Branch is available. 12.3 ADR Institutions Institutions offering and promoting ADR are well- organised and consistently regulated by law. They are monitored by the Ministry of Government. Law 131 of 2013 regulates national and international commercial arbitration in Panama. It is based on the UNCITRAL Model Law and was created with the spe- cific purpose of promoting Panama as an international arbitration centre. The recognition and enforcement of arbitral awards depends on whether they were issued as a result of national or international arbitration. If the arbitration was national, enforcement is requested at a civil court and no challenges may be filed by the losing party. If the arbitration was international, Panama is a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the “New York Convention”), and recognition and enforcement is decided by the Supreme Court based on the New York Convention and local law, which is directly based on the Convention. 13.2 Subject Matters Not Referred to Arbitration Subject matters that may not be freely decided by the parties cannot be referred to arbitration in Panama. For example, family law matters may not be referred 13. Arbitration 13.1 Laws Regarding the Conduct of Arbitration
to arbitration. In addition, those matters that violate public order cannot be referred to arbitration. 13.3 Circumstances to Challenge an Arbitral Award Parties can challenge an arbitral award before the Supreme Court by means of an annulment proceed- ing. An arbitral award may only be annulled in the fol- lowing circumstances: • if one of the parties to the arbitration agreement lacked capacity, or if the agreement is not valid under the law; • if the defendant was not notified of the constitution of the arbitral tribunal; • the award decided on a matter not covered by the arbitration agreement; • the designation of the arbitral tribunal did not respect the arbitration agreement; • the arbitrators decided on matters that cannot be referred to arbitration; and • the award is contrary to public order. 13.4 Procedure for Enforcing Domestic and Foreign Arbitration For the enforcement of domestic arbitration awards, a simple request to a civil judge is sufficient, and no challenges may be filed by the losing party, with the exception of annulment. Foreign arbitration awards are enforced pursuant to the New York Convention by the Supreme Court. According to the law, a request must be filed by the party requesting the execution, and the other par- ties are notified and given a 15-day term to respond. The Court must decide in the 60 days following the response. However, in practice, the process can take much longer. 14. Outlook 14.1 Proposals for Dispute Resolution Reform For several years, the Judiciary has been working on a reform of civil procedure that promotes oral pro- ceedings, the concentration of acts, and immediacy as elements to improve the State’s response times in
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