A. The Contracting State and the New York Convention

1. Name of Contracting State (also specify jurisdiction(s), if relevant)

Republic of Panama.

2. Date of entry into force of the New York Convention

8 Jan. 1985.

The Republic of Panama approved the New York Convention by means of Law No. 5 of 25 Oct. 1983.

3. Has any reservation been made under Art. I(3) of the New York Convention regarding:

(a) reciprocity?

No.

(b) commercial relationships?

No.

4. In addition to arbitral awards made in the territory of another State, the New York Convention (Art. I(1)) also applies to arbitral awards not considered as domestic awards in the State where recognition and enforcement are sought. Are there any awards rendered in your country that are not considered as domestic awards such that the New York Convention and the answers to this Questionnaire are applicable to them?

Arbitration is regulated in Panama by Law No. 131 of 31 Dec. 2013.

This Law distinguishes between domestic commercial arbitration and international commercial arbitration. According to the terms of the Law, a commercial arbitration shall be deemed international when, at the time of making the arbitration agreement, the parties have their respective business establishments in different States, or when any of the following places is located outside of the State where the parties have their establishments:

  1. The seat of the arbitration as determined in or pursuant to the arbitration agreement;
  2. The place of performance of a substantial part of the obligations corresponding to the commercial relationship; or
  3. the place with which the object of the litigation has the closest connection.

The arbitration shall also be deemed to be international when the parties have specifically agreed that the matter which is the object of the arbitration agreement is related with more than one State or when such matter related to the rendering of services or the transfer or disposal of assets or capital causes cross border or extraterritorial effects.

B. National sources of law

5. What specific sources of law are applicable to recognition and enforcement of foreign awards (e.g. statutes, regulations, codes, directives, other legal instruments)?

  1. Inter-American Convention on International Commercial Arbitration, approved by Law 11 of 23 Oct. 1975 (Panama Convention);
  2. Convention on the Recognition and Enforcement of Foreign Arbitral Awards, approved by Law No. 5 of 25 Oct. 1983 (New York Convention);
  3. Convention on the Settlement of Investment Disputes between States and Nationals of Other States, approved by Law No. 13 of 1996 (CIRDI);
  4. Law No. 131 of 31 Dec. 2013, which regulates national and international commercial arbitration;
  5. Bilateral investment treaties.
  6. Art. 100 of the Judicial Code, which grants jurisdiction to the Fourth Chamber of General Affairs of the Supreme Court of the Republic over recognition of foreign arbitral awards.

Unless the parties have specifically agreed otherwise, the treaty that is most favorable to the party requesting the recognition and enforcement will apply.

The Constitution of the Republic of Panama specifically states that arbitral tribunals may administer justice as judicial tribunals do.

(Source: National Constitution, Art. 202.)

C. Limitation periods (time limits)

6.

(a) Is there a limitation period (time limit) applicable to the commencement of legal proceedings for recognition and enforcement of foreign awards?

There is no specific limitation period for the commencement of recognition proceedings under Panamanian law. However, applicants should consider that the general Panamanian limitation period may be invoked against the recognition and enforcement of foreign arbitral awards.

(b) If yes, what is the applicable limitation period (time limit) and when does it start running?

The applicable limitation period would be that set forth in Art. 1701 of the Civil Code, according to which actions in personam not having a specific limitation period will be subject to a limitation period of seven years. Art. 1709 of the same code states that, for obligations recognized by a judgment (by a court or an arbitral tribunal), the limitation period runs from the date on which the judgment became firm as res judicata.

D. National courts and court proceedings

7. What authority or court has jurisdiction over recognition and enforcement of foreign awards?

Jurisdiction over the recognition of international arbitral awards lies with the Fourth Chamber of General Affairs of the Supreme Court of Justice of the Republic of Panama. Once recognition has been granted, the enforcement would be carried out by a Civil Circuit Court.

8. What requirements, if any, must be met for the authority or court to accept jurisdiction over recognition and enforcement of foreign awards (e.g. domicile or assets of respondent in the jurisdiction, etc.)?

Law No. 131 of 2013 does not specifically require any pre-conditions to be met for the Supreme Court of Panama to accept jurisdiction over the recognition and enforcement of a foreign arbitral award. However, it is implicit that an application would be without purpose if the applicant fails to request enforcement of the award through execution against the assets that the respondent party may possess in Panama.

9. Is the first decision granting or denying recognition and enforcement obtained through ex parte or inter partes proceedings?

Panamanian law allows for both possibilities. The party against whom the award is invoked may ask for recognition and enforcement to be refused on grounds corresponding to those listed in Art. V(1) of the New York Convention. However, the court may, of its own motion and without needing to serve the enforcement application on the respondent party, refuse recognition and enforcement if the dispute is not arbitrable pursuant to Law No. 131 of 2013 or recognition and enforcement would be contrary to Panamanian international public policy. It may be inferred that a dual procedure operates, the respondent party being given the opportunity to be heard in the first case, but this not being necessary in the second case.

10.

(a) Is the first decision granting or denying recognition and enforcement subject to any form of appeal or recourse?

The law does not allow any recourse against the first decision granting or denying recognition of an arbitral award. However, the party dissatisfied with the decision may request that such decision be clarified or amended, solely on the grounds that it contains unclear or confusing drafting or arithmetical or writing errors.

(b) How many levels of appeal or recourse are available against this decision?

None.

11. What is the earliest stage in legal proceedings for enforcement of foreign arbitral awards at which a party can obtain execution against assets (i.e. party actually obtains possession of assets as opposed to simply freezing assets)?

A party can obtain actual execution against the assets of the other party only when the process of recognition and enforcement has been completed. This occurs when the decision issued by the Fourth Chamber of the Supreme Court granting recognition of the award has become firm and a circuit court of the civil branch has issued an attachment order against the assets.

E. Evidence required

12.

(a) What evidence must be supplied for recognition and enforcement of foreign awards (e.g. arbitral award, contract containing arbitration clause, affidavits, witness statements, etc.)?

(i) a duly authenticated original or a certified copy of the arbitral award;

(ii) an official translation if the language of the arbitration was not Spanish.

While it is not required to submit a copy of the arbitration clause, it is advisable to provide the original or an authenticated copy of the entire contract containing such arbitration agreement. The party against whom recognition and enforcement of the award is being sought may indeed file objections based on defects related to the arbitration clause, such as:

  1. The arbitration agreement is not valid under the law to which the parties have subjected it or, failing any indication thereon, under the law of the country where the award was made;
  2. The award deals with a difference not contemplated by or not falling within the terms of the submission to arbitration or contains decisions on matters beyond the scope of the submission to arbitration. Provided that the decision on matters submitted to arbitration can be separated from those that were not so submitted, the part of the award which contains decisions on matters submitted to arbitration may be recognized and enforced;
  3. The composition of the arbitral authority, or the arbitral procedure, was not in accordance with the agreement of the parties, or, failing such agreement, was not in accordance with the law of the country where the arbitration took place.

(Source: New York Convention, Article V; Law No. 11 of 2013, Art. 71.)

(b) Is it necessary to provide the entire document or only certain parts (e.g. entire contract or only arbitration clause)?

The applicant must provide a complete original or certified copy of the arbitral award and a duly authenticated original or certified copy of the arbitration agreement. It is also advisable to provide an original or authenticated copy of the entire contract containing the arbitration clause.

(Source: Law No. 131 of 2013, Art. 71.)

(c) Are originals or duly certified copies required?

The applicant must provide an original or a certified copy of the award.

(Source: Law No. 131 of 2013, Art. 71.)

(d) How many originals or duly certified copies are required?

The applicant must provide one original or certified copy of the award and a translation into Spanish.

(e) Does the authority or court keep the originals that are filed?

Yes, unless the party that provided the original requests that it be returned and replaced in the judicial docket with a certified copy.

13.

(a) Is it necessary to provide a translation of the documents supplied?

Yes.

(Source: New York Convention, Art. IV.2; Law No. 131 of 2013, Art. 71.)

(b) If yes, into what language?

Spanish, the official language of the Republic of Panama.

(Source: National Constitution, Art. 7)

(c) Is it necessary for the translations to be certified and, if yes, by whom (official or sworn translator, diplomatic or consular agent (of which country?) or some other person)?

Yes. The applicant must provide translations done by an official or publicly sworn translator in Panama.

(Source: New York Convention, Art. IV.2; Law No. 131 of 2013, Art. 71.)

(d) Is it necessary to provide a full translation of the documents or only a translation of certain parts (e.g. entire award or only part setting forth the decisions; entire contract or only arbitration clause)?

The applicant must provide a full translation of the arbitral award.

(Source: Law No. 131 of 2013, Art. 71.)

F. Stay of enforcement

14.

(a) Can the authority or court stay legal proceedings for recognition and enforcement pending the outcome of an application to set aside or suspend the foreign award before the competent authority referred to in Art. V(1)(e) of the New York Convention?

If a court has been asked to set aside the award pursuant to applicable law, the Panamanian court with which the application for recognition and enforcement has been filed may defer its decision, if it considers it appropriate to do so.

(Source: Law No. 131 of 2013, Art. 72.)

(b) On what other grounds, if any, can the authority or court stay legal proceedings for recognition and enforcement (e.g. forum non conveniens)?

None.

(c) Is the granting of a stay of legal proceedings for recognition and enforcement conditional on the provision of security?

At the request of the party seeking recognition and enforcement, the court may order the other party to provide appropriate guarantees. It is usually required that the guaranty consist of a deposit of money at the order of the Court, a security issued by an insurance company, or a surety company.

(Source: Law No. 131 of 2013, Art. 72.)

G. Confidentiality

15.

(a) Do the documents filed in legal proceedings for recognition and enforcement form part of the public record? If yes, can any steps be taken to preserve the confidentiality of such documents?

Yes, as a general rule. The award and other documents submitted in the course of recognition and enforcement proceedings form part of public records. Art. 496 of the Judicial Code allows judicial dockets to be consulted by law students or any other person at the discretion of the judge. However, the judge may, at the request of the interested party, or of his or her own accord, order that access to the proceedings docket be limited to the parties.

(b) If there are hearings on recognition and enforcement, are such hearings confidential? If not, can steps be taken to maintain the confidentiality of the legal proceedings?

Panamanian law does not provide for a hearing in proceedings for either recognition or enforcement of awards. The proceedings are carried out entirely in writing.

(c) Are judgments on recognition and enforcement published? If yes, can steps be taken to remove the names of the parties or avoid publication of confidential information (such as business or State secrets)?

All judgments issued by the Supreme Court, including those of the Fourth Chamber on recognition and enforcement of foreign arbitral awards are published on a monthly basis in the Judicial Registry and made available on the website of the Judicial Branch.

The party that may be negatively affected by the publication of the award may request that it not be published if it contains confidential information (such as industrial secrets) that, if published, may cause severe damage to that party, the national economy or the State. In that event, the Fourth Chamber of the Supreme Court may excuse the publication.

H. Other issues

16. When, if ever, can a party obtain recognition and enforcement of interim or partial foreign awards?

The award whose recognition is sought must be final and binding, i.e. it must have res judicata effect. For this reason, interim awards cannot be recognized in Panama.

17. When, if ever, can a party obtain recognition and enforcement of non-monetary relief in foreign arbitral awards (e.g. order requiring a party to deliver up share certificates or other property)?

Panamanian law does not distinguish between awards granting monetary relief and other kinds of relief for purposes of recognition.

18. When, if ever, can a party obtain recognition and enforcement of only part of the relief granted in foreign awards?

According to the principle of party autonomy, it is possible for the party in whose favour an award has been issued to apply for recognition of only part of such award.

19. When, if ever, can a party obtain recognition and enforcement of foreign awards which have been set aside by the competent authority referred to in Art. V(1)(e) of the New York Convention?

Art. 72 of Law No. 131 of 2013 states that the Fourth Chamber of the Supreme Court may deny recognition and enforcement to a foreign arbitral award if the award has been set aside by a court in the country where or under whose law it was made but does not require the Supreme Court to do so. The wording of the provision would seem to leave open the possibility of granting recognition and authorizing enforcement of an annulled foreign award. At the time of writing, there is no precedent on this issue.

20. Are there any other procedural or practical requirements relating to recognition and enforcement of foreign awards which are worth mentioning (e.g. unusually high court costs, filing fees, stamp duties, obligation to post security as a condition for seeking recognition and enforcement, obligation to identify the assets that will be the object of enforcement, etc.)?

No, Art. 201 of the Constitution of Panama provides that the administration of justice shall be gratis.

Country Rapporteur: Jorge Federico Lee