The International Journal of Public and Private Arbitration
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The Arbitration Review of The Americas 2008
Section 2: Country Overviews
Commercial Litigation in Panama
The Republic of Panama is a civil law jurisdiction with a welldefined set of legal rules and a specialisation in commercial litigation.
The judicial system is organised into four levels: municipal courts, circuit courts, superior courts (appeals courts) and the Supreme Court. The Supreme Court is divided into chambers, consisting of:
- the First Chamber, which hears extraordinary cassation appeals in civil and commercial cases;
- the Second Chamber, dedicated to criminal appeals;
- the Third Chamber, which hears contentious administrative disputes and labour law appeals; and
- the Fourth Chamber, also known as the General Business Chamber, which hears all matters related to the recognition of foreign judgments, as well as the granting of licences to practise as an attorney and motions for annulment of arbitral decisions.
The Supreme Court of Justice is composed of nine magistrates and in plenary meetings is competent to resolve questions of unconstitutionality, as well as to hear habeas corpus requests and review the constitutionality of the acts and omissions of state officials with jurisdiction in Panama.
The Panamanian court system has specialised jurisdictions for maritime disputes and family law as well as special courts handling copyright, industrial property, unfair competition, antitrust and, in particular, consumer protection. The remainder of conflicts in this area are resolved before the 14 circuit courts of ordinary jurisdiction in Panama City, which are competent to manage civil and commercial litigation for claims above US$5,000.
Although Panamaﾒs legal system is based on civil law, it has successfully adopted some procedural elements of US law. This is the case for the procedure in marine claims, the rules for which, (including the discovery rules) were taken from the US Federal Rules of Civil Procedure. Similarly these rules were adopted in antitrust, unfair competition and consumer protection claims. This tendency to adopt US procedure has reached the stage that as part of legislative reform class actions were introduced for consumer protection, environmental law, and stock market fraud and damages claims.
Ordinary civil and commercial claims have also integrated some US-style procedure such as injunctions and cross-claims but the remaining procedure is in written form and involves staggered phases. Although this does not speed up the process, the judicial system mitigates strong anti-formalist principles with a palpable presence creating a balance between formality and dynamism, with an eye on due process, which is a central principle of the Panamanian judicial system.
All matters regarding banking regulations, state intervention and the liquidation of banks are managed by the Superintendency of Banks, which is responsible for the supervision of the bank system in Panama. Claims arising among individuals about banking issues are heard by the ordinary courts provided the claim is not brought under the rules of consumer protection.
Panama courts, like those in all Latin American nations, suffer from a lack of state funding. Infrastructure can be antiquated and there may be too few staff for the correct and expeditious transaction of trials. Nevertheless, in the past few years, the Presidency of the Supreme Court has provided every court with computers and printers and just recently it has launched a website for public use where its judgments can be consulted.
Panama has a modern and dynamic General Arbitration Law (1999) whose main objective is to lead to the country being recognised as an international arbitration centre. To this end the Conciliation and Arbitration Centre has been set up under the aegis of the Chamber of Commerce, Industries and Agriculture of Panama, a private non-profit organisation. The Centre has reported a steady increase in resolved arbitral claims. The arbitral process itself is very simple and is mandated by law to take no more than six months to reach resolution.
Once an arbitration is finalised, the only way of contesting the award is a motion for annulment before the Fourth Chamber of General Business of the Supreme Court. On average, the Supreme Court takes between two to four months to resolve a motion for annulment. Added to the maximum six months permitted for arbitration, an arbitral cause must be resolved completely and definitively in less than a year.
The General Arbitration Law allows the arbitral process to be transacted in any language. Spanish is not mandatory.
In 2004, the Political Constitution of the Republic of Panama was reformed. In the reforms two important arbitral principles were incorporated: first, the doctrine of Kompetenz-Kompetenz (permission to allow arbiters to decide whether they have jurisdiction); second, the arbitral institution was raised to a level in which justice is administered. As a result arbitral contracts will be subject to due process and judicial guidance.
Icaza Gonzalez-Ruiz & Aleman
Icaza Gonzalez-Ruiz & AlemanAquilino de la Guardia Street No. 8 IGRA Building Main floor PO Box 0823-02435 Panama City, Panama Tel: +507 205 6000 / 205 6094Fax: +507 269 4891 / 263 7127Email igranet@icazalaw.comwww.icazalaw.com |
Icaza Gonzalez-Ruiz & Aleman encompasses a group of qualified lawyers who tend to the individual needs of a distinguished and diverse clientele drawing on excellent academic credentials and considerable experience across the range of legal services. We are well versed in the complexities of international commercial and financial practices and provide tailor-made, sophisticated solutions to key corporate clients, international institutions and public entities, while remaining committed to offering a partner-led, individualised service to our private clients. Our capability stretches across various jurisdictions worldwide and our expertise covers the areas of taxation, banking law, capital markets, maritime law, intellectual property, litigation and ADR, public contracts, privatisations, administrative law, communications and information technology, free-trade zone procedures, immigration and labour law, competition and consumer protection law, insurance and reinsurance, environmental law and energy, among others. Icaza Gonzalez-Ruiz & Aleman is in the list of legal consultants for projects of the World Bank and of the Interamerican Development Bank. In addition, our firm contributes yearly to elaboration and revision and since 1945 has been the official reviser of the Panama Law Digest, published in the prestigious Martindale-Hubbell Law Directory. |