Countries › Panama › Guide › 14. Disputes › Commercial arbitration seated in Panama under Ley 131 de 2013: the agreement, the tribunal, interim measures, the award and annulment

Commercial arbitration seated in Panama under Ley 131 de 2013: the agreement, the tribunal, interim measures, the award and annulment

Last verified: 2026-10-29 · Status: Stable

Ley 131 de 2013 governs domestic and international arbitration seated in Panama: courts must refer covered claims to arbitration, the tribunal rules on its own jurisdiction, and it may grant interim measures and ex parte preliminary orders. Absent agreement there is one arbitrator, but three when a party is a State entity, and domestic awards are due within two months of closing submissions unless the parties agree otherwise. The only recourse is annulment before the Supreme Court Fourth Chamber within 30 days on closed grounds, with no appeal from its decision.

Panama's currency, the balboa (B/.), is at par with the US dollar, which circulates as legal tender; the Superintendencia de Bancos states that the balboa's value is on a par with the US dollar (checked 29 October 2026). USD figures therefore equal the balboa figures.

Key facts

Arbitration statute	Ley 131 de 2013 textLey 131 de 2013, as of 2026-10-29 · in force
Default number of arbitrators	1 (3 if a party is a State entity) textLey 131 de 2013 art. 19, as of 2026-10-29 · in force
Arbitrators may be of any nationality	Yes, unless agreed otherwise textLey 131 de 2013 art. 20, as of 2026-10-29 · in force
Days to challenge an arbitrator	15 daysLey 131 de 2013 art. 26, as of 2026-10-29 · in force
Tribunal may order interim measures	Yes, including ex parte preliminary orders textLey 131 de 2013 arts. 33 and 36, as of 2026-10-29 · in force
Business days to start arbitration after court interim measures	10 business daysLey 131 de 2013 art. 35, as of 2026-10-29 · in force
Default term for a domestic award	2 months after closing submissions, extendable by 2 textLey 131 de 2013 art. 55, as of 2026-10-29 · in force
Days to request correction or interpretation	30 daysLey 131 de 2013 art. 62, as of 2026-10-29 · in force
Deadline to seek annulment	30 days textLey 131 de 2013 art. 68, as of 2026-10-29 · in force
Annulment court	Supreme Court, Fourth Chamber textLey 131 de 2013 art. 67, as of 2026-10-29 · in force
Appeal against the annulment decision	None textLey 131 de 2013 art. 68 numeral 7, as of 2026-10-29 · in force
Arbitration agreed in State contracts is valid	Yes, including the Panama Canal Authority textLey 131 de 2013 art. 14, as of 2026-10-29 · in force
Exchange rate used for USD conversions	1 PAB per USDBalboa at par with the US dollar (Superintendencia de Bancos), as of 2026-10-29 · in force

The rule

1. The law applies to arbitrations seated in Panama, whether national or international; an arbitration is international when the parties have their establishments in different States, when the seat or the place of performance is abroad, or when the parties agree the matter relates to more than one State. Disputes on matters the parties may freely dispose of are arbitrable.Ley 131 de 31 de diciembre de 2013, arts. 1, 2, 3 and 4, 2013-12-31 official text · verified 2026-10-29

2. The arbitration agreement must be in writing, which includes electronic communications, an exchange of claim and defence where one side alleges the agreement and the other does not deny it, and a reference to a document containing an arbitration clause.Ley 131 de 31 de diciembre de 2013, arts. 15 and 16, 2013-12-31 official text · verified 2026-10-29

3. A court before which a claim covered by an arbitration agreement is filed must reject it outright and refer the parties to arbitration; State regulators that settle disputes between parties must also decline. Asking a court for interim measures is compatible with the agreement.Ley 131 de 31 de diciembre de 2013, arts. 17 and 18, 2013-12-31 official text · verified 2026-10-29

4. Parties choose an odd number of arbitrators; without agreement there is a sole arbitrator, and three when one party is a State or State entity. Arbitrators may be of any nationality; in international arbitration they need not be lawyers, but in domestic arbitration on points of law they must be practising lawyers. Failing appointment within 30 days, an arbitral institution appoints.Ley 131 de 31 de diciembre de 2013, arts. 19, 20 and 22, 2013-12-31 official text · verified 2026-10-29

5. A challenge must be filed within 15 days of learning of the constitution of the tribunal or the grounds; the arbitrator and other parties may respond within 10 days. The decision on the challenge is final and can only be revisited through annulment of the award.Ley 131 de 31 de diciembre de 2013, arts. 25, 26 and 27, 2013-12-31 official text · verified 2026-10-29

6. The tribunal rules on its own jurisdiction and the arbitration clause is separable from the contract. If it upholds jurisdiction as a preliminary question, a party may seek annulment of that ruling before the Fourth Chamber within 30 days, while the arbitration continues.Ley 131 de 31 de diciembre de 2013, arts. 30, 31 and 32, 2013-12-31 official text · verified 2026-10-29

7. The tribunal may order interim measures and ex parte preliminary orders, which expire after 20 days. A party that obtains court measures before the tribunal exists must start the arbitration within 10 business days or the measure lapses; measures ordered by a tribunal seated in Panama are enforced by the competent court, and those of foreign seated tribunals are recognised by the Fourth Chamber.Ley 131 de 31 de diciembre de 2013, arts. 33, 35, 36, 37, 42 and 43, 2013-12-31 official text · verified 2026-10-29

8. In domestic arbitration, unless agreed otherwise, the final award is due within two months of closing submissions, extendable by up to two more months; in international arbitration the parties, the rules or the tribunal set the time limit. In international cases the tribunal also takes into account the UNIDROIT Principles.Ley 131 de 31 de diciembre de 2013, arts. 55 and 56, 2013-12-31 official text · verified 2026-10-29

9. Corrections and interpretation may be requested within 30 days of notice of the award. Annulment is the only recourse, filed with the Fourth Chamber within 30 days of notice or of the decision on correction; the other parties have 30 days to respond, evidence is taken within 20 days, the Chamber decides within 60 days, and no further recourse lies.Ley 131 de 31 de diciembre de 2013, arts. 62, 66, 67 and 68, 2013-12-31 official text · verified 2026-10-29

10. A domestic award is enforced by a civil circuit judge as a final judgment; the debtor has 15 days to oppose only on the ground that annulment is pending or has been granted.Ley 131 de 31 de diciembre de 2013, art. 69, 2013-12-31 official text · verified 2026-10-29

11. Ley 131 applies to arbitration agreements made before it entered into force; arbitrations already under way continue under Decreto Ley 5 de 1999 until the award. It repealed Title I of Decreto Ley 5 de 1999 and Ley 15 de 2006.Ley 131 de 31 de diciembre de 2013, arts. 75, 76 and 77, 2013-12-31 official text · verified 2026-10-29

Step	Time limit	Ley 131 article
Arbitrator accepts appointment	15 days	24
Default appointment if a party or co arbitrators fail	30 days	22
Challenge of an arbitrator	15 days	26
Arbitration after court interim measures	10 business days	35
Preliminary order lapses	20 days	37
Domestic award	2 months after closing submissions, plus up to 2	55
Correction or interpretation	30 days	62
Annulment	30 days; decision within 60 days after the last step	68
Opposition to enforcement of a domestic award	15 days	69

Key time limits in a Panama seated arbitration.

Worked example

Two Panamanian companies arbitrate a B/.2,000,000 (US$2,000,000) construction dispute before a local institution with three arbitrators.
Closing submissions end on 1 March; without other agreement the award is due by 1 May, or by 1 July if extended.
The losing side has 30 days from notice to seek annulment at the Fourth Chamber; meanwhile the winner can ask a circuit judge to enforce, and the only defence is the pending annulment.

Step by step

Draft the clause in writing with seat, institution, number of arbitrators and language.
If urgent, seek court or tribunal interim measures and start the arbitration within 10 business days of any court measure.
Raise jurisdictional objections no later than the statement of defence.
On receipt of the award, diary 30 days for correction requests and 30 days for annulment.
Enforce a domestic award before a civil circuit judge with an authentic copy.

Common traps

In a domestic arbitration on points of law, non lawyers cannot sit as arbitrators.
If a State entity is a party and the number of arbitrators is not agreed, the tribunal has three members, which raises costs.
Contracts with the State that lack an arbitration clause need Cabinet Council approval and a favourable opinion of the Attorney General before arbitrating (art. 14).
Annulment is the only route to raise constitutional complaints about the arbitration; a separate amparo is not the intended path (art. 66).

Sources

← Debt collection in Panama: executive titles, payment orders, attachment, 8 day defences and judicial auction under the Código Procesal CivilEnforcing arbitral awards in Panama: New York and Panama Conventions, the Fourth Chamber, closed refusal grounds and the most favourable treaty rule →

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