Countries › Panama › Guide › 14. Disputes › Disputes in Panama: courts under the new Código Procesal Civil, arbitration under Ley 131 de 2013, enforcing awards and judgments, and ICSID

Disputes in Panama: courts under the new Código Procesal Civil, arbitration under Ley 131 de 2013, enforcing awards and judgments, and ICSID

Argentina. For full detail on Argentina, go to The Argentine Thread.

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

Civil and commercial suits filed since 11 October 2025 run under the oral Código Procesal Civil of Ley 402 de 2023, which replaced Book Two of the Código Judicial; older cases finish under the old rules before liquidating judges. Arbitration seated in Panama follows Ley 131 de 2013, with a single annulment action before the Fourth Chamber of the Supreme Court within 30 days, and foreign awards and judgments are recognised by that same chamber. Panama is a party to the New York Convention since 1985 and to ICSID since 1996, and claims against the State go to the Third Chamber under short deadlines.

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

Código Procesal Civil (Ley 402 de 2023) in force from	2025-10-11 dateLey 402 de 2023 art. 809; Acuerdo 222 de 2026, as of 2026-10-29 · in force
Arbitration statute	Ley 131 de 2013 textLey 131 de 2013, as of 2026-10-29 · in force
Party to the New York Convention 1958	Yes textLey 5 de 1983; accession 10 October 1984, as of 2026-10-29 · in force
ICSID Contracting State	Yes textICSID/3; Ley 13 de 1996, as of 2026-10-29 · in force
Court that recognises foreign judgments	Supreme Court, Fourth Chamber (Sala Cuarta de Negocios Generales) textCódigo Procesal Civil arts. 48 and 680, as of 2026-10-29 · in force
Claims above this amount go to circuit judges	10000 PABCódigo Procesal Civil arts. 50 and 615, 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 Código Procesal Civil adopted by Ley 402 de 2023 entered into force two years after its promulgation in Gaceta Oficial 29887-A of 11 October 2023, that is on 11 October 2025, and repealed Book Two of the Código Judicial on civil procedure. Cases already pending on that date continue under Book Two of the Código Judicial until they end, including their enforcement stage.Ley 402 de 2023 (Código Procesal Civil), arts. 801, 802, 808 and 809, 2023-10-11 official text · verified 2026-10-29 · changed: New civil procedure code in force since 11 October 2025 for cases filed from that date; the Supreme Court set up liquidating civil courts for older cases (Acuerdos 660 and 734 de 2025, recorded in Acuerdo 222 de 2026).

2. Ordinary claims above B/.1,000 and up to B/.10,000 go to municipal judges and claims above B/.10,000 to circuit judges, who also hear every civil case in which the State, a municipality or a State entity is a party.
Cost to do it: No filing threshold applies above B/.10,000 (US$10,000); counsel fees are agreed privately.
Example: A B/.250,000 supply claim is filed with a circuit judge. / A US$250,000 claim goes to a circuit court.Ley 402 de 2023 (Código Procesal Civil), arts. 50, 52 and 615, 2023-10-11 official text · verified 2026-10-29

3. Arbitration seated in Panama, domestic or international, is governed by Ley 131 de 2013. A court must reject a claim covered by an arbitration agreement and refer the parties to arbitration; the only recourse against an award is annulment before the Fourth Chamber of General Business (Sala Cuarta de Negocios Generales) of the Supreme Court on the closed list of grounds in art. 67.Ley 131 de 31 de diciembre de 2013, arts. 1, 17, 66 and 67, 2013-12-31 official text · verified 2026-10-29

4. International awards are recognised and enforced under the New York Convention of 1958, the Inter American Convention on International Commercial Arbitration of 1975 or any other ratified treaty, whichever is most favourable to the applicant; awards from international arbitrations seated in Panama are enforced directly without recognition.Ley 131 de 31 de diciembre de 2013, art. 70, 2013-12-31 official text · verified 2026-10-29

5. A foreign court judgment is enforced in Panama only after the Fourth Chamber declares that it must be complied with (exequatur). Without a treaty, it is enforceable unless the State of origin does not enforce Panamanian judgments, and it must not have been issued in default, must concern a lawful obligation and must be an authentic copy.Ley 402 de 2023 (Código Procesal Civil), arts. 48, 678, 679 and 680, 2023-10-11 official text · verified 2026-10-29

6. Panama deposited its ratification of the ICSID Convention on 8 April 1996 and the Convention entered into force for Panama on 8 May 1996; the Convention was approved domestically by Ley 13 de 1996.ICSID Convention; Ley 13 de 3 de enero de 1996, ICSID/3 list, 1996-05-08 official text · verified 2026-10-29

7. Claims to annul administrative acts or to restore subjective rights against the State are heard by the Supreme Court in its contentious administrative jurisdiction; a full jurisdiction claim seeking to restore a private right must be filed within two months of publication, notice or execution of the act.Constitución Política art. 206 numeral 2; Ley 135 de 1943 as amended by Ley 33 de 1946, Constitution art. 206; Ley 33 de 1946 art. 27, 1946-09-11 official text · verified 2026-10-29

Dispute	Forum	Key deadline	Source
Commercial claim up to B/.10,000	Municipal judge	10 days to answer (ordinary process)	Código Procesal Civil arts. 52, 615 and 617
Commercial claim above B/.10,000	Circuit judge	10 days to answer (ordinary process)	Código Procesal Civil arts. 50, 615 and 617
Arbitration seated in Panama	Arbitral tribunal; annulment at the Supreme Court Fourth Chamber	30 days to seek annulment	Ley 131 de 2013 arts. 66 to 68
Foreign arbitral award	Supreme Court Fourth Chamber	15 days for the other side to respond, 60 days to decide	Ley 131 de 2013 arts. 70 to 73
Foreign court judgment	Supreme Court Fourth Chamber	5 days notice to the debtor and the Attorney General	Código Procesal Civil art. 680
Insolvency of a merchant or company	Circuit insolvency judges	20 days for creditors to verify claims in reorganisation	Ley 12 de 2016 arts. 23 and 52
Act of a public authority	Supreme Court, contentious administrative jurisdiction	2 months for a full jurisdiction claim	Ley 33 de 1946 art. 27
Treaty claim by a foreign investor	ICSID or other forum in the treaty	Per treaty, e.g. 90 day notice under the US agreement	Ley 53 de 2007 art. 10.16

Where a business dispute goes in Panama.

Worked example

A US supplier holds a B/.400,000 (US$400,000) unpaid invoice against a Panamanian distributor and the contract has an ICC clause seated in Miami.
If the distributor sues in Panama, the court must decline and refer the case to arbitration (Ley 131 art. 17).
The final award is recognised by the Supreme Court Fourth Chamber under the New York Convention and then enforced by a circuit judge against Panamanian assets.

Step by step

Check whether your contract has an arbitration clause or a choice of court clause; Panamanian courts decline jurisdiction when there is a written clause in favour of arbitration or a specific foreign court (Ley 61 de 2015 art. 15).
Confirm whether your case was filed before or after 11 October 2025, because that decides whether the Código Judicial or the Código Procesal Civil applies.
Secure assets early: attachment (secuestro) can be sought before filing, but the claim must then be filed within 10 days.
For a foreign award or judgment, prepare an authenticated or apostilled copy and a Spanish translation before filing at the Fourth Chamber.
Calendar the short deadlines: 30 days for annulment of an award, 5 days to announce an appeal, 2 months for a full jurisdiction claim against the State.

Common traps

Many guides still describe the Código Judicial procedure; for cases filed after 11 October 2025 it no longer applies.
A domestic arbitration seated in Panama on points of law needs lawyers in practice as arbitrators (Ley 131 art. 20).
The State cannot be ordered to pay costs and no attachment can be taken against it in civil cases (Código Procesal Civil art. 795).
Declaratory foreign judgments need only authentication, but judgments with a money award against a Panamanian national or resident still need exequatur (Ley 61 de 2015 art. 143).

Sources

← Customs penalties and audits in Panama: 50 percent surcharge on errors, five year post clearance audits, and contraband as a crime from B/.500,000Commercial litigation in Panama under the Código Procesal Civil: courts by amount, ordinary and summary processes, hearings, appeals, cassation and costs →

Get rule changes weekly

Free. One email a week from The LatAm Thread.

One more step after you press the button: we take you to Substack, where your email is already filled in. Confirm there to start. No spam, unsubscribe anytime, we never share your address. By subscribing you agree to the privacy policy.