Countries › Panama › Guide › 14. Disputes › Investment treaty arbitration with Panama: ICSID since 1996, the US Trade Promotion Agreement, bilateral treaties and arbitration clauses in State contracts

Investment treaty arbitration with Panama: ICSID since 1996, the US Trade Promotion Agreement, bilateral treaties and arbitration clauses in State contracts

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

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

Panama has been an ICSID Contracting State since 8 May 1996 and its arbitration law tells the State to arbitrate disputes under ratified treaties without Cabinet approval. The Trade Promotion Agreement with the United States lets US investors bring ICSID or UNCITRAL claims after a 90 day notice of intent and within three years of knowledge of the breach. Panama has also approved bilateral investment treaties, including one with Argentina signed in 1996, and arbitration clauses in contracts with the State and the Panama Canal Authority are valid.

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

ICSID Contracting State	Yes textICSID/3, as of 2026-10-29 · in force
ICSID signature	1995-11-22 dateICSID/3, as of 2026-10-29 · in force
ICSID ratification deposited	1996-04-08 dateICSID/3, as of 2026-10-29 · in force
ICSID in force for Panama	1996-05-08 dateICSID/3, as of 2026-10-29 · in force
Notice of intent before a claim under the US agreement	90 days textPanama United States TPA art. 10.16.2, as of 2026-10-29 · in force
Time limit for claims under the US agreement	3 years from knowledge of breach and loss textPanama United States TPA art. 10.18.1, as of 2026-10-29 · in force
State may agree to arbitration in contracts	Yes 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. Panama signed the ICSID Convention on 22 November 1995, deposited its ratification on 8 April 1996 and the Convention entered into force for Panama on 8 May 1996. The Asamblea approved the Convention 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

2. The Panamanian State submits to international arbitration disputes arising from ratified treaties where arbitration is agreed, and that consent is effective by itself without Cabinet Council approval or the Attorney General's opinion. Where a State contract has no arbitration clause, Cabinet approval and a favourable Attorney General opinion are required. Arbitration clauses in contracts with the State and the Panama Canal Authority are valid.Ley 131 de 31 de diciembre de 2013, art. 14, 2013-12-31 official text · verified 2026-10-29

3. In an international arbitration, a State or State controlled party cannot invoke its own law's prerogatives to escape the arbitration agreement; by default, a tribunal with a State party has three arbitrators.Ley 131 de 31 de diciembre de 2013, arts. 4 and 19, 2013-12-31 official text · verified 2026-10-29

4. Under the Panama United States Trade Promotion Agreement, an investor may submit a claim for breach of the investment chapter, an investment authorisation or an investment agreement to arbitration under the ICSID Convention, the ICSID Additional Facility Rules or the UNCITRAL Rules, at least 90 days after delivering a written notice of intent and once six months have passed since the events giving rise to the claim.Ley 53 de 13 de diciembre de 2007 (Panama United States Trade Promotion Agreement), arts. 10.16 and 10.17, 2007-12-13 official text · verified 2026-10-29

5. No claim may be submitted under that agreement if more than three years have passed since the claimant first knew or should have known of the breach and of the loss.Ley 53 de 2007 (Panama United States Trade Promotion Agreement), art. 10.18, 2007-12-13 official text · verified 2026-10-29

6. Panama approved the agreement with Argentina for the promotion and reciprocal protection of investments, signed in Panama on 10 May 1996, by Ley 2 de 1997.Ley 2 de 13 de enero de 1997, Approval law, 1997-01-13 official text · verified 2026-10-29

Instrument	Status or key terms	Source
ICSID Convention	In force for Panama since 8 May 1996	ICSID/3; Ley 13 de 1996
Panama United States TPA	ICSID, Additional Facility or UNCITRAL; 90 day notice; 3 year limit	Ley 53 de 2007 arts. 10.16 to 10.18
Panama Argentina investment agreement	Signed 10 May 1996; approved by Ley 2 de 1997	Ley 2 de 1997
Arbitration clause in a State contract	Valid; three arbitrators by default	Ley 131 de 2013 arts. 14 and 19

Investment arbitration routes involving Panama.

Worked example

A US logistics investor with a B/.50,000,000 (US$50,000,000) concession believes a regulatory measure expropriated its business.
It delivers a notice of intent, waits 90 days and at least six months from the measure, and files at ICSID within three years of learning of the breach and loss.
An ICSID award is binding under the Convention; a non ICSID award would be recognised in Panama under the New York Convention.

Step by step

Map which treaty covers your investment structure and nationality.
Read the treaty's notice, cooling off and time limit clauses; under the US agreement they are 90 days, six months and three years.
Keep records of when you learned of the measure and the loss.
In State contracts, negotiate an express arbitration clause to avoid the need for Cabinet approval later.

Common traps

Without an arbitration clause in a State contract, arbitration needs Cabinet Council approval and the Attorney General's favourable opinion.
Missing the three year window under the US agreement bars the claim.
For Argentine investors, check the current status and terms of the 1996 bilateral agreement before relying on it; the Argentine side is covered in The Argentine Thread guide.

Sources

← Cross border litigation with Panama: serving defendants abroad, letters rogatory, evidence, apostilles and proving foreign lawInsolvency and creditor claims in Panama under Ley 12 de 2016: reorganisation, the financial protection stay, liquidation, clawback and cross border cases →

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