The Appeal of Annulment of Arbitration Award

Although our legislation has established that the decisions made in arbitration proceedings are final and cannot be subject to appeal, Law 131 of December 31, 2013, established a single appeal of the purpose of reviewing their validity on the grounds set forth in that regulatory body.

It is important to establish that the only purpose of this Appeal of Annulment is to address the causes related, solely and exclusively, to the formal aspects of the arbitration awards, and that the same cannot be focused on modifying the terms or substantive resolutions adopted by the Arbitration Tribunal, which was duly instituted by the parties with the purpose of providing a solution to the legal conflict.

It is important to emphasize that the Appeal of Annulment of Arbitration Award is the only means of challenge allowed, being the only exceptional procedural initiative of an extraordinary nature, and that it may only be established in special circumstances that are duly established and determined in the Law.

This Appeal of Annulment shall review the grounds for annulment previously established and may not analyze allegations made by the appellants and which are proper to other remedies used in ordinary proceedings (reconsideration and appeal). 

The above is justified, since this would go against the principle of autonomy of the will of the parties, which arises as a result of the agreement and agreed arbitration clause, where it was established that any conflict or difference be resolved by a duly constituted arbitration tribunal,

This appeal may only be filed before the Fourth Chamber of General Business of the Supreme Court of Justice, within a term of thirty (30) days following the notification of all the parties of the arbitration award or the resolution that resolves the request for clarification or interpretation of the arbitration award.

The Appeal of Annulment of the Arbitration Award must be based on a specific cause of action established in the Law, as follows

• That one of the parties to the Arbitration Agreement was affected by some incapacity, or that said agreement is not valid under the law to which the parties have submitted it or, if nothing has been indicated in this regard, by virtue of the Panamanian law; or
• That it has not been duly notified of the appointment of an arbitrator or of the Arbitration proceedings or has not been able, for any other reason, to assert its rights; or
• That the Award refers to a dispute not provided for in the Arbitration Agreement or contains decisions that exceed the terms of the Arbitration Agreement; however, if the provisions of the Award that refer to matters submitted to arbitration can be separated from those that are not, only the latter may be annulled; or
• That the appointment of the Arbitration Tribunal or the Arbitration proceedings have not been in accordance with the agreement of the parties – unless such agreement was in conflict with a provision of this Law from which the parties could not derogate or, in the absence of such agreement, that they have not been in accordance with this Law; or
• That the arbitrators have decided on matters not amenable to arbitration; or
• That the International Award is contrary to international public policy. In the case of a National Award, the public policy to be considered would be the Panamanian public policy.

As from the resolution admitting the appeal of annulment, the other party shall be notified of the appeal of annulment, so that it may present its defense and/or opposition to the appeal of annulment within a period of thirty (30) days.

Once the 30 days have elapsed from the notification of the opposing party, the file will go to a period of evidence if necessary and from there it will go to the resolution phase by the magistrates that make up the Fourth Chamber of the Supreme Court of Justice.

Once this appeal has been resolved, and if the same has not been declared null and void, as from the date on which all parties are notified, then a period of 3 months will run to request the enforcement of the arbitration award.

Otherwise, if the appeal is resolved in our favor, the nullity of all the proceedings will be decreed, and both parties would have to reinstate a new arbitration process, in order to be able to resolve.

Do not hesitate to contact our team of experts to obtain more information on the types of appeals of annulment of arbitration award in Panama in the situation in question.