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Resolving a commercial dispute in the state of Panama requires knowing the legal system of this country. Let’s have a look at how Panama’s judicial system works and what legal means the parties have at their disposal for settling their differences.


Panama’s court system is multi-layered, which means that there are courts at national, country & local levels. Municipal courts are authorised to hear cases in which damages do not exceed five thousand dollars. Decisions rendered by municipal courts can be appealed with district courts. To appeal a decision rendered by a district court, parties must file an appeal with the Supreme Court or Court of Appeal. Apart from regular courts, Panama also has commercial courts.

Judges & Jurors

Those seeking to file a lawsuit in the state of Panama should keep in mind that the judge’s role in this country lies in verifying & analyzing evidence presented by parties during the trial. They must render decisions based on their experience, knowledge & laws that are applicable to the case. It is worth noting that civil proceedings are not attended by jurors.

Lodging a Civil Claim

A claim for damages can be lodged within a 12-month period. Claims related to real estate can be heard within a period of fifteen years. There’s a 5-year deadline for submitting a claim related to the paying off of lease arrears. A claim connected to payment of public services is to be heard within a 24-month period.

Please note that resolving civil disputes in the state of Panama involves filing claims within a default term of 5 years.

Filing a Lawsuit in the State of Panama

Settling commercial disputes in the state of Panama begins with filing a lawsuit. If a defendant isn’t in the jurisdiction of Panama, letters of notification must be dispatched by diplomatic pouch.

Seeking to resolve commercial disputes in the state of Panama? IQ Decision UK can provide legal help at all stages of settling disputes in the state of Panama.

Public Access

At an oral hearing, either party may request that the proceedings be held in private. Apart from the parties themselves, lawyers, secretaries & experts can have access to the case file.

Lodging an Appeal

Settling a financial dispute in Panama also implies a right to file an appeal. Once a decision is rendered, the parties have 3 days to appeal it. The appeal must be filed within a five-day period, and a counter appeal can be filed within the following 5 days.

Foreign Courts’ Decisions

Typically, decisions rendered by foreign courts will be recognized & enforced by Panamanian courts without re-trial. Foreign courts may ask for legal aid by sending letters to Panamanian authorities or by invoking international agreements/conventions. 


The arbitration agreement must be submitted in written form. The parties have a right to select the number of arbitrators, provided that the tribunal includes an odd number of judges. If the parties fail to reach a deal on the number of arbitrators, the dispute is decided by a single arbitrator. 

Those seeking to resolve a dispute through arbitration in Panama should keep in mind that a verdict can be challenged by filing a statement of annulment. Reasons for submitting the statement can be as follows:

  • either of the parties is incompetent; the the agreement is found invalid
  • a party wasn’t informed of an arbitrator being appointed/proceedings commencing, or wasn’t able to present its defense
  • the verdict concerns a dispute which the arbitration agreement doesn’t provide for
  • the arbitration failed to abide by the agreement
  • the award violates international public policy

ADR in Panama

Resolving commercial disputes through ADR in Panama excludes the necessity to resort to court. Settling business disputes through mediation in the state of Panama is the most popular alternative nowadays. In some cases, parties may agree on mandatory ADR before the arbitration begins.  

Legal Advice

Need help with resolving a financial dispute in Panama? IQ Decision UK is the answer. Sign up for an individual consultation on dispute resolution and get a full spectrum of legal services for your business.