Enforcement of foreign judgments and arbitral awards

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How are judgments of foreign courts enforced in Panama?

A final conclusive judgment of a foreign court of competent jurisdiction would be recognised and enforced in the courts of Panama without retrial of the originating action by instituting exequatur proceedings in the courts of Panama and upon determination by such tribunal that:

• the courts of the judgment country would in similar circumstances recognise a final and conclusive judgment of the courts of Panama;

• the judgment has been issued as a consequence of an action in personam;

• the judgment was rendered after personal service on the defendant (including service on a process agent of the defendant);

• the cause of action upon which the judgment was based does not contravene the public policy of Panama;

• the documents evidencing the judgment are in authentic form according to the law of the relevant foreign court and have been duly legalised by a Consul of Panama or pursuant to the 1961 Hague Convention on the legalisation of documents; and

• a copy of the final judgment has been translated into Spanish by a licensed translator in Panama.

Panama is a signatory of the 1958 New York Convention.

A final conclusive judgment of a foreign arbitration award issued by a foreign arbitration tribunal would be recognised and enforced in the courts of Panama and may only be refused if one of the following circumstances occurs:

• at the request of the party against whom it is invoked, if the said party proves before the General Business Court of the Supreme Court of Justice that:

• one of the parties to the arbitration agreement was under some incapacity under the law applicable to it, or the said agreement is not valid pursuant to the law to which the parties subjected it or, if no provision was made in this regard, pursuant to the

• law of the country in which the award was rendered;

• the party against whom the award is invoked was not given proper notice of the appointment of an arbitrator or of the arbitral proceedings or was unable, for whatever reason, to present its defence;

• the award refers to a dispute that was not contemplated by the arbitration agreement or that did not fall within the terms of the submission to arbitration or contains decisions that go beyond the scope of the arbitration clause or the submission to arbitration. However, if the provisions of the award that refer to the matters submitted to arbitration can be separated from those that have not been submitted to arbitration, the former may be recognised and enforced;

• the constitution of the arbitral tribunal or the arbitral proceedings did not conform to the agreement entered into between the parties or, if there is none, it did not conform to the law of the country in which the arbitration was held; or

• the award has not yet become binding on the parties or has been set aside or stayed by a court of the country in which it was made or pursuant to whose law it was made. If a court

• has been asked to set aside the award pursuant to the applicable law, the competent court to whom the application for recognition and enforcement is addressed may, if it considers

• it appropriate to do so, defer its decision and at the request of the party seeking recognition and enforcement it may also order the other party to provide appropriate and adequate guarantees;

• if the court finds:

• that pursuant to the Arbitration Law the subject matter of the dispute may not be resolved through arbitration; and

• that the recognition or enforcement of the award would be contrary to Panamanian international public policy; and

• if the following documents are not provided with the enforcement petition:

• duly authenticated original or certified copy of the arbitration award;

• duly authenticated original or certified copy of the arbitration agreement; and

• official translation to Spanish if the language of the arbitration proceedings is other than Spanish.

More info on Aviation Finance & Leasing in Panama – Contact:

María de Lourdes Marengo (mmarengo@pmalawyers.com)

PATTON MORENO & ASVAT, the experienced legal guidance you can trust.

- An extract of the Aviation Finance & Leasing Guide 2021, originally published by Getting the Deal Through / Lexology