Litigation

Last verified on Wednesday 27th September 2017

Panama

Daniel Infante
Infante & Perez Almillano
  1. 1.

    Outline the court system in your jurisdiction.

  2. The Panamanian court system is arranged under the Supreme Court and its four Judicial Chambers. The First Chamber oversees civil and maritime law litigation procedures; the Second Chamber governs criminal law litigation; the Third Chamber has competence over matters pertaining to administrative and labour law. The Fourth Chamber “of general matters” attends to several special procedures, those of most importance being related to arbitration award annulments and the validation of the effects of foreign rulings in Panama.

    Each of the first Three Chambers is composed of three Supreme Magistrates, nine magistrates in total; while the Fourth Chamber is assembled by the three magistrate-presidents of the prior three Judicial Chambers. Owing to the lack of a Constitutional Jurisdiction under the Panamanian system, constitutional matters are decided by the nine Supreme Court magistrates in plenum.

    On its hierarchical outline, the Panamanian system consists of municipal courts and circuit courts that handle competency of civil and criminal law litigation. Circuit courts are destined to decide more complex matters either by the type of process or value at stake. Labour Law on the other hand, has two main decision-making bodies, the Labour Circuit Courts and the Conciliation and Decision Boards (the latter governed under the Executive Branch through its Work and Labour Ministry).

    Appeals against each of the rulings of the circuit courts and special administrative instances with judiciary powers are decided by Supreme Tribunals, which divide their competence in the following manner:

    •          First Supreme Tribunal - Civil Litigation;
    •          Second Supreme Tribunal - Criminal Law;
    •          Third Supreme Tribunal - Commercial Law;
    •          Family Law Supreme Tribunal;
    •          Labor Law Supreme Tribunal;
    •          Tributary Law Supreme Tribunal;
    •          Public Contract Law Supreme Tribunal; and
    •          Maritime Law Supreme Tribunal.
  3. 2.

    What remedies are available to a local entity or resident that is in a dispute with a foreign entity? Do the laws provide foreign entities the same rights afforded to local entities? Are there laws requiring foreign entities to post a bond or other security before they can defend a suit?

  4. Under Panamanian law, foreign entities are subject to disputes against local entities. Foreign entities will be served and reached through the mechanisms devised in each of the various legal mutual assistance treaties panama has signed. In the absence of such, the Panamanian Foreign Affairs Ministry will need to issue a letter of request and depend on the goodwill of the recipient nation.  

    The Panamanian Constitution clearly states that Panamanian nationals shall be equally treated by law; this constitutional definition includes foreign national and entities who are subject to Panamanian jurisdiction, meaning that there are no statutory provisions that require foreign plaintiffs or defendants to post any bonds or securities to defend their legal rights.

    It must be noted that any request of provisional dispository measures in general requires the posting of a damages bond or security, but again, there is no distinction between Panamanian or foreign entities in this respect either. 

  5. 3.

    What is the process by which a foreign entity may challenge the jurisdiction or venue of the; court where litigation is filed? What factors are considered when a court evaluates whether; to exercise jurisdiction over a foreign entity?

  6. Foreign entities may challenge the jurisdiction or venue of the Panamanian court on the grounds of lack of jurisdiction or lis pendens at any stage of the process regulated under article 697 of the Judicial Code and subsequent dispositions. Whenever a jurisdiction challenge is filed, it will technically freeze proceedings until the judge decides on its viability.

    The factors evaluated by Panamanian courts to exercise jurisdiction over a foreign entity are regulated by article 259 of the Judicial Code. A defendant is reputed to be “present” in Panama as long as its business is mainly held in this jurisdiction. Among the main criteria we should highlight the following:

    Breach of contract

    Whether Panama was the place where the obligations were to be executed. In case of transport of goods, the judge will assert jurisdiction if the cargo is on Panamanian territory.

    Damages

    The main criteria for the determination of jurisdiction will rest on the place where the damage was caused.

    Maritime claims

    By exceptional procedures and regulations conceived solely because of the particularities of the Panama Canal transit operations, maritime courts will exercise jurisdiction over a foreign entity if any vessel or property belonging to the defendant is arrested in Panamanian waters.

  7. 4.

    What is the most common type of litigation encountered in your jurisdiction by foreign entities?

  8. Owing to the lack of official statistics measuring this aspect of Panamanian litigation; in our experience we should assume that foreign entities litigate mostly on commercial disputes arising from breach of private and public contracts, banking, trade disputes, construction, maritime claims and corporate litigation.

  9. 5.

    How frequently do parties pursue criminal actions in the context of commercial disputes? May criminal trial evidence be adduced in follow-on civil litigation? May civil cases be brought concurrently or after criminal litigation?

  10. Our litigation practice suggests that criminal actions are often pursued simultaneously along civil complaints, there is even a special section of the Judiciary Investigation Office (DIJ) destined to investigate and prosecute criminal cases related to commercial activities.

    Pursuant to article 795 of the Judicial Code, criminal trial evidence may be adduced in follow-on civil litigation as long as it gets incorporated during the evidence stage of the process or with the answer of complaint. It is not advisable to adduce criminal evidence into a civil process since it is at the judge’s sole discretion to order the incorporation of the said evidence, as it must be directly related to the object of the procedural debate.

    Criminal law procedure contemplates a specific proceeding where the plaintiff is immediately allowed to pursue damages that derivate the crime once the defendant is indicted (articles 1969 and 1974 of the Judicial Code); nonetheless, the victim can also pursue damages later on through the civil courts.

  11. 6.

    Is there a right to a trial by jury in a commercial dispute?

  12. In Panamanian courts, trial by jury is not available to settle commercial disputes.

  13. 7.

    Do courts require or strongly encourage mediation or other alternative dispute resolution methods before or during a litigation proceeding?

  14. Courts do not require mediation nor alternative dispute resolution methods prior or during litigation proceedings. Nonetheless, it is a general practice to encourage the parties to compromise before trial, we regard this mainly as a formality rather than as a strong encouragement to avoid litigation.

    On arbitration clauses, it is not unusual to find provisions requiring a formal mediation attempt before initiating the arbitration proceedings and Panamanian courts and arbitration boards actively respect this type of clause.  

  15. 8.

    Will choice of law and choice of forum provisions in a contract be recognised?

  16. On civil litigation contractual forum provisions can be recognised by Panamanian courts, although itis unlikely that judges will waive jurisdiction if the case matches any of the criteria regulated under article 259 of the Judicial Code. On the other hand, choice of law is not allowed in civil courts.

    As a notable exception, choice of law and choice of forum contractual provisions are permitted and recognised in maritime litigation owing to the international orientation of the country’s statutory law.  

  17. 9.

    Does your jurisdiction have a specific arbitration law? Are arbitration awards enforced by the courts? May courts enjoin/prohibit arbitration proceedings in matters that are also pending in a court proceeding?

  18. Arbitration procedures are regulated on the Panamanian jurisdiction by Law 131 of 31 December 2013, which is in turn based on the UNCITRAL Model Law on International Commercial Arbitration. Arbitration awards issued in Panama will be enforced by Panamanian courts because they have the condition of executive titles under article 1613 of the Judicial Code. This title entitles the plaintiff to start an expedite proceeding to execute the arbitration award.

    Courts cannot prohibit arbitration proceedings. Whenever a lawsuit is filed and the court determines that there is a valid arbitration clause or an ongoing arbitration proceeding regarding the same matter, it will inhibit its jurisdiction over the case. 

  19. 10.

    Do the courts recognise attorney-client privilege? If so, is the privilege applicable to in-house lawyers?

  20. Article 912 of the Judicial Code, as well as article 228 of the Commercial Code and article 14 of Law No. 2 of 2011, recognise the attorney-client privilege; in addition, article 13 of the Panamanian Attorney’s Code of Ethics and Professional Responsibility states that attorneys are ethically bound to hold their clients’ secrets and disclosures. This duty is extensive to any employee of the attorney and it persists even after the legal services have been delivered.

    Regarding in-house counsel, although there is no direct statutory provision that regulates in-house attorneys, we consider that this privilege is extensive to the latter, and attorneys should not be compelled to testify with respect to disclosures made to them by their employers (clients) on this case because any testimony could trigger confidentiality breach, ethical prosecution and possible disbarment.

  21. 11.

    Are legal proceedings public? In other words, can the general public observe hearings and review the filings of the parties?

  22. While criminal hearings should be held publicly as required by article 2228 of the Judicial Code, the judge is entitled to make it private on the grounds of ambiguous criteria such as “public order“ and “morality”.  This decision can be adopted moments before the hearing and it’s not subject of appeal.

    Exceptions to be noted: criminal trials by jury and maritime hearings at the Superior Maritime Tribunal are generally held in a public manner. It is important to clarify that Panamanian courts have limited infrastructure (hearing rooms with seating space), consequently in general practice we find that civil and criminal proceedings alike are most likely to be held privately.  

    Even though general practice is that most hearings are private, this does not necessarily means that the Judge won’t allow attendance of audience, if requested so. Observation of the proceedings is accepted regularly for attorneys, their credited assistants, public servants, law students and judicial clerks.

  23. 12.

    May a defendant join other potentially liable parties to the existing lawsuit?

  24. Defendants may request the judge to join other potentially liable (third) parties to ongoing proceedings, as stated in articles 608, 609 and 610 of the Judicial Code. If the potentially liable party was contractually involved in the obligation, the defendant may invoke article 678 of the Judicial Code and the judge is bound to order the plaintiff to submit an amended complaint including the said party among its defendants. 

  25. 13.

    How may a party enforce a foreign judgment?

  26. Parties may request the Fourth Chamber of Supreme Court to recognise a foreign judgment or arbitration award through formalities stated by article 877 and the proceedings devised on article 1419 of the Judicial Code. In this respect, a foreign judgment is subject to recognition, prior hearing of the Attorney General, as long as it complies with the following criteria:

    • it must have originated from a country that has a judicial assistance treaty with Panama. Rulings from non-signatory nations are subject to formal review on the grounds of reciprocity. If it is found that the country has refused to enforce Panamanian rulings in the past, the foreign judgment shall not be recognised;
    • it must have been held in regard of a personal claim (there must be a plaintiff that has credited a legitimate interest);
    • the obligation that originated the ruling cannot be contrary (illicit) according to Panamanian laws; and
    • it needs to have been served personally to the defendant. Default judgments are not subject to recognition.

    Once the Fourth Chamber of the Supreme Court has recognised the foreign judgment, it will have full legal enforceability at Panamanian courts through expedite proceedings regulated under Title XIV, Second Book of the Judicial Code. 

  27. 14.

    How is service of process effected?

  28. Service of process is effected through judicial means, pursuant to article 1001 and subsequent provisions of the Judicial Code. Private serving duties are not allowed under Panamanian law. By general rule, servings must be performed personally if the document to be served involves the initiation of a proceeding, first-instance rulings or any dispository measures.

  29. 15.

    How much time does a party have to answer a complaint? Can a party extend this time?

  30. Depending on the type of proceeding defendants may answer complaints within the following deadlines:

    • summary proceedings: five business days; and
    • ordinary proceedings: 10 business days.

    Owing to the geographical location of the defendant, deadlines are extended up to 20 business days if the defendant is outside the jurisdiction of the court but within Panamanian territory, and 40 business days if the defendant is located abroad.

    Deadlines are not individually subject to extension by party arrangements; nonetheless, parties can mutually request the judge to suspend proceedings for up to three months, according to article 491 of the Judicial Code.  

  31. 16.

    What types of pretrial proceedings are available in court? What kinds of dispositive motions can be filed before trial? Under what circumstances may a lawsuit be dismissed prior to trial?

  32. The concept of pretrial proceedings is not contemplated under Panamanian law.

    Dispositive motions can be filed before trial, requesting preventive seizure of property, administration rights or even the exhibition of evidence. This motion could be ordered by the judge without the participation of the defendant. Plaintiffs need to post a liability bond in this respect.

    Dismissal of lawsuits before trial is rare. The defendant must enter trial and answer the complaint to request its dismissal. Complaints may be unadmitted before trial owing to lack of jurisdiction on grounds of lis pendens, declination of competence proven the existence of an arbitration clause and if the basic formalities of the complaints have not been met. (Example: the non-submission of an executive title to access expedite proceedings regulated under Title XIV, Second Book of the Judicial Code.)

  33. 17.

    How long does it take to obtain a first-instance judgment in a typical commercial litigation case?

  34. Articles 518 and 520 of the Judicial Code establish prompt ruling deadlines, unfortunately this expectation is rarely met by Panamanian judges. Owing to the lack of official statistics in this respect, in our personal practice of civil litigation we generally obtain first-instance judgments in a period of eight to 12 months after evidence has been evacuated. Regarding commercial litigation, proceedings have been modernised and digitalised (paperless), which makes first-instance rulings available within four to six months after the main hearing has been held. In the case of expedite proceedings to allow the recovery of property, first-instance rulings should be available within six to eight months.

  35. 18.

    Is a party required to submit all facts, arguments and supporting evidence with its initial pleading?

  36. Ordinary proceedings do not require either plaintiffs or defendants to submit all supporting evidence, nonetheless, it is generally expected that all facts and arguments should be presented with the initial pleading.

    Special proceedings that are conceived to have a faster nature, do require all of the supporting evidence to be submitted with the initial pleading, this is the case of summary trial (article 1345 of the Judicial Code) or property recovery expedite proceedings (article 1612 of the Judicial Code).   

  37. 19.

    Does litigation provide a process for investigating claims or right to discovery of evidence prior to trial?

  38. Evidence discovery is not available under Panamanian law. A notable exception to this practice is litigation on the maritime jurisdiction where right to discovery of evidence is recognised.

    A somewhat similar practice available in civil and commercial litigation is the filing of exhibitory motions before trial (article 815 of the Judicial Code), requesting a judicial inspection at the respondents domicile in order to secure evidence that is under risk of being lost. This motion can be ordered by the judge without the participation of the defendant, but it is not accepted by Panamanian courts on a regular basis.

  39. 20.

    Does litigation provide a process to subpoena or obtain documents or testimony from third parties?

  40. In accordance to article 870 of the Judicial Code, documents from third parties can be required by the judge. Third parties can also be required by the judge to depose their testimony under penalty, pursuant to article 932 of the Judicial Code. 

  41. 21.

    Does the judge or opposing counsel examine witnesses?

  42. As a matter of fact, both are entitled to do so. The opposing counsel may examine the witnesses after the witness has deposed its testimony. Afterwards, the judge may examine the witness for further clarification of its testimony.

  43. 22.

    How may evidence be challenged? Are there specific rules of evidence?

  44. Specific rules of evidence are organised under Title VII of the Second Book of the Judicial Code. Documentary evidence has a concrete set of formalities that need to be observed in order to be incorporated as evidence. Documental evidence may only be challenged on the ground of forging, false content or signature. In this case, the signee of the document will be summoned to court to perform handwriting tests.

    Testimonial evidence may be challenged on the grounds of reference witnesses (unreliable testimony based on assumptions), suspicious witnesses (when the witness has a direct interest or has submission to the parties, pursuant article 909 of the Judicial Code). Questions formulated by attorneys can be also challenged on the grounds of suggestive, unclear or unrelated to the process interrogation. Witnesses with contradictory testimonies may be challenged to be cross-examined simultaneously.

    Expert witnesses may be challenged on the grounds of lack of preparation regarding field of expertise, and their appointment can also be challenged if proven that the expert witness has one of the same causes of impediment applicable to challenges against judges (article 760 of the Judicial Code).

  45. 23.

    Do courts typically allow hearings at or before a trial? At what stage may parties present expert witness testimony?

  46. Courts do not allow hearings before trial on a regular basis, although parties may request witness statements (article 831 of the Judicial Code) before trial as stated in question 20.

    Expert witness testimony is solely allowed within trial because the expert witness needs to be under oath before the object and conditions of the expert report are formally delivered by the judge.

  47. 24.

    What must be demonstrated to collect a debt based on a written instrument?

  48. Written instrument debt collection is regulated under the expedite proceedings regarding article 1612 of the Judicial Code. According to legal requirements, the plaintiff must demonstrate that the defendant’s debt is due and payable. This condition needs to be evidenced either by the terms and conditions of the written instrument or by means of testimony.

    If the conditions of debt are not clear enough the written instrument will not be recognised as an executive title and the creditor will have to file an ordinary complaint to prove the obligation that generated the debt. Written instruments that can be considered executive titles are listed under article 1613 of the Judicial Code.

  49. 25.

    What remedies are available in your jurisdiction to a minority shareholder of a corporation in a dispute with the corporation or the majority shareholders?

  50. Panamanian legislation contemplates protection for minority shareholders in Cabinet Decree No. 247 of 1970. According to this provision, minority shareholders can prevent wrongful disposition of the corporation’s assets claiming the annulment of any board of directors’ resolution that is made in open contradiction to the statutes or corporate law.

    A minority shareholder can challenge any board resolution within 30 days of the resolution being adopted. The importance of this deadline is that if a complaint is filed, the plaintiff can access a summary trial and could even request an injunction preventing the effects of the resolution to have full effect. If the minority shareholder fails to meet the said deadline, the complaint will be litigated through ordinary proceedings, although the effects of the board resolutions will have full legal validity.

    According to article 420 of the Code of Commerce, minority shareholders can legally force the board of directors to call for a shareholder meeting as long as they represent at least 1/20th of the corporation’s shares. In terms of corporate mergers, dissolutions or statutory reform, minority shareholders will not be able to challenge the other shareholders’ majority decision if the legal formalities have been properly regarded during calling and adoption of the vote. 

  51. 26.

    What rights are available in the courts for someone holding a maritime lien interest in a vessel?

  52. The amended Maritime Law of 2009 grants any privileged claim upon sea connected property the possibility to arrest any vessel belonging to the debtor-defendant, even in cases of associated ownership. Maritime courts will enforce in rem jurisdiction over port-based and transit vessels regardless of their flag of preference.

  53. 27.

    What rights are available for a party holding a security interest in real property and personal property? Are there expedited proceedings to allow the recovery of property serving as security for debt obligations?

  54. Written instrument debt collection is regulated under the expedite proceedings regarding article 1612 of the Judicial Code. Once the debt is evidenced through the presentation of an executive title, the judge will order the debtor immediate payment. If this judicial order is not met, creditor will have the right to request the court to execute the judicial sale of the property serving as security and collect the debt from the sale. The debtor will receive the remains of the debt, if any. 

  55. 28.

    Describe the types of employment disputes that frequently result in litigation.

  56. The most frequent type of employment disputes are those related to the recognition of a subordinated service relationship, once this aspect is proven, the declaration of an unlawful termination of contract will be pursued. Worker compensation claims requiring judges to grant an indemnisation owing to unlawful termination frequently result in litigation.

  57. 29.

    Does your jurisdiction allow class actions or some form of collective litigation proceeding?

  58. The Panamanian jurisdiction allows class actions only in claims related to consumer rights, this type of collective litigation is regulated by Law 45 of 2007.

  59. 30.

    Do government-owned or controlled entities enjoy any privilege when they are engaged in commercial activity and involved in a commercial or administrative litigation?

  60. Public and state-owned entities enjoy certain privileges when they are engaged in civil and commercial litigation, in this respect article 1939 of the Judicial Code states among the main prerogatives that that any ruling adopted against them is subject to consultation before the hierarchical superiority, even if an appeal is not filed. State entities are not subject court fees and any service of process type must be held personally at all stages of the proceeding. Accordingly, state-owned entities are not subject to preventive property seizures.

  61. 31.

    Do foreign states or entities controlled or owned by foreign states enjoy any privilege when they are engaged in commercial activity and involved in a commercial or administrative litigation in your jurisdiction (state immunity)?

  62. Panamanian law does not grant foreign states or entries owned by foreign states similar prerogatives such as the ones mentioned above. 

  63. 32.

    Is injunctive or other relief available on an emergency basis?

  64. Injunctive relief is available on emergency basis as a temporary solution that suspends the effects of a determined legal act. In order to request thus type of relief on civil litigation, the interested party is requested to post a liability bond along with the request in full compliance with legal formalities.

    On the other hand, liability bonds are not requested in administrative litigation whereas the Third Chamber of the Supreme Court is entitled to grant a full-scale suspension of the effects of the challenged administrative decision. A similar relief may be granted in constitutional matters whenever the Supreme Court estimates the accused ruling has the appearance of being unconstitutional.

  65. 33.

    Is injunctive relief available as part of a final award? If so, in what types of cases do courts usually provide injunctive relief?

  66. It is available in most cases as a part of the final ruling. As previously stated, injunctive reliefs are common in administrative and constitutional law instances.

  67. 34.

    What are the typical court fees and costs required to file a civil lawsuit?

  68. The Panamanian constitution commands that justice should be administered gratuitously. Accordingly, the Judicial Code contemplates no costs or fees required to file a civil lawsuit.

  69. 35.

    Is a bond required for a non-resident? What is the amount of the bond?

  70. There are no statutory provisions that require non-resident plaintiffs or defendants the need to post any type of bonds or securities to pursue of defend their legal rights before Panamanian courts.

  71. 36.

    What types of damages are available? How are damages quantified? Are punitive damages available?

  72. In Panamanian law, the punitive damages doctrine is not in effect. The regular damages available for recognition are the following:

    • material damages: actual losses;
    • emerging damages: incidental losses, sums spent on relief;
    • lost profit: regarding consequential losses; and
    • moral damages: non-material damages related to the human condition of the aggravated party.

    The first three types of material damages will be quantified and awarded on direct regard of the admitted evidence, meanwhile the amount of moral damages are to be granted on a subjective basis according to the judge’s consideration. 

  73. 37.

    Is the losing party liable for the prevailing party?

  74. Attorneys’ minimal fees and costs are determined by Accord No. 49 of 2001 (currently under revision). The losing party is liable for the prevailing attorney’s fees to the extent of the minimum fees regulated by the said legislation, calculation of fees will be made by the court’s secretary after ruling has been issued. Any exceeding prevailing attorney fees are the responsibility of the winning party.  

  75. 38.

    Will courts enforce a liquidated damages provision in a contract?

  76. A Panamanian court will recognise and enforce liquidated damages provisions, even though it could concede additional damages if the contract provisions are found insufficient with respect to the evidenced damages. 

  77. 39.

    What is the appeal process against trial court decisions?

  78. The process of appeal against any trial court decisions on civil and commercial matters is regulated under the Third Chapter of Title XI, Second Book of the Judicial Code.

    The process of appeal against any trial court decisions on criminal matters is regulated under the Second Chapter of Title VII, Third Book of the Judicial Code.

    Appeal deadlines and process against trial court decisions may vary depending on the type of proceeding on which the decision originates. As a general rule the appealing party must announce its challenging intention within three business days after the ruling is served. In cases of court provisions not considered rulings, this deadline consists of two business days.

    After the announcement date and without the necessity of a court provision, the appealing party has a deadline of five business days to file the arguments that sustain its challenge. The opposing party will have an additional deadline of five business days to file a counter argument. Afterwards, the issue will be directed to a superior court for decision.

  79. 40.

    How frequently do appellate courts reverse trial court decisions?

  80. Owing to the lack of official statistics measuring this aspect of Panamanian litigation; in our experience we find that it is more likely that an appellate court will confirm a trial court decision.

  81. 41.

    May the courts entertain challenges to administrative decisions made by federal or local governments? If so, how frequently do courts reverse administrative decisions in favour of a private party?

  82. Challenges to administrative decisions made by federal or local governments are decided by the Supreme Court’s Third Chamber. Owing to the lack of official statistics measuring this aspect of Panamanian litigation, it is difficult to state how frequently these decisions are reversed.

  83. 42.

    How are trade secrets protected in judicial proceedings?

  84. Title IV of Law No. 35/1996 offers an extensive protection of trade secrets. Accordingly, article 83 of the said Law defines the extension of this protection. Under Panamanian law it is essential to establish contractual provisions that cover any trade secret intended for protection in order to successfuly pursue a civil damages claim or criminal prosecution (articles 272 and 273 of the Criminal Code) regarding unlawful leaks.

  85. 43.

    Are settlement agreements confidential? Must the parties’ settlement agreement be certified by the court?

  86. Settlement agreements are regulated under article 1082 and subsequent provisions of the Judicial Code. A settlement may be submitted by the parties at any stage of the process. The content of this settlement agreement presented before the judge will lose its confidentiality veil because once it is accepted; it will have the same compelling power of a court ruling in case one of the parties fails to fulfil its obligations.

    If the parties wish to keep their settlement agreement confidential, they should not disclose the agreement and have the plaintiff file a motion of withdrawal of the claim instead.

  87. 44.

    Who has the burden of proof at trial? What is the burden?

  88. Burden of proof is generally on the plaintiff party as stated on article 784 of the Judicial Code. If the defendant alleges with its answer of complaint any exception or argument of dismissal the burden will be reversed. The burden consists of providing the court with all means of legitimate evidence that may prove the fact in favour of its case. 

    Among the notable exceptions of this rule is the burden of proof in labour litigation, whereas the worker or plaintiff has important procedural presumptions, even though no evidence is filed with the complaint. The defendant or employer must return with counter evidence during the proceeding.

    In the same manner, Panamanian courts are starting to adopt the concept of a dynamic burden of proof on complex damages proceedings such as malpractice or consumer rights litigation, as the judge may order one of the parties to submit evidence alleging this party is in the stronger position to provide such evidence.  

  89. 45.

    What are the most significant recent developments regarding judicial reform? Is any proposed legislation likely to affect the civil litigation market?

  90. Panamanian courts have recently completed a progressive switch to the adversarial system of criminal justice, and the new proceedings are affecting matters significantly. The most important breakthrough of the adversarial system is the dramatic reduction in legal terms and it promises to ensure faster rulings.  

    The recent implementation of the Bankruptcy Law No. 12 of 2016, will likely affect the civil litigation market as it will provide a different scope of litigation practices due to its debtor-orientated approach, which permits restructuration under a new set of actions to prevent the insolvent debtor of going bankrupt.

    In a similar manner, it should be noted that draft Law No. 244 of 2015 is currently under discussion at the National Assembly. This proposed bill contemplates an extensive procedural reform based on the simplification of civil proceedings. On the Administrative Law and Constitutional law litigation branches we look forward to the draft Laws that will bring a significant procedural overhaul of the legislation applicable to this matters.

  91. 46.

    Describe any recent noteworthy litigation and arbitral cases.

  92. Of note is that the Panama Canal Authority is currently undertaking an important group of arbitral cases against the Consortium in charge of construction of the new set of locks, which was inaugurated in June 2016.  

    As a matter of fact, one of those Arbitral dealings was awarded to the Panama Canal Authority, consisting of a 192.8 million dollar claim, as ruled recently by a Miami-based International Chamber of Commerce (ICC) arbitration panel. News clipping: (Reuters)

    https://www.reuters.com/article/us-panama-canal/panama-canal-wins-193-million-arbitration-over-payments-idUSKBN1AG2NW.

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Questions

  1. 1.

    Outline the court system in your jurisdiction.


  2. 2.

    What remedies are available to a local entity or resident that is in a dispute with a foreign entity? Do the laws provide foreign entities the same rights afforded to local entities? Are there laws requiring foreign entities to post a bond or other security before they can defend a suit?


  3. 3.

    What is the process by which a foreign entity may challenge the jurisdiction or venue of the; court where litigation is filed? What factors are considered when a court evaluates whether; to exercise jurisdiction over a foreign entity?


  4. 4.

    What is the most common type of litigation encountered in your jurisdiction by foreign entities?


  5. 5.

    How frequently do parties pursue criminal actions in the context of commercial disputes? May criminal trial evidence be adduced in follow-on civil litigation? May civil cases be brought concurrently or after criminal litigation?


  6. 6.

    Is there a right to a trial by jury in a commercial dispute?


  7. 7.

    Do courts require or strongly encourage mediation or other alternative dispute resolution methods before or during a litigation proceeding?


  8. 8.

    Will choice of law and choice of forum provisions in a contract be recognised?


  9. 9.

    Does your jurisdiction have a specific arbitration law? Are arbitration awards enforced by the courts? May courts enjoin/prohibit arbitration proceedings in matters that are also pending in a court proceeding?


  10. 10.

    Do the courts recognise attorney-client privilege? If so, is the privilege applicable to in-house lawyers?


  11. 11.

    Are legal proceedings public? In other words, can the general public observe hearings and review the filings of the parties?


  12. 12.

    May a defendant join other potentially liable parties to the existing lawsuit?


  13. 13.

    How may a party enforce a foreign judgment?


  14. 14.

    How is service of process effected?


  15. 15.

    How much time does a party have to answer a complaint? Can a party extend this time?


  16. 16.

    What types of pretrial proceedings are available in court? What kinds of dispositive motions can be filed before trial? Under what circumstances may a lawsuit be dismissed prior to trial?


  17. 17.

    How long does it take to obtain a first-instance judgment in a typical commercial litigation case?


  18. 18.

    Is a party required to submit all facts, arguments and supporting evidence with its initial pleading?


  19. 19.

    Does litigation provide a process for investigating claims or right to discovery of evidence prior to trial?


  20. 20.

    Does litigation provide a process to subpoena or obtain documents or testimony from third parties?


  21. 21.

    Does the judge or opposing counsel examine witnesses?


  22. 22.

    How may evidence be challenged? Are there specific rules of evidence?


  23. 23.

    Do courts typically allow hearings at or before a trial? At what stage may parties present expert witness testimony?


  24. 24.

    What must be demonstrated to collect a debt based on a written instrument?


  25. 25.

    What remedies are available in your jurisdiction to a minority shareholder of a corporation in a dispute with the corporation or the majority shareholders?


  26. 26.

    What rights are available in the courts for someone holding a maritime lien interest in a vessel?


  27. 27.

    What rights are available for a party holding a security interest in real property and personal property? Are there expedited proceedings to allow the recovery of property serving as security for debt obligations?


  28. 28.

    Describe the types of employment disputes that frequently result in litigation.


  29. 29.

    Does your jurisdiction allow class actions or some form of collective litigation proceeding?


  30. 30.

    Do government-owned or controlled entities enjoy any privilege when they are engaged in commercial activity and involved in a commercial or administrative litigation?


  31. 31.

    Do foreign states or entities controlled or owned by foreign states enjoy any privilege when they are engaged in commercial activity and involved in a commercial or administrative litigation in your jurisdiction (state immunity)?

  32. 32.

    Is injunctive or other relief available on an emergency basis?


  33. 33.

    Is injunctive relief available as part of a final award? If so, in what types of cases do courts usually provide injunctive relief?


  34. 34.

    What are the typical court fees and costs required to file a civil lawsuit?


  35. 35.

    Is a bond required for a non-resident? What is the amount of the bond?


  36. 36.

    What types of damages are available? How are damages quantified? Are punitive damages available?


  37. 37.

    Is the losing party liable for the prevailing party?


  38. 38.

    Will courts enforce a liquidated damages provision in a contract?


  39. 39.

    What is the appeal process against trial court decisions?


  40. 40.

    How frequently do appellate courts reverse trial court decisions?


  41. 41.

    May the courts entertain challenges to administrative decisions made by federal or local governments? If so, how frequently do courts reverse administrative decisions in favour of a private party?


  42. 42.

    How are trade secrets protected in judicial proceedings?


  43. 43.

    Are settlement agreements confidential? Must the parties’ settlement agreement be certified by the court?


  44. 44.

    Who has the burden of proof at trial? What is the burden?


  45. 45.

    What are the most significant recent developments regarding judicial reform? Is any proposed legislation likely to affect the civil litigation market?


  46. 46.

    Describe any recent noteworthy litigation and arbitral cases.


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