Panama Appoints Wordstone for ICSID Arbitration Defense in Orla Mining Dispute
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TL;DR
- Panama faces a $400 million ICSID arbitration filed by Orla Mining over canceled Cerro Quema concessions.
- The Panamanian Cabinet authorized hiring Wordstone Dispute Resolution as external defense counsel.
- The contract with Wordstone is capped at $4.35 million, excluding potential reimbursed arbitration costs.
- The case arises under the Canada-Panama Free Trade Agreement and is registered as ICSID ARB/24/27.
Overview
Panama has authorized the hiring of Wordstone Dispute Resolution to defend the state in an international arbitration initiated by Canadian company Orla Mining Ltd. The dispute involves Orla Mining's claim for $400 million in compensation after Panama canceled concessions for the company's Cerro Quema gold project. The arbitration is being conducted under the ICSID rules, pursuant to the Canada-Panama Free Trade Agreement.
What Happened
On July 7, 2026, Panama's Cabinet approved a resolution authorizing the hiring of Wordstone Dispute Resolution as external legal counsel for the state.
The approval follows Orla Mining Ltd.'s initiation of ICSID arbitration (Case No. ARB/24/27) against Panama, seeking $400 million over revoked concessions at the Cerro Quema project in Los Santos province.
Wordstone's contract is for professional fees of up to $4,351,934, not including arbitration-related expenses, which may be reimbursed if advanced by the firm.
The appointment formalizes an existing relationship, as Wordstone has been representing Panama in this matter since April 2025.
The Ministry of Economy and Finance published documentation supporting the procurement, citing the firm's expertise in international investment arbitration, particularly in the mining sector.
Context
The dispute stems from Panama's refusal to extend certain mining contracts, following enactment of Law 407, which implemented a moratorium on mining activities.
Orla Mining's claim is based on the Canada-Panama Free Trade Agreement, enacted in Panamanian law through Law 69 of 2010, allowing recourse to ICSID arbitration for treaty-based investment disputes.
The Cabinet applied exceptional procurement rules, justified by the high value of the contract and Wordstone's experience in similar arbitrations.
Why It Matters
- The decision underscores Panama's legal strategy and resource allocation in a high-value investment arbitration with potential financial and policy implications for the country's mining sector.
- The outcome of the case may set precedents for similar investment disputes arising from regulatory changes or concession cancellations in Panama.