Pardini & Asociados Secures Landmark Court Judgment on US–Panama Air Transport Agreement

Pardini & Asociados achieves Landmark Judicial Decision Recognizing the Primacy of the US-Panama International Air Transport Agreement in Economic Competition Disputes

On September 12, 2025, the Third Superior Court of Justice (Court of Appeals) of the First Judicial District issued a judgment that marks a milestone for Aviation law and the hierarchy of norms in Panama. In proceedings initiated by ACODECO for alleged antitrust monopolistic practices in the travel agency and airline sector, the law firm Pardini & Asociados, representing United Airlines, raised several defenses, including an international-law exception based on the 1998 Bilateral International Air Transport Agreement between Panama and the United States.

In its ruling, the Court rejected all the exceptions filed by the airlines except one:

“The international law exception based on the 1998 Agreement between Panama and the United States, submitted by Continental Airlines, Inc. (now United Airlines), is recognized.”

This acknowledgment—directly resulting from the arguments advanced by Pardini & Asociados—is of particular significance because it limits the authority of domestic administrative bodies when a binding international treaty governs the substantive issues in dispute.

Key Legal Findings Highlighted by the Court

1. The dispute had to be governed by the 1998 Bilateral Agreement

On page 14, the Court expressly adopts the position presented by Pardini & Asociados:

“The Agreement indicated that any controversy… would correspond to the Panamanian State, through its Ministry of Foreign Affairs… ACODECO lacks jurisdiction because the conduct under investigation is directly regulated by the Agreement.”

The Court agrees that the Agreement establishes a special regulatory regime for fare relationships, commissions, and commercial structures between the airlines of both States.

2. Express recognition of the binding nature of international agreements

The Court analyzes the nature of the applicable international framework, citing the regulatory effects of IATA and the obligations arising from multilateral and bilateral treaties (pp. 5–12).

It emphasizes that because Panama is bound by aviation treaties:

• It may not treat conduct regulated internationally as local monopolistic infringements without first verifying whether such practices are authorized by the applicable international legal framework.
• ACODECO lacks the authority to review or alter fare structures and commission schemes established under the Agreement and IATA.

3. Fare and commission structures arise from an international regime, not collusive behavior

Across several sections (pp. 10–12, 15–17), the Court explains that the reduction of commissions paid to travel agencies:

• Derives from IATA resolutions,
• Forms part of a uniform system accepted by States,
• Does not, by itself, constitute unlawful collusion.

For this reason, the Court finds that ACODECO’s analysis failed to consider the applicable international air law regime, instead applying standards suitable only to purely domestic markets.

Pardini & Asociados’ Contribution: Procedural Strategy and Technical Defense

The decision explicitly acknowledges the participation of the firm, noting:

“The firm Pardini & Asociados, judicial representative of Continental Airlines (now United), submitted an opposition brief… based on the existence of a binding International Agreement.”

Our strategy focused on demonstrating:

1. The direct applicability of the 1998 Bilateral Agreement.
2. The supremacy of international law over conflicting domestic administrative rules.
3. ACODECO’s lack of jurisdiction when the conduct is governed by a multilateral system regulated by IATA.
4. The principle of pacta sunt servanda is a core interpretative standard.

The Court adopted the exception in full, validating the legal thesis advanced by Pardini & Asociados.

Impact of the Decision on Panamanian Law

1. Precedent on the hierarchy of norms

The ruling confirms that:

• International treaties prevail over domestic laws in the event of conflict.
• Administrative authorities must first determine whether the conduct at issue is governed by international agreements.

2. Relevance for the aviation sector

The decision strengthens:

• Legal certainty for airlines operating under bilateral agreements.
• Stability in IATA-established fare and commission schemes.
• The need to assess commercial practices under international, not purely domestic, standards.

3. Implications for antitrust & competition law proceedings

The Court sends a clear message:

• Not all uniform conduct in internationally regulated markets amounts to unlawful collusion.
• Competition evaluations must consider the supranational framework governing the industry.

The September 12, 2025, ruling stands as a landmark precedent for the application of international law in Panama, particularly in sectors subject to supranational regulation such as aviation.

Pardini & Asociados is proud to have led the legal strategy that resulted in the Court’s recognition of the international law exception under the Air Transport Agreement—strengthening respect for Panama’s international commitments and reinforcing legal certainty in cross-border commercial relations.

This decision not only resolves a specific case but also contributes to the development of national doctrine on the hierarchy of norms, economic competition, and aviation law.