The Full Bench of the Supreme Court of Justice, with magistrate Oydén Ortega Durán as the opinion author, declared on August 13, 2012 that the following phrases are not unconstitutional: 'The Regulatory Authority shall impose on providers…', contained in the first paragraph of article 145 of Law 6 of February 3, 1997; 'the Regulatory Authority must resolve the case…', contained in numeral 6 of the same article; and 'The Regulatory Authority shall impose the sanctions provided…', contained in article 146 of the same statute. That law establishes the regulatory and institutional framework for the provision of public electricity service. The case was filed under docket number 866-11.

The challenge argued that the contested phrases violated article 32 of the Constitution — which guarantees adjudication by a competent and impartial authority — and article 4, which incorporates the norms of international law, in particular article 8(1) of the American Convention on Human Rights. The challenger maintained that, by concentrating in the Regulatory Authority itself the powers to investigate, bring charges, and then sanction, the statute created a functional incompatibility that compromised the impartiality of administrative decisions.

The Full Bench found no constitutional defect. The court noted that Law 6 of 1997, as integrated with Decree-Law 10 of 2006 in the consolidated text adopted by Executive Decree No. 143 of 2006, clearly distinguishes two functions: the Substantiating Commissioner, appointed by the General Administrator, conducts investigations, formulates charges, receives evidence, and maintains the administrative record; the General Administrator, by contrast, is the one who adopts the final resolution and who may be challenged for bias. The Commissioner serves as the instructing body; the General Administrator acts as the adjudicator.

The Attorney General of the Nation, in Opinion No. 1 of January 4, 2012, had also opined that the functions were not incompatible, noting that article 31 of Law 26 of 1996 further provides that ASEP resolutions may be challenged before the Third Chamber of the Supreme Court of Justice, which guarantees subsequent judicial review. The Full Bench reproduced this reasoning and added that the sanctioning process incorporates stages for submission of defenses, evidence, arguments, and a two-tier administrative appeal before the administrative avenue is exhausted.

The ruling acquired significance for the regulatory architecture of Panama's electricity sector: by validating ASEP's sanctioning power under the instructor-adjudicator scheme of Law 6 of 1997, the Court established the minimum functional-separation standard required in administrative sanctioning proceedings conducted by public service regulators. That standard takes on renewed relevance in the current debate over distributed generation, where the definition of infractions and ASEP's sanctioning powers will again come to the forefront as the regulatory framework for self-generated electricity expands.