Canal Authority claims success in $671 million arbitration

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Canal Authority claims  success  in $671 million arbitration

Posted 17/05/2023

Grupo Unidos por el Canal, S.A. (GUPC) and its shareholders, sought to obtain from the Panama Canal Authority (ACP) close to $671 million in an arbitration process and construction of the third set of locks.

But they were only granted, conditionally, $34 million. And in a game of addition and subtraction, the consortium will have to pay the Panamanian entity $20 million for legal costs.

 In a statement on Tuesday, May 16 the ACP said it was successful in the processes of greater value that they had presented in arbitration, by rejecting the claims related to the construction of the gates and the claims of the shareholders regarding the return on investment

In connection with the four claims related to the increased cost of labor, after rejecting two of these claims in their entirety, the court made a “limited finding” with respect to one of the claims.

This meant that GUPC could be entitled to an amount of up to $34 million subject to the “disturbance” arbitration admitting the claims related to an extension of time, revealed the ACP, after Sacyr - one of the members of the consortium - made public the partial victory it obtained in the international tribunal.

Meanwhile, the plaintiffs must pay the ACP a net amount of $20.6 million for legal costs and expenses assumed in the process by the Panamanian entity.

Three wins 
The relationship between the ACP and its largest contractor has been plagued by lawsuits. Five arbitrations have been recorded under the Arbitration Rules of the International Chamber of Commerce (ICC), based in Miami.

Of these five, three arbitrations concluded with arbitration awards in favor of the ACP. One of these is the one that is linked to the so-called temporary Pacific cofferdam, through which GUPC was denied the amount of $194 million and 247 days of extension that they requested.

The ACP also won the arbitration for the advances, through which the court confirmed that GUPC had to repay the overdue advances that the Panama Canal had granted it for the execution of the third set of locks for $847 million, plus another $13 million in interest concept.

Panama also won the battle related to concrete, aggregates, laboratories, and faults, in which the court ordered payment to the ACP of $271.8 million.

https://www.newsroompanama.com/news/canal-authority-claims-success-in-671-million-arbitration