Panama Canal: Arbitration panel orders GUPC to pay $848m 

Panama Canal: Arbitration panel orders GUPC to pay $848m 
Panama Canal. Illustrative picture. PHOTO CREDIT: The Star

The Panama Canal Authority (ACP) said an arbitration tribunal has ordered Grupo Unidos Por el Canal (GUPC), the construction consortium that built the Panama Canal new locks, to pay back nearly $848 million. 

GUPC and its shareholders filed an arbitration against the ACP, which was carried out in accordance with the Arbitration Rules of the International Chamber of Commerce (ICC), based in Miami, the United States of America.

GUPC had requested the arbitration tribunal to declare that the advances granted by the ACP for the execution of the contract had not expired and were not liquid or enforceable until all of its claims were resolved in arbitration.

However, on Wednesday last week, the Panama Canal Authority was notified of the Arbitral Award issued within the said Arbitration, in which the Arbitral Tribunal determined that GUPC will have to pay the ACP the initial Advances which amount to $547,958,819.42; and, the additional Advances which amount to $ 299,671,507.68, which total $ 847,630,327.10.

READ ALSO  Obasanjo hits Buhari again, says Nigeria back to Abacha era

The tribunal also authorised ACP to immediately collect the guarantee issued by UniCredit AG, London branch, in the amount of $13,186,719 to guarantee the payment of interest generated from the due date of the initial advances until 16 December 2018.  The Panama Canal Authority was, however, not authorised to withhold amounts payable to GUPC related to maintenance services, with which it must return such amounts to GUPCSA.

The tribunal also ordered Grupo Unidos por el Canal S.A. Sacyr S.A., Salini-Impregilo S.p.A., Jan De Nul N.V., Constructora Urbana S.A., and Sofidra S.A. to reimburse $395,000 to the Panama Canal Authority as costs and expenses of the members of the tribunal and administrative expenses of the International Court of Arbitration of the ICC.

READ ALSO  UK charges 4 Nigerian stowaways with attempted hijacking

Grupo Unidos por el Canal S.A. Sacyr S.A., Salini-Impregilo S.p.A., Jan De Nul N.V., Constructora Urbana S.A. and Sofidra S.A. were also ordered to pay $5,444,478.50 to the Panama Canal Authority as contribution to the legal costs and other expenses incurred by the ACP in relation to the arbitration.

All other requests for compensation required by GUPC were denied.

Last year, the tribunal had rejected a demand by GUPC for $192.8 million to cover cost overruns on the construction of the new lock.