The Panama Canal Authority (ACP) has reportedly won an arbitration ruling in a long-standing dispute between ACP and Grupo Unidos por el Canal (GUPC), a consortium that constructed the Expanded Panama Canal.
According to the ruling by a Miami-based arbitration board on Friday, GUPC will return a total of $265 million to ACP, Reuters reported.
The dispute is related to cost overruns in the construction of the third set of locks for the waterway.
Back in 2009, GUPC — formed by Spain’s Sacyr, Italy’s Salini – Impregilo, Belgium’s Jan De Nul and Panama’s Constructora Urban, SA (CUSA) — was awarded $3.2 billion project to expand the canal. However, due to the unplanned costs, the total amount increased to $5.67 billion.
The ACP has been strongly opposing the claims submitted by the consortium.
Both parties had separately sought international arbitration over a cement quality dispute. Back then, the Dispute Resolution Board (DAB) was also formed to hear disputes arising between the ACP and the contractor and ruled in favour of GUPC in January 2016.
Commenting on the latest arbitration ruling, Sacyr said, “Sacyr, which holds a 41.6% share in GUPC, respects but does not share the decision of the International Chamber of Commerce, overturning the prior decision of the Dispute Arbitration Board to recognise 50% of GUPC’s claim relating to the composition of basalt and concrete formula.”
“The award, announced today, orders GUPC to give approximately $240 million of the $265 million that the DAB initially recognised back to ACP. The claim represents just 8.8% of the total claims that GUPC and its patners have filed.”
Sacyr added that it will, together with GUPC, continue pursuing claims against ACP in various international fora including ICC and the United Nations Commission on International Trade Law (UNCITRAL).