$671 Million Claim Dismissed by International Chamber of Commerce

The recent arbitration relating to lock gates, labour, and shareholder claims has reached its final award, which was issued by the Arbitral Tribunal. The claimants, Grupo Unidos por el Canal, S.A. (GUPCSA), and its shareholders, except for CUSA, filed a Third Set of Locks Design and Construction Contract that sought approximately B/.671 million from the Panama Canal Authority (ACP). In the final award, the Arbitral Tribunal rejected all claims concerning the construction of lock gates and the shareholders’ claims about the return on investment, with claims amounting to over US $450 million.

Regarding the four claims associated with increased labour costs, two were rejected, and in respect to one of the claims, the Tribunal made a “limited declaration,” indicating that GUPCSA may be entitled to further payment of up to approximately B/.34 million, subject to the pending arbitration granting the claimants an extension of time. However, the claimants must pay the ACP a net amount of B/.20.6 million in legal costs and expenses.

The ACP will continue to defend its interests, and the award is a victory for the ACP as claims of over $500 million were rejected. The claimants have only the possibility of recovering further monies limited to $34 million, subject to entitlement to an extension of time. The ACP maintains its position that no extension of time is due.

The Claimants pursued five arbitrations against the ACP, three of which concluded with arbitral awards in favour of the ACP. The first was the Pacific Temporary Cofferdam, in which GUPCSA was denied B/.194 million and 247 days of extension requested. The second concerned the Advances, in which the Tribunal confirmed that GUPCSA had to repay the overdue Advances granted for the execution of the third set of locks for B/.847 million plus B/.13 million in interest. The third award concerned Concrete, Aggregates, Laboratories, and Faults, with the Tribunal ordering GUPCSA to pay the PCA B/.271.8 million. For more information, the ACP website is available.

Source .