Panama Canal Authority (ACP) Wins Arbitration Against GUPC Consortium
The Panama Canal Authority (ACP) won the arbitration ruling case in a long-standing dispute related to cost overruns against Grupo Unidos por el Canal (GUPC), a consortium which constructed the Expanded Panama Canal. The ruling was given by a Miami-based Arbitration court on Friday, according to which $265 million shall be returned to the Panama Canal Authority(ACP) by GUPC. The dispute was initiated in 2015, which mainly focused on the cost overruns largely dealing with the concrete quality.
GUPC, formed by Spain’s Sacyr, Italy’s Salini- Impreglio, Belgium’s Jan De Nul and Panama’s Constructora Urban, SA (CUSA), was awarded a $3.2 Billion project to expand the Panama Canal in 2009. However, the total amount increased to $5.67 billion, due to unplanned costs. The ACP has been strongly disagreeing the claims made by GUPC.
Both the parties had approached the International Arbitration separately over the cement quality dispute. In January 2016, the Dispute Resolution Board(DAB), which was formed to hear the disputes arising between the ACP and the GUPC, ruled in favors of the contractor(GUPC).There are two arbitration decisions regarding separate disputes between GUPC and ACP that are still unresolved.
With the ruling in latest arbitration, 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 recognize 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 partners have filed.”
Sacyr also aded that it, together with GUPC, shall continue to pursue claims against ACP in various international fora such as the International Criminal Court(ICC) and United Nations Commission on International Trade Law(UNCITRAL).
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- By Sowmya Sastry