Panama Canal wins $265 million refund in expansion ruling

The Panama Canal Authority Spanish company Sacyr and the companies that accompanied it as the main contractors in the waterway expansion project.

Grupo Unidos por el Canal (Gupc) ,  the consortium in charge of the design and construction of the third set of locks for Panama received an adverse ruling from the Court of Arbitration of the International Chamber of Commerce, based in Miami, , which ruled that it must return $265 million dollars to the Panama Canal Authority (ACP).

The Canal and the consortium led by the Spanish company Sacyr have fought a  five-year legal battle in claims for alleged cost overruns in the construction of the new locks, which included a claim related to the quality of the basalt and the concrete mix used in the project.

Gupc sought to obtain a total of $430 million plus interest from the ACP. The ACP in turn was asking for the refund of the amount that was paid as a result of the  Conflict Resolution Board (DAB) decisions in the Dispute ($244 million), in addition to a little more than $20 million related to other disputes, which gave a total of $265 millions.

The Panama Canal asked to bring Gupc’s claim to international arbitration, after a previous instance, when the DAB had partially proved the contractor right.

It had issued in December 2014 a decision in which it recognized Gupc the payment of a fraction of the amounts claimed to the waterway with respect to the concrete mix.

In this case, the contractor claimed $463 million, but the DAB recognized $233 million.

The  Canal, at that time under the leadership of Jorge Luis Quijano, presented a note of dissatisfaction, which allowed it to take the case to international arbitration in 2015.

Gupc also moved and requested arbitration to try to have this instance rule in his favor for the entire amount he initially claimed.

Friday the ACP was notified that it has the right for Gupc, jointly and severally with its shareholders to cancel the sum of $265 million.

The ACP, meanwhile, must pay Gupc, as a result of the variation related to the laboratories on site, $17 million-plus the financing costs