The Panama Canal Authority (ACP) has issued a statement rejecting the admissibility of some financial claims made recently by contractor GUPC relating to the Canal’s expansion project.
Responding to reports in European media of a $2bn cost overrun claim by GUPC, the ACP’s statement says that the reported $5.673bn total claim was already submitted to the International Chamber of Commerce (ICC) for arbitration in mid-December.
“Without prejudice of the merits of these claims, the ACP rejects the admissibility of several of these new claims that GUPCSA submitted directly and without complying with the dispute resolution mechanism of the Contract, to ICC arbitration,” the ACP statement reads.
GUPC (Grupos Unidos por el Canal) is a multinational consortium led by Spanish company Sacyr Vallehermoso and also comprises firms from Italy, Belgium and Panama. It built the new third locks, which were centrepieces of the Canal expansion project, but the project suffered delays and budget escalation before its completion and inauguration in June 2016.
The ACP’s statement says that a move to arbitration would be too hasty because the contractually specified steps for dispute resolution prior to arbitration have not yet played out. Those steps – first one called the Employer Representative Determination, then the Dispute Adjudication Board of the ICC – are still pending.
“The ACP will file its answers and objections in the corresponding instances in due course,” reads the statement.
