The Grupo Unidos por el Canal (GUPC) consortium, of which the Spanish company Sacyr is a part, has lost the latest battle in its attempt to annul the arbitral awards that condemned it to pay the Panama Canal Authority (ACP) an amount of $272 million (approximately €251 million at the current exchange rate). The decision to reject the study of the case upheld the validity of the arbitration that GUPC had contested on the grounds of the arbitrators’ partiality, an argument that was dismissed by the judges in the first instance and in a subsequent appeal. The awards were issued in an arbitration in Miami, Florida, by the International Court of Arbitration under the rules of the International Chamber of Commerce (CCI).
The attempt to annul the arbitration result was made by GUPC after an initial partial award and after obtaining new information about the arbitrators. The challenge was first analyzed by a Miami judge, who rejected it in a judgment dated November 14, 2018. Subsequently, Sacyr and its partners appealed to the Eleventh Circuit Court of Appeals in the United States, which has jurisdiction over Florida cases. The Appeals Court also did not find any issue with the interactions between the arbitrators and the ACP. The Supreme Court of the United States has now rejected the case for review, making the Appeals Court’s decision final, thereby validating the arbitral awards.
The awards issued in this dispute related to various elements, including the basalt used to manufacture aggregates, the concrete mix formula, foundation conditions, and contractual clauses related to on-site testing laboratories. The awards ruled in favor of the ACP on the main issues of basalt used for aggregates and concrete mix design, as well as rejecting the shareholders’ claims regarding investment performance. The awards ruled in favor of GUPC on some issues related to foundation conditions and on-site laboratories.
In its 2023 annual accounts, Sacyr reported that GUPC has filed various claims totaling $3.427 billion, arising from unforeseen costs in the project, which are currently being arbitrated internationally. The independent expert DFL Associate has updated its analysis of each claim, estimating a recovery of $1.565 billion, down from $1.824 billion a year earlier. Following a series of setbacks, including the rejection of a claim for the redesign of the Canal Expansion gates that the consortium had to adjust to the project, Sacyr has become more conservative, no longer expecting any additional income from claims.
After recovering $121 million in claims to date, Sacyr estimates the recoverable value of GUPC’s claims at the end of 2023 to be $446 million, compared to the $1.824 million estimated in 2022. This adjustment reflects the challenges faced by the consortium in various legal disputes and the uncertainties surrounding the outcome of its arbitration proceedings. Despite these setbacks, Sacyr remains committed to resolving the outstanding claims and recovering as much value as possible from its investments in the Panama Canal project.
