The Grupo Unidos por el Canal (GUPC) consortium, of which the Spanish Sacyr is a part, has lost the last battle in its attempt to annul the arbitration awards that condemned it to pay the Panama Canal Authority (ACP) an amount of 272 million dollars (about 251 million euros at the current exchange rate).
With the decision to reject the study of the case, the ruling of validity of an arbitration that GUPC had challenged alleging the bias of the arbitrators, an argument that the judges rejected in the first instance and in a subsequent appeal.
The awards were issued in an arbitration in Miami (Florida) of the International Court of Arbitration under the rules of the International Chamber of Commerce (ICC).
GUPC's challenge to the arbitrators was based on their alleged bias as a result of professional interactions between them or between them and persons representing the ACP.
The attempt to annul the arbitration result was raised by GUPC after a first partial award and after accessing new information about the arbitrators.
The challenge was first analyzed by a Miami judge, who rejected it in a ruling dated November 14, 2018.
Subsequently, Sacyr and his partners went to the Court of Appeals of the Eleventh Judicial Circuit of the United States, the one competent for Florida cases.
The Court of Appeals also did not consider any of the interactions between the arbitrators and the ACP to be problematic.
“We refuse to grant an annulment simply because these people worked together elsewhere.
The record does not reveal any evidence of actual bias in the Panama 1 Arbitration. And as to possible bias, Grupo Unidos has established only that some of the participants in the arbitration were familiar with each other, and 'the familiarity due to the confluence of areas of specialization does not indicate bias,” said the ruling, handed down in August 2023.
Now it has been the highest judicial body in the United States, the Supreme Court, which has refused in a resolution to admit the case for study.
This makes the ruling of the Court of Appeals final and, therefore, gives validity to the arbitration awards.
According to the firm Atkins Chambers, which represented the Panama Canal Authority, the award obliged Sacyr and his partners to pay a net amount of 272 million dollars.
This is the result of amounts to be paid by GUPC to the Canal for 285 million dollars, less 13 million in claims in which the business consortium was ruled in favor, all net of costs and expenses.
The awards issued in this litigation concerned a number of elements, including the basalt used to make aggregates, the concrete mix formula, foundation conditions and contractual clauses relating to field testing laboratories.
Many elements of the litigation had previously gone through the Dispute Adjudication Board (DAB).
The awards ruled in favor of the ACP on the key issues of basalt used to make aggregates and concrete mix design, as well as rejecting GUPC shareholders' claims on return on investment.
The awards found in favor of GUPC on some of the issues relating to the foundation conditions and in relation to the on-site laboratories.
In the 2023 annual accounts presented by Sacyr, formulated on February 28, the company indicates that GUPC has presented “various claims, grouped by processes, objective and quantified, which to date amount to a total of 3,427 million dollars.” .
These claims, arising from various unforeseen costs arising from the project, are currently in the international arbitration process.
Sacyr, which has 41.6% of GUPC, also explains that the independent expert DFL Associate has updated the report as of December 1, 2023 in which it analyzes each of the claims, describing the phase they were in until the date of the report and establishing an estimate of the amount that could reasonably be expected to be recovered in each of them.
The conclusion he reaches is that it is reasonable to expect that 1,565 million dollars will be recovered, a reduction compared to the 1,824 million estimated a year earlier.
On the other hand, after a succession of setbacks, including the rejection of the claim for the redesign of the Canal Expansion gates that the consortium had to do to adapt them to the project, Sacyr is conservative and has lowered the recoverable value to point that he no longer expects any additional income.
“To date, $121 million in claims have been recovered.
The Sacyr group's estimate of the recoverable value of the claims presented by GUPC at the end of 2023 amounts to this last amount mentioned as already recovered, with 446 million dollars being the amount that was estimated in 2022, states its annual report.
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