Contractors win additional $34.9 million in Panama Canal expansion dispute

By Neil Gerrard18 May 2023

Construction work for the expansion of the Panama Canal Construction work for the expansion of the Panama Canal (Image: WeBuild)

A group of contractors who worked in a consortium to expand the Panama Canal have won $34.9 million at a tribunal following a dispute on the project.

The arbitral tribunal at the International Chamber of Commerce (ICC) issued an award in the proceedings after Grupo Unidos por el Canal (GUPC) made a claim for damages related to the construction of the lock gates of the expanded canal.

The tribunal decided that GUPC had the right to receive the additional sum for claims related to labour costs, in addition to an amount previously awarded by the Dispute Adjudication Board.

The GUPC consortium is a partnership of contractors including Italian firm Webuild, Spanish infrastructure business Sacyr, Belgian-owned civil engineering company Jan De Nul, and Panamanian firm Constructora Urbana.

But the tribunal did not accept another claim filed by GUPC related to the construction of the lock gates of the expanded Panama Canal.

The tribunal also accepted other claims related to the extended period of construction, referring the determination of the relative awards to another panel of arbitrators, already in progress.

GUPC completed the expansion of the Panama Canal in 2016 and oversaw its maintenance for three years.

In a statement, Webuild said it “met all the obligations it was required to meet”. It added that since the expanded canal entered into operation, the Panama Canal Authority has generated more than $3 billion in annual revenues from tolls.

Webuild has also started an arbitration against the Republic of Panama before the International Centre for Settlement of Investment Disputes (ICSID) regarding its own investment in the project.

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