United States Supreme Court Rejects Sesir’s Appeal Against Panama Canal Arbitration Economy

The Grupo Unidos por el Canal (GUPC) consortium, of which Spanish Cesir is a part, has lost its latest battle in an attempt to overturn an arbitration award condemning it to pay the Panama Canal Authority (ACP) 272 million. dollars (about 251 million euros at current exchange rates). Along with the decision to reject the case study, the ruling on the validity of the arbitration was challenged by the GUPC alleging bias of the arbitrator, an argument that the judges rejected in the first instance and in subsequent appeals.

The awards were issued in arbitration at the International Court of Arbitration in Miami (Florida) under the Rules of the International Chamber of Commerce (ICC). GUPC’s challenge to the arbitrator was based on his alleged bias as a result of professional interactions between him or between him and persons representing ACP.

An attempt to set aside the arbitration result was made by the GUPC after the first partial award and after receiving new information about the arbitrators. The challenge was first analyzed by a Miami judge, who rejected it in a ruling on November 14, 2018.

Sesir and his partners then moved to the United States Court of Appeals for the Eleventh Judicial Circuit, which has jurisdiction over the Florida case. The Court of Appeal also did not find any interaction between the arbitrators and the ACP problematic. “We decline to grant rescission because these individuals worked together elsewhere. The record discloses no evidence of actual bias in the Panama 1 arbitration. And as to potential bias, Grupo Unidos has established only that some of the participants in the arbitration were acquainted with each other. , and ‘the fields of familiarity feature do not show prejudice due to the confluence of’,” said the ruling in August 2023.

Now it is the highest judicial body in the United States, the Supreme Court, which has in a resolution refused to accept the case for study. This makes the judgment of the appellate court final and, therefore, recognizes the arbitration awards. According to Atkins Chambers, the firm representing the Panama Canal Authority, the award forced Sesir and its partners to pay a net sum of $271.82 million. This is the result of the amount to be paid by the GUPC to the canal for 284.74 million dollars, which is 12.92 million less in claims that the business consortium agreed to, all costs and expenses.

The awards issued in this lawsuit related to a number of elements, including the basalt used to make the aggregates, concrete mix formulas, foundation conditions and contract clauses related to field testing laboratories. Many elements of the lawsuit had previously gone through the Dispute Adjudication Board (DAB).

The awards ruled in favor of ACP on key issues of basalt used to make aggregates and concrete mix designs, as well as rejecting GUPC shareholders’ claims on return on investment. The awards ruled in favor of GUPC on several issues relating to base conditions and on-site laboratories.

In the 2023 annual accounts presented by Sesir, issued on February 28, the company indicates that GUPC has presented “various claims grouped, objective and standardized by processes, totaling $3,427 million to date.” . These claims arising from various unforeseen costs arising from the project are currently in international arbitration.

Sesir, which owns 41.6% of GUPC, also explained that independent expert DFL Associates has updated the report dated December 1, 2023 in which it analyzes each of the claims, describing the stage they were in as of the date of the report and from An estimate of the amount that could reasonably be expected to be recovered in each. It is concluded that it is reasonable to expect that $1,565 million will be recovered, down from the $1,824 million estimated a year ago.

On the other hand, after a succession of setbacks, including the rejection of the claim for the redesign of the canal expansion gates, which the consortium had to adapt to the project, Sesir is conservative and reduced the recovered value to point out. He no longer expects any additional income. “To date, $121 million has been recovered in claims. Sesir Group’s estimate of the recoverable value of claims presented by GUPC at the end of 2023 amounts to this last amount recovered in advance, amounting to $446 million in 2022, its annual report said.

Follow all information economy And Business in Facebook And xor in us Weekly newsletter