Panama Canal to get $548M after arbitration win

Dec. 13 (UPI) -- The Panama Canal Authority, the autonomous entity that runs the canal linking the Pacific and Atlantic oceans, has won $548 million in arbitration court against a consortium that expanded the canal.

An arbitration court in Miami ordered Grupo Unido por el Canal, led by Spain-based construction company Sacyr, to return nearly $548 million in advance payments that were meant to be returned but weren't, El Pais reported Wednesday.

Sacyr said late Wednesday it's borrowing $255 million to help cover its share of the payment, as a member of the consortium. This ruling only affects the arbitration over the advance payment, and not a larger arbitration proceeding that will continue, it added.

Italy-based Salini Impregilo, another member of the construction consortium, separately said it will use $217 million from cash resources to make its payment.

"Salini Impregilo's pro quota contract advanced payments, guaranteed with letters of credit, equal to a principal amount of $217 million, will be paid immediately from its available cash resources," it said .

"The arbitration award will not affect the outcome of the outstanding arbitration cases involving GUPC and its partner Salini Impregilo for a total request of $5.2 billion."

There are five legal proceedings underway between the canal authority and the the consortium, which also includes Belgium's Jan de Nul and local construction company Urbana, El Pais reported.

The Miami court ruled the consortium must honor a commitment to return the payments, and could not hold what was meant to be deposits on grounds there were legal actions ongoing, El Pais reported.

The dispute started because expansion work that started in 2009 went over budget by at least $1.6 billion by 2013. Negotiations to cover the additional costs broke down and put the project in jeopardy. In 2014, the parties agreed to allow the project to continue and arbitration to decide who would cover the added costs.

A report in Panama's La Prensa newspaper on Thursday said the consortium also must return another advance payment for just under $300 million. El Pais reported, however, the Miami arbitration covered only the $548 million advance payment -- and the $300 million amount will be decided by a London court early next year.

The $548 million arbitration was made by the International Chamber of Commerce of Miami.

The Miami-based commerce chamber did not have any information posted as of Thursday morning.