{"id":10850,"date":"2014-07-24T11:21:47","date_gmt":"2014-07-24T16:21:47","guid":{"rendered":"http:\/\/panamaadvisoryinternationalgroup.com\/blog\/?p=10850"},"modified":"2014-07-24T11:21:47","modified_gmt":"2014-07-24T16:21:47","slug":"arbitration-on-panama-canal-dispute-to-begin-in-miami","status":"publish","type":"post","link":"https:\/\/panamaadvisoryinternationalgroup.com\/blog\/arbitration-on-panama-canal-dispute-to-begin-in-miami\/","title":{"rendered":"Arbitration on Panama Canal dispute to begin in Miami"},"content":{"rendered":"<p><a href=\"http:\/\/panamaadvisoryinternationalgroup.com\/blog\/wp-content\/uploads\/2014\/07\/Arbitration_Aug2013.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-10851\" title=\"Arbitration_Aug2013\" src=\"http:\/\/panamaadvisoryinternationalgroup.com\/blog\/wp-content\/uploads\/2014\/07\/Arbitration_Aug2013.jpg\" alt=\"\" width=\"578\" height=\"382\" srcset=\"https:\/\/panamaadvisoryinternationalgroup.com\/blog\/wp-content\/uploads\/2014\/07\/Arbitration_Aug2013.jpg 752w, https:\/\/panamaadvisoryinternationalgroup.com\/blog\/wp-content\/uploads\/2014\/07\/Arbitration_Aug2013-300x198.jpg 300w\" sizes=\"auto, (max-width: 578px) 100vw, 578px\" \/><\/a><\/p>\n<p>Arbitration of the first claim in a $1.6 billion dispute over cost  overruns in the expansion of the Panama Canal gets under way Monday.<\/p>\n<p>It  will start with a teleconference to determine procedures, both sides\u2019  positions and a timeline. Then the impasse will be arbitrated by an  international tribunal seated in Miami, said Carolyn Lamm, an attorney  who is representing the Spanish-led consortium that temporarily halted  work on the canal earlier this year.<\/p>\n<p>Ports throughout the  Americas, including those in South Florida, are avidly following  Panama\u2019s efforts to expand its canal to handle post-Panamax ships that  are too long, too wide and too heavy for the current canal. And they\u2019ve  made big plans of their own based on the canal expansion.<\/p>\n<p>The money dispute pits the Panama Canal Authority, which oversees  operations of the 50-mile-long canal, against Grupos Unidos por el  Canal, a consortium of international construction companies that is the  main contractor on the $5.25 billion expansion.<\/p>\n<p>The tribunal will  work through the dispute claim by claim, said Lamm, a partner in the  Washington, D.C., office of White &amp; Case. \u201cBoth sides are interested  in completing work on the canal as quickly as possible and moving  forward on this dispute,\u201d she said. \u201cBoth parties do want a quick  process.\u201d<\/p>\n<p>GUPC \u2014 which includes Sacyr Vallehermoso (Spain), Salini  Impregilo (Italy), Jan del Nul Group (Belgium) and Constructora Urbana  (Panama) \u2014 walked off the job for two weeks in February after several  weeks of negotiations failed.<\/p>\n<p>On Dec. 30, Sacyr, the leader of the  consortium, gave the canal authority 21 days to cover its additional  costs or face a work suspension. The canal authority has always  contended that the contract gives the contractor no grounds to suspend  work.<\/p>\n<p>Work on the expansion resumed Feb. 20 after the canal  authority agreed to pay $37 million to cover December invoices. GUPC  also agreed to deliver all rolling gates for the massive new locks by  February 2015, and both sides signed off on a financing structure that  allows construction to go forward during the period of the dispute.<\/p>\n<p>\u201cIn parallel to this, the dispute resolution is going on,\u201d Lamm said.<\/p>\n<p>In  their contract, both sides agreed to arbitration to resolve their  differences using International Chamber of Commerce rules and Miami as  the arbitration venue. Private arbitration in a neutral location is  growing in popularity as a way to resolve cross-border disputes among  multinationals.<\/p>\n<p>The high-profile arbitration comes at a time when  Miami is coming into its own as an international arbitration center.  Arbitration activity in Miami increased by 161 percent between 2010 and  2013 when there were 128 proceedings, according to the International  Centre for Dispute Resolution.<\/p>\n<p>Ultimately, the canal dispute will  be settled by a tribunal composed of Bernard Hanotiau of Hanotiau &amp;  Van den Berg in Brussels, Bernardo Cremades from Madrid (appointed by  GUPC) and Robert Gaitskell of London (appointed by the canal authority).  Hanotiau is serving as president of the tribunal.<\/p>\n<p>\u201cThere is no  appeal,\u201d Lamm said. But in the case of \u201csomething fairly egregious,\u201d  Lamm said, there is a legal mechanism in which an award can be set  aside.<\/p>\n<p>Arbitration tribunals often meet in a hotel, but it will be  up to the Panama Canal tribunal to designate a place for its  closed-door sessions.<\/p>\n<p>GUPC won a $3.1 billion contract in 2009 to  build a third set of bigger locks for the canal. Its bid was $1 billion  lower than its closest competitor and there have been criticism that it  was a low-ball bid. GUPC says it needs more money to finish the project  because, among other things, it ran into unanticipated geological  conditions at the work site.<\/p>\n<p>The canal\u2019s current locks will be  used in conjunction with the new locks when the project is finished.  Originally, the canal authority had hoped the expansion would be  completed this year \u2014 in time for the 100th anniversary of the canal in  August.<\/p>\n<p>But the completion date has been pushed back several times  and it may be early 2016 before big ships begin transiting the canal.  The canal authority says the expansion project is now more than 76  percent completed.<\/p>\n<p>PortMiami plans to have a dredging project  finished by the summer of 2015, making it the only East Coast port south  of Norfolk, Virginia, expected to be big-ship ready by the time the  canal expansion is completed.<\/p>\n<div>\nRead more here: http:\/\/www.miamiherald.com\/2014\/07\/20\/4245647\/arbitration-on-panama-canal-dispute.html#storylink=cpy<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Arbitration of the first claim in a $1.6 billion dispute over cost overruns in the expansion of the<\/p>\n","protected":false},"author":5,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-10850","post","type-post","status-publish","format-standard","hentry","category-news-articles-panama-perpsective"],"yoast_head":"<!-- This site is optimized with the Yoast 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