Skip to main content

Maritime Law--Miami Home for Arbitration of Panama Canal Dispute


It is generally presumed that big arbitrations generally go to New York or London. However, the case between the Panama Canal Authority ("ACP") and the contractor consortium constructing the Panama Canal known as Grupos Unidos por el Canal ("GUPC") have recently begun preliminary discussions for arbitrating their $1.6 billion dispute regarding alleged cost overruns on the largest infrastructure project in the Western Hemisphere.  

Photograph taken from news.nationalgeographic.com July 31, 2014
 
Miami's legal community has focused over the past 15 years on developing the expertise and venues to handle arbitration cases, particularly for disputes arising in Latin America. This is especially important, as Miami has the legal expertise, the language capabilities and the cultural experience to handle disputes arising out of Latin America.
 
The Dispute at Issue
 
According to previous statements from ACP and GUPC, the disagreement began in 2012, three years after GUPC beat out Bechtel with a lower bid and began building a series of larger canal locks to accommodate larger ships. GUPC is comprised of Sacyr Vallehermoso, a Spanish contractor leading the consortium, Impregilo of Italy, Jan de Nul of Belgium and CUSA of Panama.
 
In October 2012, GUPC filed a claim for $585 million in unforeseeable concrete design changes. ACP rejected the claim and it was submitted to the Dispute Adjudication Board of the International Chamber of Commerce ("ICC").

The ICC had yet to ruled when GUPC presented a disruption claim for $900 million December 23, 2013. A week later, GUPC threatened a work stoppage starting January 20, 2014 if ACP did not pay the combined claims, which amounted to half of the original project cost.

ACP claimed a breach of contract and insisted on holding GUPC to its original bid of $3.2 billion.

Work stopped for a few weeks in February, then resumed at a 30 percent level because GUPC did not have the cash flow to rehire all of its subcontractors. A breakthrough came March 15 when insurer Zurich North America provided a $400 million surety bond, and GUPC and ACP each put up matching funds of $100 million.

The parties will discuss scheduling this week and negotiate the rules of the road on how to proceed with the exchange of information. The parties are following the ICC rules.
 
One way or another, the Panama Canal expansion will get done, and the project partners will settle their differences, but what international arbitration experts will remember is they worked out their problems in Miami.
 
If you are interested in learning more about the details of this unique arbitration or wish to contact me in general, you may do so at mov@chaloslaw.com.

Comments

Post a Comment

Popular posts from this blog

Maritime Law--Florida's Arbitration Code Is Now Revised

Those of us that practice maritime law regularly must always be on the lookout for the contract that may contain an arbitration clause. Thus, any laws related to arbitration are important to those of us practicing in this sector.       The Florida legislature has revised the Florida Arbitration Code ("FAC") and named it the Revised Florida Arbitration Code (the " Revised Act"). Since 1967, the FAC had gone mostly unchanged. The Revised Act addresses concepts that were not addressed in the old law, such as the ability of arbitrators to issue provision remedies, challenges based on notice, consolidation of separate arbitration proceedings, required conflict disclosures by arbitrators, among other major changes. The Revised Act lays out a detailed framework for international arbitration conducted under Florida law and repeals sections of the FAC. The Revised Act spells out what experienced arbitrators knew the case law to be, but codifies it all in one pl...
4 comments
Read more

Maritime Law--Lozman Case Revisited in Miami?

In Hoefling v. City of Miami , Case no.: 14-12482 (11th Cir. Jan. 25, 2016), the U.S. Court of Appeals for the Eleventh Circuit revived almost all of Hoefling's claims. You ask, "Who is Hoefling?" Hoefling  lived on his sailboat Metis O moored off Dinner Key for nearly a decade—until the day he came home and it was gone. About three months earlier, an officer from the Miami Police Department's Marine Patrol Detail tagged Hoefling's vessel for lacking a sanitary device and a working anchor light. He had a deal to use the facilities at the nearby marina but quickly went out and reportedly bought what he needed to comply. Three months later while he was on a business trip, the City of Miami seized and destroyed his boat and all his belongings. As a result, he was homeless. He sued under § 1983, maritime law, and state law. He stated a claim under the Fourth Amendment for seizure and destruction without notice or cause and a “taking.”    At the ...
5 comments
Read more

Maritime Law--Novel Rule B Attachment Rejected by Eleventh Circuit

In World Wide Supply OU v. Quail Cruises Ship Management , Case No. 14-14838 (11th Cir. Sept. 30, 2015), the Eleventh Circuit Court of Appeals affirmed the district court’s order vacating an attachment of legal settlement funds.  At issue in this appeal was an attachment of property made pursuant to Supplemental Admiralty Rule B. This appeal had a complicated background, involving multiple lawsuits in federal district courts, Florida state court, and a Spanish bankruptcy court. The common denominator of these suits was Quail Cruises Ship Management, from which multiple parties, including participants in the appeal, tried to collect money that they believed Quail owed them. This is not surprising, as there have been numerous cases against Quail due to a failed cruise venture they operated. The money at issue arose from the legal settlement of a dispute over the purchase of a cruise ship featured on ABC Television Network’s long-running series, The Love Boat. The ...
5 comments
Read more