Panama Canal Authority Appeals $233m Payout

The Panama Canal Authority said on Tuesday it had asked for an international arbitration panel to review a decision to award $233 million to the consortium expanding the canal in a dispute over cement quality.

The consortium, led by Spain's Sacyr and Italy's Salini Impregilo, and including Belgium's Jan de Nul and Panama's CUSA, said in January it had won $233 million of the $463 million it claimed in the dispute.

Any international arbitration would take place in Miami, the canal authority said.

The consortium has filed a series of claims totaling some $2.3 billion over the dispute that halted work early last year on the expansion to allow bigger vessels to pass through the canal.

On December 31, the Dispute Adjudication Board, or DAB, the second level of arbitration established to solve contractual disputes, said the consortium was entitled to $233 million of the $463 million it was seeking, as well as a six-month contract extension. The entitlement was justified because the consortium was unable to obtain the basalt needed for the cement that the canal authority said would be available at the commencement of work. The board also stated that the canal authority was at fault for unjustified delays as a result of not giving timely approval for the concrete mix proposed by the consortium.

The construction group is expected to finish work by early next year, with the deeper canal slated to begin operation in the first quarter of 2016.