In the recent arbitration related to the Lock Gates, Labour and Shareholder claims in which the claimants of the Third Set of Locks Design and Construction Contract where Grupo Unidos por el Canal, S.A. (GUPCSA) and its shareholders (other than CUSA) sought to obtain from the Panama Canal Authority an amount of approximately B/.671 million, the Arbitral Tribunal issued in its final award the following:

● rejected all claims related to the construction of the lock gates and the shareholders' claims about the return on investment. These claims amounted to more than US $450m.

● in relation to the four claims associated with increased labour costs, after rejecting two of these claims in their entirety, the Tribunal made a "limited declaration" in respect of one of the claims, indicating that GUPCSA may be entitled to further payment of an amount of up to approximately B/.34 million subject to the pending arbitration granting the claimants an extension of time;

● in any event the claimants shall pay to the Panama Canal Authority (ACP) a net amount of B/.20.6 million in legal costs and expenses

The ACP will continue to pursue all actions it is entitled to in order to defend its interests.

The award is a victory for the ACP: claims of over $500m were rejected and the Claimants have the possibility (but only possibility) to recover further monies limited to $34m only if they are entitled to an extension of time. The ACPs position is that no extension of time is due.

Background

The Claimants have filed five arbitrations against the Panama Canal Authority ("ACP") under the Rules of Arbitration of the International Chamber of Commerce (ICC), based in Miami, United States.

Three of these five arbitrations concluded with arbitral awards in favour of the ACP:

(i) that of the Pacific Temporary Cofferdam in which GUPCSA was denied the amount of B/.194 million and 247 days of extension requested by them.

(ii) the Advances, whereby the Tribunal confirmed that GUPCSA had to immediately repay the overdue Advances that the Panama Canal had granted GUPCSA for the execution of the third set of locks for B/. 847 million plus B/.13 million in interest; and

(iii) the Concrete, Aggregates, Laboratories and Faults award in which the Tribunal ordered GUPCSA to pay the PCA B/. 271.8 million.