International Litigation Against Panama Over Hydroelectricity Station

The Center for Settlement of Investment Disputes has started arbitration proceedings in which Panama could end up paying up to $2.5 billion.

Friday, October 18, 2013

Months ago the U.S. company Transglobal Green Energy (TGGE), called on the Panamanian government to reach an agreement on the cancellation of an award for a hydroelectricity plant which was subsequently awarded to Grupo Ideal owned by Carlos Slim, however, lack of action by the authorities led the company to take further action.

The Center for Settlement of Investment Disputes (CIADI) notified the Panamanian Government that it had received a complaint from TGEE "based on a bilateral treaty that makes differences between countries and companies with U.S. capital fall into the category of an matter between two states (Panama and the United States in this case)", reported Laestrella.com.pa.

"We are here in the defense of Panamanian justice and the reaction of the current government has brought us to the point where we are today," said Rick Reyes, executive of TGGE.

The Panamanian government never paid any attention to the ruling of the Supreme Court and instead ordered the rescue of the award so that Grupo Ideal could maintain control. The company benefits from a business which has generated about $50 million without interruption since 2007.

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