Graciela Dixón, former judge of the Supreme Court of Justice (CSJ) and consultant for the Norberto Odebrecht Construction Company (CNO), assured that the Public Contracting Court ignores the arbitration law and the Political Constitution of Panama in the conflict that exists between the company and the Tocumen International Airport (Aitsa) through terminal 2.

CNO reiterates that it complied with the contract for the expansion of Panama’s Tocumen International Airport (AITSA). The new terminal, which has 116,000 square meters and 20 boarding gates, had a value of $917.9 million. On February 15, 2013, the contract was endorsed by the Comptroller General of the Republic. Since June 2022, the work has been in operation. During the first year, terminal 2 served more than 9 million passengers, according to data from the Aitsa administration.

CNO claims

“After having received the work, after using it, Aitsa decides to dissolve the contract”… claims the former magistrate, in an interview she requested with La Estrella de Panamá to address the issue.

On September 28, 2021, Aitsa published Resolution No. 65.AL.21, through which it administratively terminated the contract due to non-compliance and disqualified the contractor for 3 years. With the decision, the execution of the $229 million performance bond was ordered. Aitsa also sued the construction company for $20 million before the Arbitration and Conciliation Center of Panama.

On October 6, 2021, the construction company also filed an appeal against this resolution so that it would be void. He also demands compensation of $25 million from Aitsa at the Panama Arbitration and Conciliation Center. Because – according to the consulting firm – it is not possible to terminate a contract when it is practically concluded. He explained that only in cases of substantial non-compliance could an administrative resolution be made. This, however, is not the case, he indicated. “These are just details…,” she said.

Delivery of the work

Dixon clarified that in January 2019, for World Youth Day (WYD), the new terminal partially began operations, opening 5 boarding gates. On February 29, 2020, Aitsa received the expansion of Terminal 2, practically completed. The work had occupation permits from the municipal authorities and security, granted by the Benemérito Fire Department of Panama.

By then, the work was 99.9% complete. There were 473 adjustments pending out of a total of 10,547. “Everything that was fundamental for the operation of the airport was delivered and received…” clarified the consultant.

The dispute knocked on the doors of the Public Procurement Court. When Aitsa administratively terminated the contract, Odebrecht appealed the decision to the Public Contracting Tribunal. But, the court rejected the construction company’s objections.

The contractor took the dispute to an arbitration tribunal. Appealing to one of the clauses of the contract, Odebrecht asked the Public Contracting Court to send the dispute to the arbitration jurisdiction. But, according to the lawyer, the court decided not to do so, claiming to have exclusive jurisdiction to handle administrative resolutions of public contracts. “The file is refused to be sent to the arbitration jurisdiction. The administrative court hijacked the controversy,” said Dixon.

In the consultant’s opinion, the arbitration court is the one who has the jurisdiction to resolve this conflict because there is a clause in the contract that establishes it. The arbitral tribunal has continued with the case. It is in the final stretch, in the allegations stage. Then the decision would come, he explained.

The consultant’s complaint is that despite the fact that an arbitration tribunal is settling the case, the administrator continues with the open file. That is to say, there are two processes going on, the administrative and the arbitration. “The danger I see is that a Panamanian entity ignores what is established in the Political Constitution of Panama and in the arbitration law,” says Dixón.

“If for some reason I don’t agree with something, you don’t pay me and I want to sue you, it turns out that I have to go to your court. How confident will I be, as an investor, that justice will be applied to me impartially. That is why these contracts exist that include an arbitration clause,” concludeOdebrecht.d the consultant.

Agreement and debt

On the other hand, the former judge pointed out that the decision to disqualify the construction company conflicts with commitments that the company acquired in the criminal jurisdiction. Odebrecht made an effective collaboration agreement with the Panamanian justice system to identify the participants in a corruption structure that granted bribes to guarantee state contracts.

In 2017, the Public Ministry imposed a fine of $220 million on the company for its participation in this scheme. That sum was to be paid in annual installments of $18 million for a period of 12 years.

That fine – according to the former judge – would be paid considering the company’s ability to pay in the context of its operation and activity in the country. The state “must preserve the operation and functionality” of the company, said the consultant, mentioning one of the clauses of the Public Ministry’s agreement with Odebrecht.

The company has paid $57.2 million. CNO proposes assigning its credits with the State to amortize the fine. The company requested meetings with the Ministry of Economy and Finance, Ministry of Public Works, Ministry of Housing and Comptroller General of the Republic to reach a consensus.