The Spanish company Banesco Holding Latinoamérica and the Panamanian company Banesco have filed an arbitration against Panama concerning Panamanian government decisions related to bonds for public contracts. Translation provided by JIGGSLAW®.
The Secretary General of the International Centre for Settlement of Investment Disputes (ICSID) filed the Request for Arbitration on September 8, 2023. Claimants claim a breach of the Panama-Spain Bilateral Investment Treaty, and the proceeding will be administered under the ICSID Convention Arbitration Rules.
The conflict arises from insurance and reinsurance companies’ execution of out-of-time contract bonds for contracts that have already gone unsubscribed. This publication has already covered the situation that was occurring in the Panamanian insurance market in May 2023. (“Panamá: El sector de los Seguros se prepara para posibles arbitrajes”, 04.05.2023).
Claimants are represented by Clifford Chance Madrid.
The concerns of the Panamanian insurance market.
The Panama Insurance Companies Association (known as APADEA) requested the Republic’s Presidency, The Economic and Finance Ministry, the Housing and Urban Regulation Ministry, The Office for Budget Responsibility, the Panama Insurance and Reinsurance Watchdog or the National Council for Sustainable Development ( Known as CONADES) to abide by the law.
For the past few months, APADEA condemned the out-of-time execution of performance and advance payment bonds that have expired years ago, the requirement of bond contracts with timeless duration; or practises that contravene the due process while collecting coactive bonds without notice of claim.
APADEA expressed its concerns about Decree No. 33-LEG, by which the Office for Budget regulated the bonds that guarantee State’s contractual obligations.
