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Dispute involving expansion of Panama Canal resolved

Business disputes occur around the globe on a regular basis. The disputes can arise in a variety of situations including business, real estate and construction. While it is possible that the fallout from such a dispute can be minimal, in other situations it could have far reaching consequences, impacting many other businesses and individuals. A dispute that did just that was recently resolved.

The matter involved the construction project currently underway on the Panama Canal. The canal, which changed the face of shipping when upon its completion the Pacific Ocean and Atlantic Ocean were connected, is in the process of being expanded. Because the cost of this project is running so high over budget, the construction consortium working on the project announced that to avoid suspending construction, the Panama Canal Authority needed to pay a portion of the overruns.

In response to the consortium's demand the canal authority alleged that the consortium was violating contractual obligations. It also indicated that it would look to other builders to complete the project as well as move forward with legal action. The dispute got the attention of countries throughout the world that have an economic stake in the project's success.

Last month the parties reached an agreement that sent the original workers back to the site. Among other things it resulted in the builders being allowed to cancel pending obligations and payments to suppliers. It also provided the consortium with money to cover invoices from December 2013. Those invoices totaled $36.8 million. Other issues surrounding the matter were scheduled to be resolved at a later date.

Depending on what has prompted a business dispute, it is possible that many people will be affected. For example, in this instance, in addition to certain nations needing the project to move forward for economic reasons, individuals residing in the area also have an economic interest in the matter. Prior to reaching an agreement, 10,000 jobs hung in the balance.

The fact that so many parties had something to lose if the dispute was allowed to move forward likely contributed to the resolution of the matter. Lawyers undoubtedly played a big role in that resolution.

Source: The New York Times, "Deal Reached to Resume Expansion of Panama Canal," Raphael Minder, Feb. 20, 2014

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