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Request for Reconsideration of Decision Concerning Panama Canal Commission

B-197052 Feb 04, 1981
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Highlights

Reconsideration was requested of a GAO decision which held that the Panama Canal Commission's authority to settle claims against the Panama Canal Company, arising before October 1, 1979, for damage to vessels and for other torts occurring while the vessels were outside the locks but within the Panama Canal waterways, but on which no suit was filed before that date, was subject to the monetary limitations set forth in the Panama Canal Act of 1979. The Commission agreed that it would be fully liable on pre-existing claims against the Company by virtue of the so-called general saving statute, which provides that repeal of a statute does not extinguish any liability incurred under the statute and that the repealed statute shall be treated as remaining in force for the purpose of sustaining an action for enforcement of the liability. The Commission took issue with the GAO conclusion that the Commission's legal authority to settle and pay such surviving claims against the Company was limited by the provisions of the Panama Canal Act which limit its authority to settle and pay the same kinds of claims against itself, that is, for torts involving damage to vessels in the waterways, but which arose on or after October l, 1979. Under the new law, the Commission can settle claims for vessel damage outside the locks only up to $120,000. Other claims can be settled by the Commission only if they are for $50,000 or less. The Commission argued that, to give full effect to the general saving statute, not only should the Company's liability be regarded as preserved, but also its authority to settle and adjust claims arising from that liability. Court action for damages on claims for property damage or loss and personal injury or death occurring outside the Canal Locks was precluded by the new law, while the Company was previously subject to suit for such claims. While it was not clear from the statute, GAO recognized that there was a sufficient legal basis to hold that the Commission could settle and pay tort claims against the Company arising before October 1, 1979, without regard to the monetary limits on its authority to settle the same type of claims arising thereafter. The GAO decision was modified accordingly.

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