An ICSID tribunal has dismissed all claims brought by Banesco against Panama under the Spain-Panama bilateral investment treaty. The dispute arose out of thirty-five public works infrastructure projects in Panama for which Banesco Seguros S.A., a Panamanian operating entity wholly owned by local holding company Banesco (Panamá) S.A. and indirectly controlled by Spanish parent entity Banesco Holding Latinoamérica, S.A. (BHL), had issued advance payment bonds and performance bonds between 2014 and 2017. Following extensive defaults and abandonments by the underlying construction contractors, various Panamanian administrative entities initiated contract termination proceedings and subsequently sought execution of the respective bonds. The Claimants commenced ICSID arbitration alleging that the State's delayed, procedurally irregular, and unnotified execution of expired bonds constituted an arbitrary composite act in breach of the fair and equitable treatment standard under Article IV of the Bilateral Investment Treaty, claiming damages in the amount of USD 13,568,317 across a total bonded portfolio of approximately USD 45.6 million (paras. 1-14, 47-86). Addressing preliminary jurisdictional objections, the Tribunal upheld Panama's objection ratione personae regarding Banesco Panamá, holding that a local company cannot qualify as a foreign investor under Article 25(2)(b) of the ICSID Convention absent an express treaty agreement treating local entities under foreign control as foreign nationals, which Article I(2) of the Treaty did not supply. However, the Tribunal rejected Panama's objections ratione materiae and ratione voluntatis with respect to BHL. It determined that the claims genuinely concerned the sovereign exercise of administrative powers rather than pure contractual issues, that the pre-arbitral notification requirements did not demand piecemeal negotiation of each subsequent administrative measure in an alleged unified course of conduct, and that prior domestic administrative and contentious-administrative proceedings initiated by Banesco Seguros did not trigger the Treaty's electa una via provision under Article XII(2) because the international claims were based on independent international treaty obligations (paras. 90-250). On the merits, BHL structured its case around the doctrine of a composite act pursuant to Article 15 of the International Law Commission (ILC) Articles on State Responsibility, asserting that prolonged administrative inaction, late execution of expired bonds, systematic failures to provide thirty-day notices, and omissions to obtain bond extensions under the Civil Code cumulatively violated the fair and equitable treatment standard. Evaluating the domestic statutory framework (Law 22 of 2006 as amended by Law 48 of 2011), the Tribunal found that the legal rules governing bond duration and expiration following contractor default were characterized by genuine ambiguity. Because the administrative entities acted pursuant to a plausible and legally defensible interpretation of domestic legislation—an interpretation subsequently endorsed by the Panamanian Supreme Court of Justice in 2023 and 2024—the State's conduct could not be deemed arbitrary, irrational, or abusive under international law (paras. 251-541). The Tribunal further rejected BHL's claims regarding due process and legitimate expectations. It held that an ambiguous statutory framework cannot generate objective, protected expectations that a particular favorable interpretation will prevail, and observed that Banesco was not denied due process, having actively pursued and accessed domestic administrative and judicial remedies. In addition, the Tribunal concluded that the Claimants failed to prove the existence of an actionable composite act under Article 15 of the ILC Articles, as there was no evidence of a coordinated plan, common illicit purpose, or centralized governmental directive across the distinct procuring agencies. The observed administrative delays reflected decentralized administrative friction rather than an orchestrated campaign against the investor (paras. 542-598). In the operative award, the Tribunal dismissed all substantive claims on the merits (para. 635). In allocating costs pursuant to ICSID Arbitration Rule 52, the Tribunal ordered the parties to bear the costs of the arbitration equally, directed the Claimants to bear their own legal expenses, and ordered the Claimants to pay USD 900,000 toward Panama's legal defense costs, representing approximately 42.8% of the Respondent's incurred legal representation fees (paras. 600-635).