Snapshot: On 17 May 2021, Ecuador filed an arbitration claim against Sinohydro before the International Court of Arbitration of the International Chamber of Commerce. They argued that Sinohydro hid information about significant defects, specifically over 8,000 cracks in the turbine distributors of the Coca Codo Sinclair hydroelectric plant, since 2012. This concealment led to ongoing operational issues and financial losses, prompting Ecuador to seek arbitration for damages. It has been reported that the dam led to regressive erosion of the Coca river.

In June 2025, Ecuador ended the arbitration after reaching a $400m compensation agreement with PowerChina, Sinohydro's state-owned parent company. In exchange, PowerChina will assume operations. The deal was questioned by critics over the appropriateness of granting operation to the company that built the defective dam, while long-term reliability of the dam remained in doubt.