An arbitration panel has ruled in the longstanding battle over the World Trade Center development between the Port Authority of New York and New Jersey and private developer Larry Silverstein.

The three-person panel ruled in the Port Authority's favor on two key points. But rather than imposing an agreement on the two sides, it sent them back to the negotiating table.

The panel denied Silverstein's request for rent abatements and ruled that the Port Authority of New York and New Jersey was not in "material breach" of its contract, according to a partial copy of the decision obtained by The Wall Street Journal. The parties have 45 days to agree on a new construction timetable and resolve funding shortfalls. If not, the panel will be able to impose penalties or its own rebuilding schedule.

Wall Street Journal