27 Feb Panama Port Dispute Escalates
Hong Kong-based conglomerate CK Hutchison Holdings (Hutchison) has announced that it will pursue legal action against the Republic of Panama and potentially Maersk if the company continues to manage two Panama Canal ports without its approval. This move intensifies a growing dispute over the strategic terminals, set against broader frictions between China and the United States.
Panama’s Supreme Court ruled in January that the 1997 concession contract allowing Hutchison to operate the Balboa port on the Pacific side and the Cristóbal port on the Atlantic was unconstitutional. The decision highlighted an imbalance that favoured the company at the expense of the state, creating questions about the future of these facilities at the canal’s entrances.
The Panama Maritime Authority then selected Maersk’s APM Terminals unit as operator until a new concession could be bid, which has resulted in Hutchison exploring its legal options after its Panama Ports Company (PCC) subsidiary was removed as operator of terminals at Cristobal and Balboa ports near the Panama Canal.
Hutchison has filed for arbitration with the International Chamber of Commerce, as it moves to assert its rights under an investment protection treaty. We will share further updates on the situation as they become available.
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