Hong Kong’s CK Hutchison has launched arbitration proceedings against the republic of Panama, escalating a deepening dispute over two key ports at the Panama Canal following a landmark Supreme Court ruling last week that invalidated its long-held concession contracts.
The conglomerate disclosed early Wednesday that its Panamanian subsidiary initiated arbitration under the International Chamber of Commerce (ICC) rules, as provided in its original concession terms. The move comes after Panama’s Supreme Court declared the contracts governing the Balboa and Cristóbal terminals unconstitutional – a decision that potentially upends nearly three decades of operations by the Hong Kong-based group with APM Terminals moving to temporarily take over the running of the two terminals.
“The board strongly disagrees with the determination and corresponding actions in Panama,” CK Hutchison told the Hong Kong Stock Exchange. “The group continues to consult with its legal counsel and reserves all rights, including recourse to additional national and international legal proceedings.”
The ruling has triggered geopolitical ripples. China’s Hong Kong and Macau Affairs Office denounced the verdict as “absurd” and “shameful,” warning on Tuesday that Panama would “pay heavy prices” if it persisted with the decision. Beijing has accused Washington of interference, arguing that Panama “willingly succumbed” to “hegemonic pressure.”
The fallout also clouds CK Hutchison’s $23bn planned sale of its global ports portfolio, which has been top for sale for the past year.
