Panama Ports Company Seeks $2 Billion Compensation Over Port Seizure
A Hong Kong-based company’s subsidiary, Panama Ports Company, has initiated international arbitration proceedings, demanding $2 billion in damages from Panama. This comes after Panama’s government took control of two key ports along the Panama Canal, a move deemed “illegal” by the company.
The ports in question, Balboa and Cristobal, were seized last week following a ruling by Panama’s Supreme Court, which found the concession allowing Panama Ports Company to operate these ports unconstitutional. The company, a unit of CK Hutchison Holdings, had been managing the ports since 1997, with a concession recently renewed in 2021 for an additional 25 years.
In response to the takeover, both the Beijing and Hong Kong governments have criticized Panama’s actions. The issue gained further attention after former U.S. President Donald Trump accused China of controlling the Panama Canal in early 2022.
Last year, CK Hutchison had announced a $23 billion deal to sell a majority of its global port assets, including the Panamanian ports, to a consortium involving U.S. investment firm BlackRock. However, Beijing’s opposition has stalled the deal.
CK Hutchison and Panama Ports Company issued a statement indicating their intent to pursue all available legal avenues, stating, “they will assert all of their rights and damages they are due because of the radical breaches and anti-investor conduct of the Panamanian State.”
The company also disputed the compensation amount previously reported by Panama’s Economy Minister, Felipe Chapman, who had mentioned a $1.5 billion figure.
Additionally, CK Hutchison accused the Panamanian State of occupying the ports and seizing property and personnel belonging to Panama Ports Company “without transparency.” The firm has expressed plans to continue seeking “recourse to available national and international legal proceedings” concerning the matter.
