Panama’s Legal Dispute with Hong Kong Firm Over Canal Ports
PANAMA CITY (AP) — On Thursday, Panamanian President José Raúl Mulino expressed his hope that the current legal conflict with a Hong Kong company regarding Panama Canal port operations would remain contained. However, he emphasized that Panama would stand firm in its decision against the firm.
During a morning press briefing, Mulino declared, “Panama is a dignified country and will not allow itself to be threatened by any country on earth,” in response to criticisms from the Chinese government.
The situation developed after Panama’s Supreme Court recently ruled that a concession held by a subsidiary of Hong Kong’s CK Hutchison Holdings within the Panama Canal was unconstitutional. This ruling has been interpreted as a triumph for President Donald Trump, who is actively working to curtail Chinese influence over the strategically significant waterway. The decision has therefore placed Panama at the center of a geopolitical contest between the U.S. and China.
China has issued a warning that Panama will face “a heavy price” should the ruling be sustained.
CK Hutchison Holdings from Hong Kong has expressed strong disagreement with the court’s decision. In response, its subsidiary has commenced arbitration proceedings against Panama, announced on Wednesday.
Until the Supreme Court’s ruling is enforced, President Mulino mentioned that Panama’s Maritime Authority will collaborate with Panama Ports Company, a subsidiary of CK Hutchison, to ensure continuous port operations.
Mulino also noted that once the concession is officially terminated, the ports will be operated by a local branch of the Danish logistics firm A.P. Moller-Maersk during a transitional phase until a new concession is bid and awarded.
The two ports in Panama are part of a $23 billion sale involving CK Hutchison’s 43 global ports to a consortium that includes U.S. investment firm BlackRock. The transaction, initially announced in March, is currently delayed due to the Panama court case and increased geopolitical tensions between the U.S. and China.
Analysts suggest that the Hong Kong conglomerate may utilize legal strategies, such as the recent arbitration initiation, to extend the timeframe while exploring other options for the extensive port deal.
