CK Hutchison Holdings Threatens Legal Action Against Panama

In a press release, Hong Kong's CK Hutchison Holdings (CKHH) stated it is reviewing its options after its subsidiary, Panama Ports Company (PPC), was removed as the operator of terminals at the Cristobal and Balboa ports, at each end of the Canal. The Panama Canal is a critical route for merchant and military vessels moving between the Atlantic and Pacific oceans and has become highly politicized, with U.S. President Donald Trump suggesting the U.S. should retake control of the canal, citing China's presence as a security threat. In its unpublished decision, the Supreme Court ruled that CKHH's concession was unconstitutional under Panamanian law. CKHH announced it will continue to consult with legal counsel regarding all available recourse, including national and international legal proceedings against the Republic of Panama and its agents. The company also threatened Maersk with legal action, warning that a forced takeover would cause 'disruption and damage.' The former Chinese operator of the canal's container terminals has threatened legal action after its contracts were voided by the country's Supreme Court. Last year, CKHH announced a consortium, including U.S. firm BlackRock and Mediterranean Shipping Company, would acquire a 90% stake in PPC and an 80% interest in its subsidiaries. CKHH asserted its rights under an investment protection treaty and sought discussions to resolve the dispute. The Panama Maritime Authority then selected Maersk's APM Terminals as the operator of the two ports until a new concession is bid. Approximately 5% of global trade is transported via the canal, with the U.S. being its largest user, vital for American grain and soybean exports to Asia. The Panama Canal was built and administered by the U.S. until 1999, when control was handed over to Panama. The $22.8 billion sale had stalled due to a review by China's market regulator. The company deemed the court's decision unconstitutional and filed for arbitration with the International Chamber of Commerce. It had operated the terminals since 1997.