Panama Seizes Strategic Canal Ports From CK Hutchison After Supreme Court Annulment

Panama has formally taken control of two strategic ports at the entrances of the Panama Canal after its Supreme Court annulled long-standing concession contracts held by Hong Kong-based CK Hutchison.

The move transfers temporary operations of the Balboa and Cristobal terminals to subsidiaries of Maersk and MSC for up to 18 months.

The decision affects two key gateways handling cargo linked to nearly 5% of global maritime trade, escalating tensions amid ongoing U.S.–China rivalry over control of critical shipping routes.

The annulment targets concessions held by Panama Ports Company (PPC), a subsidiary of CK Hutchison Holdings, which has operated the Balboa and Cristobal terminals since 1997.

Panama’s Supreme Court ruled in late January that the original concession law, and a 2021 extension, were unconstitutional. The ruling became legally binding after publication in the official gazette on Monday.

Following the decision, Panama’s government issued a decree authorising the Panama Maritime Authority to assume immediate control of the ports.

The decree covers cranes, vehicles, computer systems, and related operational infrastructure.

PPC confirmed it ceased operations after government officials entered the terminals and warned staff of possible criminal prosecution if they failed to comply.

Under temporary 18-month concession contracts:

APM Terminals, a subsidiary of A.P. Moller-Maersk, will operate the Balboa terminal on the Pacific side.

Terminal Investment Limited, part of Mediterranean Shipping Company, will manage Cristobal on the Atlantic side.

APM Terminals confirmed it has already begun temporary operations at Balboa.

President Jose Raul Mulino stated that the measure does not amount to expropriation. According to the president, the state is ensuring operational continuity while preparing a new competitive concession framework.

CK Hutchison described the ruling, executive decree, and port takeover as unlawful. The company said it is pursuing national and international legal remedies, including arbitration under international investment-protection mechanisms.

It has also warned of potential legal action against third parties operating the terminals without its consent.

The dispute may affect CK Hutchison’s proposed $23 billion global port sale to a consortium led by BlackRock and MSC, which included the Panamanian terminals.

Shares of CK Hutchison fell between 0.9% and 1.9% on Tuesday.

The Balboa and Cristobal ports sit at the Pacific and Atlantic entrances of the Panama Canal, one of the world’s most critical maritime chokepoints.

The canal handles roughly 14,000 vessels annually and carries about 5% of global seaborne trade. The terminals are vital transshipment hubs linking Asia, the Americas, and Europe.

References: Reuters, AP News

Source: Maritime Shipping News