Hong Kong’s CK Hutchison warns of legal action over Panama Canal ports
HONG KONG (AP) — Hong Kong’s CK Hutchison Holdings warned of legal action on Thursday against a Danish logistics and ports group, after the latter was tapped by Panamanian authorities to temporarily take over the operation of two critical ports at both ends of the Panama Canal from the Hong Kong conglomerate.
Panama’s Supreme Court ruled in late January that the concession held by a subsidiary of CK Hutchison to operate the two ports on the Panama Canal was unconstitutional. A subsidiary of Denmark-based A.P. Moller-Maersk would be operating the ports in a transitional phase, Panamanian authorities said earlier, until a new concession can be bid and awarded.
The saga surrounding the two Panama ports is part of a broader rivalry between the U.S. and China, with the Central American country caught in between. After U.S. President Donald Trump alleged last year that China is “running the Panama Canal,” CK Hutchison was expected to sell the two ports to a consortium that includes U.S. investment firm BlackRock. But that had triggered Beijing’s quick intervention, which had then stalled the deal.
The January ruling by Panama’s Supreme Court added further uncertainties to CK Hutchison’s plans to sell the two ports. Last week, the Hong Kong company said that it “strongly disagreed” with the ruling and that it had started arbitration proceedings against Panama.
On Thursday, CK Hutchison said in a statement that it was taking further steps to “protect its rights and interests” at the two Panama ports. It said it had notified A.P. Moller-Maersk that “any steps” the Danish group or its subsidiary takes to operate the two ports without CK Hutchison’s agreement will likely “result in legal recourse.”
Local subsidiary APM Terminals, asked to comment Thursday, said in a brief statement that it was not a party to the legal process involving the ports and had only expressed its willingness to the Panamanian government to temporarily take over operations at the ports “to mitigate the risks that could affect essential services for regional and global trade.”
While Panamanian President José Raúl Mulino had earlier promised after the court decision that the two ports would continue to operate without interruption, the Hong Kong company said Thursday that the continued operation of the two ports “depends solely on actions of the Panama Supreme Court and the Panamanian State,” which it can’t control.
CK Hutchison also said in its statement that it had notified Panama of a dispute “pursuant to an investment protection treaty” to safeguard its rights and interests at the ports, on top of the arbitration procedure that it had taken earlier.
It said it will continue to consider and explore “all available recourse including additional national and international legal proceedings” over the Panama ports.
Panama Ports Co., a subsidiary under CK Hutchison, has operated the two Panama ports since 1997 and was granted a renewal of its concession in 2021 for 25 years.
The Panama Canal itself — a crucial trade passage that links the Atlantic and Pacific – was built by the U.S. in the early 20th century. It was then operated by the U.S. for decades before Washington handed full control of the canal to Panama in 1999.