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Port of Balboa. Photo: Dreamstime.com
Panama Ports Company (PPC) majority owner CK Hutchison announced today it was taking legal action over Panama’s decision to rescind its operating concession covering the ports of Balboa and Cristobal.
Last week, Panama’s Supreme Court of Justice ruled the 2021 extension to PPC’s operating concession “unconstitutional”.
The 1997 concession awarded to PPC, in which Hutchison owns a 90% stake, was for a 25-year period. However, following considerable pressure from the US last year, an official audit of the contract resulted in the country’s comptroller general alleging “irregularities” in the extension.
In statement to the Hong Kong Stock Exchange, CK Hutchison said it had been advised the decision was likely to become effective in the early part of February, and said it had launched arbitration proceedings against the Panamanian government.
“PPC has been advised that the decision announced by the Supreme Court of Justice of Panama, and corresponding actions taken by the Panamanian state relating to the operations of PPC’s terminals at the two ports, are inconsistent with the relevant legal framework and the law that approved the concession contract.
“On 3 February 2026, PPC commenced, and will pursue vigorously, arbitration proceedings against the republic of Panama, pursuant to the applicable concession contract and the rules of arbitration of the International Chamber of Commerce.
“The board strongly disagrees with the determination and corresponding actions in Panama. The group continues to consult with its legal counsel and reserves all rights, including recourse to additional national and international legal proceedings in the matter,” the statement said.
Since annulling PPC’s concession, Panama’s maritime authority opted to appoint Maersk’s port arm, APM Terminals, to operate the container terminals at Balboa and Cristobal on a temporary basis once the annulment has been formally confirmed by the Supreme Court.
It said: “APM Terminals is among the world’s most trusted port operators, making it a suitable choice to assume this responsibility.”
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