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With Hutchison Port Holdings looking set to be on the verge of losing its concession to operate its Panama container terminals, Maersk’s port operating arm APM Terminals today suggested that it could assume temporary operation of the two ports while the legal battle rumbles on.
“APM Terminals confirms its willingness to assume the temporary operation of both terminals,” it said in a statement sent to The Loadstar.
“This aims to mitigate any risks that could impact essential services for regional and global trade and provide support to Panama’s logistics hub.
“APM Terminals emphasize that any operational entry to the terminal will be carried out in full
accordance with all legal requirements and procedures established by the law.
“This can only take place once Panama’s Supreme Court of Justice ruling becomes final and binding, a timeline that is outside the company’s control,” it added.
The country’s Supreme Court of Justice yesterday ruled that the 2021 extension to the concession was “unconstitutional”.
The 1997 concession originally awarded to Panama Ports Co (PPC), in which Hutchison owns a 90% stake, was for a 25-year period. However, following considerable pressure from the US last year, the country’s comptroller general alleged “irregularities” in the extension.
In response to the court ruling, PPC said it had not received formal notification, but claimed it was “inconsistent with the relevant legal framework and the law that approved the contract which has been the basis for PPC’s operations at the ports of Balboa and Cristóbal”.
It added that the country’s government had been targeting its operations for more than a year.
“This is the latest development in a campaign by the Panamanian state impacting PPC and its investor [HPH] over more than a year, including a range of surprise actions targeting the concession and PPC.
“The new ruling, based on available information, lacks legal basis and jeopardizes not only PPC and its contract, but also the well-being and stability of thousands of Panamanian families who depend directly and indirectly on port activity, but also the rule of law and legal certainty in the country.
“The ruling is diametrically opposed to previous decisions issued by the Supreme Court regarding contracts similar to the PPC contract,” PPC added.
Hong Kong’s administrators also weighed in, claiming the ruling undermined Panama’s legal system. A spokesman said: “The HKSAR government strongly opposes any foreign government using coercive, repressive or other unreasonable means in international economic and trade relations to seriously harm the legitimate business interests of Hong Kong enterprises.
“This would also seriously harm the business environment there, undermining investors’ confidence and adversely affecting the bilateral relations and long-term economic development of the two places – given the current situation in Panama, Hong Kong enterprises should carefully review their existing and future investments there,” he added.
At the time of writing there has been no further guidance from Panama’s authorities on the dispute’s next steps, but PPC indicated that it was preparing for further legal action.
“The campaign by the Panamanian state against its own legal and contractual framework, and a diligent concessionaire and investor, continue to undermine the reputation of Panama as a reliable jurisdiction and its position as a globally competitive logistics centre.
“Institutional and legal stability and respect for contracts are fundamental pillars for sustainable development and the rule of law.
“Due to the campaign affecting PPC and its investors, the company and its investors continue to permanently reserve all rights including recourse to national and international legal proceedings,” it said.
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