A major Hong Kong-based conglomerate has launched fresh legal action against the Panamanian government, demanding more than $1.5 billion in damages over the state-led seizure of two key ports positioned at opposite ends of the Panama Canal, a move the company frames as an unlawful asset grab tied to escalating U.S.-China geopolitical tensions.
CK Hutchison, the conglomerate controlled by the family of Hong Kong billionaire Li Ka-shing, announced the new arbitration proceedings in an official statement released Thursday. In the filing, the company accuses the Central American nation of violating a bilateral investment protection agreement through a coordinated “state attack campaign” targeting its long-standing concession to operate the critical ports.
The dispute traces back to February 2024, when Panama’s national Supreme Court ruled that the operating concession held by CK Hutchison’s local subsidiary, Panama Ports Company, was unconstitutional. Shortly after the ruling, Panamanian authorities moved to seize control of Balboa Port, located at the Pacific entrance to the Panama Canal, and Cristobal Port, which sits at the Atlantic opening of the key global trade waterway.
The two ports have been caught in the middle of fraught geopolitical tensions between Washington and Beijing for months, particularly after former U.S. President Donald Trump returned to the White House in 2024 and made unsubstantiated claims that China effectively “controlled” the strategic canal. It should be noted that the Panama Canal itself has been fully owned and managed by the government of Panama since 1999. CK Hutchison’s subsidiary first secured the concession to operate the two end-of-canal ports in 1997, and renewed the agreement for an additional 25-year term in 2021.
This latest legal filing marks the third arbitration action tied to the seizure launched by entities linked to CK Hutchison. Back in March, Panama Ports Company initiated a separate international arbitration proceeding seeking no less than $2 billion in compensation for what it calls the unlawful government takeover, and CK Hutchison confirmed this week that those earlier proceedings are moving forward as scheduled. The company noted that Thursday’s new action focuses on violations of investment treaty rights, a distinct legal claim from the contract rights at the center of the March filing.
The broader dispute is also tied to a stalled large-scale ports deal. In 2023, CK Hutchison unveiled plans to sell its entire global ports portfolio, including the two Panama Canal ports, to a consortium led by U.S. investment giant BlackRock for an initial valuation of $23 billion. The transaction has failed to move forward, however, bogged down by overlapping geopolitical friction between China, the U.S. and Panama, as well as mounting legal challenges to the Panamanian assets. In April of this year, Panama Ports Company launched another arbitration claim against Danish logistics and shipping leader Maersk, which stepped in to take over partial operations at the seized ports after the government takeover. Maersk has publicly stated that it does not believe it holds any legal liability for the claims brought against it.
Following the Panamanian government’s seizure of the ports in February, both Beijing and Hong Kong’s local government issued formal pushback against the move, condemning the asset seizure as unlawful.