Hong Kong-based conglomerate CK Hutchison Holdings has initiated international arbitration proceedings against Panama following a controversial Supreme Court decision that invalidated its subsidiary’s concession to operate ports along the vital Panama Canal. The legal escalation marks a significant deterioration in diplomatic relations and highlights growing geopolitical tensions in the region.
The dispute centers on Panama Ports Company, a Hutchison subsidiary that has managed terminal operations at both Atlantic and Pacific entrances to the strategic waterway since 1997. Last week’s Panamanian court ruling, which declared the operating concession unconstitutional, has drawn fierce condemnation from Chinese authorities who warned of substantial political and economic consequences should Panama maintain its position.
China’s Hong Kong Affairs Office issued a strongly-worded statement via WeChat, characterizing the judicial decision as “legally groundless and ridiculous” while accusing Panamanian authorities of capitulating to “hegemonic powers”—an apparent reference to United States influence. The statement emphasized China’s “sufficient means and tools” to protect its interests within the international economic order.
The arbitration proceedings, filed under the rules of the International Chamber of Commerce’s Paris-based International Court of Arbitration, introduce new complexity to Hutchison’s pending $4 billion port asset sale to a consortium including BlackRock’s Global Infrastructure Partners. The transaction has already faced scrutiny from Chinese anti-monopoly regulators amid worsening US-China relations.
Panamanian President Laurentino Cortizo has sought to reassure citizens regarding uninterrupted port operations, while US officials including Senator Marco Rubio have characterized port management as a national security concern. The situation places CK Hutchison—controlled by Hong Kong billionaire Li Ka-shing’s family—in a delicate position between Beijing’s expectations and Western geopolitical interests.