A major international arbitration battle has erupted between Panama and Hong Kong-based CK Hutchison Holdings after the Central American nation’s seizure of two strategic ports at the Panama Canal. The conglomerate’s subsidiary, Panama Ports Company, is seeking approximately $2 billion in compensation for what it describes as an “illegal takeover” of the critical maritime facilities.
The dispute stems from Panama’s Supreme Court ruling that declared the company’s concession agreement unconstitutional, prompting the government to assume control of both Balboa and Cristobal ports last week. These facilities occupy strategic positions at either end of the vital Panama Canal waterway, which handles approximately 5% of global maritime trade.
Panama Ports Company had operated the terminals since 1997 and successfully renewed its 25-year concession agreement just two years ago in 2021. The company’s Friday statement emphasized its determination to “assert all of their rights and damages they are due because of the radical breaches and anti-investor conduct of the Panamanian State.”
The situation has drawn international attention, with both Beijing and Hong Kong governments expressing strong objections to Panama’s actions. The ports previously found themselves at the center of geopolitical tensions when former U.S. President Donald Trump accused China of effectively controlling the Panama Canal. The controversy intensified when CK Hutchison announced plans in March 2022 to sell the majority of its global port assets—including the Panama facilities—to a consortium involving U.S. investment giant BlackRock in a monumental $23 billion transaction. That deal has remained stalled amid political pressures.
In a separate declaration, CK Hutchison condemned Panama’s seizure methods, alleging the government occupied the ports and appropriated company property and personnel “without transparency.” The corporation vowed to pursue all available legal avenues through both national and international judicial proceedings. The company also corrected previous statements from Panamanian officials, including Economy Minister Felipe Chapman, who had estimated the compensation claim at $1.5 billion.