The president of Panama, José Raúl Mulino, ordered the temporary occupation of two ports operated by the Hong Kong company CK Hutchison Holdings Ltd., after a ruling by the highest court against the firm’s concession, which intensifies a dispute that has become a chapter in the rivalry between the United States and China in Latin America.
Mulino stated in a speech on Monday that The administration and operation of the two ports in the strategic Panama Canal will return to the Panama Maritime Authority to guarantee their uninterrupted, safe and efficient operation. The occupation covers mobile equipment in ports and does not imply a definitive loss of property rights, he explained, adding that the State will return the assets, including the cranes, “when the cause that motivated the occupation ceases.” Panama will pay the corresponding compensation, unless the equipment is sold to a new operator.
Furthermore, recently The Panama Canal reported that interoceanic waterway operations will continue normally and safely after the Court’s ruling.
The Maritime Authority of Panama signed contracts with APM Terminals, a division of AP Moller-Maersk, and with the Swiss MSC Mediterranean Shipping Company, to operate the ports provisionally, Mulino indicated. The government will start an open bidding process and grant concessions to operate the ports to two different companies, he said. The equipment will be assessed to determine next steps.
At the beginning of this month, CK Hutchison warned Maersk of possible legal action if the Nordic company’s terminal unit tried to take over operations in both ports.
CK Hutchison declared on Tuesday that considers Panama’s occupation of the two ports illegal, as well as the previous court ruling. The country “is responsible for the damages caused by the confiscatory actions it has taken,” the company said in an emailed statement.
Its subsidiary Panama Ports Company ceased all operations at the Balboa and Cristóbal terminals on Monday, after Panamanian representatives “arrived without invitation” and informed employees that the concessions granted to the unit no longer existed, according to the statement.
CK Hutchison shares in Hong Kong fell as much as 3.2% on Tuesday. The Hong Kong government lodged a formal protest against Panama over the occupation of ports and promised to firmly support the interests of Hong Kong companies abroad.
In a regular press conference on Tuesday, the spokesperson of the Ministry of Foreign Affairs of China, Mao Ning, He stated that Beijing will save the “legitimate and legal rights and interests” of its companies.
“Unavoidable” restructuring
The conglomerate founded by Hong Kong billionaire Li Ka-shing has resisted Panamanian authorities’ attempt to revoke its right to operate the two ports.. Panama’s latest decision adds new uncertainty to protracted talks over Li’s deal to sell 43 global facilities to a consortium backed by U.S. investment firm BlackRock Inc.
The agreement has become a reflection of the rivalry between the US and China and is one of the most geopolitically complex for the company. Announced in March last year, it could net CK Hutchison more than $19 billion in cash if it comes to fruition. As negotiations drag on, the parties have considered formulas to move forward, including dividing the assets into separate packages with different ownership structures, Bloomberg reported.
To obtain approval from Beijing, CK Hutchison also previously invited state-owned China Cosco Shipping Corp. to join the buying consortium.
Excluding Panama’s ports from the agreement would reduce its scope and value, said Shahla Ali, professor and associate vice dean of the Faculty of Law at the University of Hong Kong and director of the Arbitration and Dispute Resolution Programme.
“To move forward, some type of restructuring is inevitable, whether through price adjustments or greater guarantees”Ali said.
He Panama’s highest court annulled CK Hutchison’s concession to operate the ports in January, a decision celebrated in Washington but that irritated Chinawhich responded by suspending talks about new projects in Panama. The country’s Comptroller General had announced an audit of the concession in January 2025, a week before Donald Trump’s inauguration.
“Although CK Hutchison will continue to express his ‘dissatisfaction’ with the occupation by the Panamanian government, negotiating compensation is likely to be a higher priority,” said Shen Meng, director of Beijing-based investment bank Chanson & Co. “Once freed from geopolitical pressures, CK Hutchison and BlackRock will be more likely to accelerate negotiations for the sale of other port assets.”
