Panama Supreme Court Cancels Hong Kong Firm's Canal Port Contracts
Panama's Supreme Court has delivered a landmark ruling, declaring the concession held by a subsidiary of Hong Kong-based CK Hutchison for ports at the Panama Canal unconstitutional. The decision, handed down on Thursday, represents a significant victory for US foreign policy objectives aimed at curtailing Chinese influence over the strategic maritime corridor.
Government Assures Uninterrupted Canal Operations
President José Raúl Mulino moved swiftly to reassure the international community, stating in a recorded video address on Friday that the vital waterway would continue to function normally. "Panama moves forward, its ports will continue operating without interruption and we will continue serving the world as the logistics centre of excellence that we are," Mulino affirmed.
He detailed that maritime officials would collaborate with the current operator, Panama Ports Company (PPC), a CK Hutchison subsidiary, until the court's ruling is formally executed. Following this, a transitional phase will see AP Moller-Maersk, a Danish logistics giant, temporarily manage the ports until a new long-term concession can be awarded through a fresh bidding process.
Ruling Follows Audit and Advances US Strategic Aims
The court's decision was precipitated by an audit conducted by Panama's comptroller, which alleged irregularities in the 25-year extension of the concession granted to PPC in 2021. This legal development aligns closely with longstanding US efforts to block Chinese strategic influence in the hemisphere.
The Trump administration had explicitly prioritised this objective, with Panama notably serving as the first overseas destination for US Secretary of State Marco Rubio. Despite consistent denials from Panamanian authorities and the canal administration regarding any Chinese control, Washington has persistently framed the operation of these critical ports as a matter of US national security. Former President Donald Trump has previously gone as far as to suggest Panama should return the canal to American control.
Company and Beijing Issue Strong Rebukes
The ruling prompted immediate and forceful responses from both the affected company and the Chinese government. PPC stated it had not received official notification of the decision and defended its concession as the product of a transparent international tender. In a strongly-worded statement, the company argued the ruling lacked a "legal basis and jeopardises not only PPC and its contract, but also the wellbeing 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." PPC reserved all rights to pursue legal action in Panama and other jurisdictions.
The Hong Kong government firmly rejected the court's action, expressing strong opposition to "any foreign government using coercive, repressive or other unreasonable means to seriously harm the business interests of Hong Kong enterprises." It urged the Panamanian government to respect contractual agreements and ensure a fair business environment, advising Hong Kong firms to carefully review their investments in Panama.
In Beijing, Foreign Ministry spokesperson Guo Jiakun stated that China would take all necessary measures to protect the legitimate rights of "the Chinese company," though no specific actions were detailed. The court's brief statement provided no further guidance on the subsequent steps or timeline for the ports' management, leaving significant operational and legal questions unanswered for the future of this crucial global trade artery.
