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Court ruling invalidates port operations
Panama's highest court has struck down contracts permitting a Hong Kong-based conglomerate to manage two key container terminals along the Panama Canal, citing constitutional violations.
Background to the dispute
CK Hutchison Holdings, controlled by Hong Kong billionaire Li Ka-shing, has run the ports of Balboa and Cristóbal since the late 1990s through its local unit, Panama Ports Company (PPC). Last year the group agreed to sell the assets to a consortium fronted by US investment giant BlackRock and shipping line MSC for $22.8 billion.
The Supreme Court announced Thursday that the enabling legislation behind the concession agreements was unconstitutional, effectively nullifying PPC's operating rights.
Reactions and fallout
PPC condemned the decision as legally groundless, warning it "threatens the livelihoods of thousands of Panamanian families tied to port activities." The company said it had poured $1.8 billion into infrastructure and technology since 1997.
Panamanian President José Raúl Mulino assured the public that port services would continue uninterrupted. Danish shipping firm Maersk's local subsidiary, APM Terminals Panama, will temporarily oversee the two sites to "minimize risks to regional and global trade," the company told the BBC.
International responses
China's foreign ministry spokesman Guo Jiakun vowed Friday to "take all necessary steps to protect the lawful rights of Chinese enterprises." Hong Kong's government also rejected the ruling.
Markets reacted swiftly: CK Hutchison shares dropped 4.6 % in Hong Kong trading, dragging the Hang Seng Index down more than 2 % and signaling investor unease over rising political risks.
Geopolitical context
The decision arrives amid heightened US-China competition over global trade routes. Former US President Donald Trump repeatedly claimed China was "operating the Panama Canal," an assertion Panama has firmly denied. In January 2025 Trump declared, "We gave it to Panama and we're taking it back."
US Secretary of State Marco Rubio later demanded Panama curb what he termed Chinese "influence and control" over the waterway. Panama maintains the canal remains under its sovereign authority.
Although Chinese firms hold no operational control, China accounted for 21.4 % of cargo volume transiting the canal between October 2023 and September 2024, second only to the United States.
What comes next
The court's verdict may derail CK Hutchison's planned $22.8 billion divestment to BlackRock and MSC. Neither firm has commented on whether the deal remains viable.
The Panama Canal Authority, a government agency, continues to manage the 51-mile (82 km) waterway, which handles roughly 5 % of worldwide maritime trade and serves up to 14,000 vessels annually.
