Beijing counters Panama’s port takeover

In late January, Panama’s Supreme Court annulled CK Hutchison’s contracts to run the Cristobal and Balboa terminals on either sides of the country’s terminals, facilities the Hong Kong conglomerate has run since 1997.     To the north, since returning to power last year, US president Donald Trump has made no secret of his ambition to see Panamanian maritime infrastructure become more aligned with American interests.      The Supreme Court ruling six weeks ago immediately provoked diplomatic and commercial ripples. Beijing warned of “heavy prices” and reportedly ordered state firms to pause new Panama projects, while Chinese customs stepped up inspections of Panamanian imports. 

An opinion piece published in state-run China Daily last month argued the Supreme Court decision was “a textbook case of how external pressure can corrupt judicial independence and undermine the foundations of international investment”.

Earlier this week, officials from MSC and Maersk were called into the Ministry of Transport, while Panamanian newspaper La Prensa is now reporting that China’s state-run shipping giant COSCO has ceased all calls at Balboa. Vessel tracking services show no COSCO ships – or vessels belonging to its subsidiaries – at the port today. 

For its part, CK Hutchison’s Panama Ports Company (PPC) has launched international arbitration seeking at least $2bn in damages.

In a statement filed March 6, PPC said it has formally submitted claims under the ICC arbitration rules, accusing Panama of an “illegal national takeover,” “egregious breaches” of contract and “manifestly anti‑investor conduct.” The company warned it “will not give ground” and “will not accept symbolic compensation,” saying it will pursue “all rights and damages to which it is entitled.” PPC also said it is pursuing parallel local remedies and has asked Panamanian authorities to return documents and materials it says were unlawfully seized during the takeover.