CK Hutchison Escalates Legal Battle Over Panama Ports Ruling

At the center of the dispute is a ruling by Panama’s Supreme Court that Law No. 5 of January 16, 1997, which is the legal foundation for CK Hutchison’s nearly three decades operating the Balboa and Cristobal container terminals, is unconstitutional. While the decision has not yet been published or entered into force, the Panamanian government has already begun advancing plans for a forced exit of Panama Ports Company (PPC), CK Hutchison’s indirect subsidiary, with no clear transition framework in place.

Hong Kong–based CK Hutchison warned that publication of the ruling would immediately render operations at both terminals illegal, making continued operations impossible. The company said the fate of the ports now rests entirely with the Panama Supreme Court and the Panamanian state—factors it says are wholly outside its control.

Warning Shot at Maersk

In a notable escalation, Hutchison Port Holdings Limited notified A.P. Moller-Maersk A/S on February 10 that any attempt by APM Terminals or its affiliates to assume control of the ports without CK Hutchison’s consent would result in damages claims and legal action.

The warning follows a January 30 announcement by Panama’s Maritime Authority that it would rely on APM Terminals as a temporary administrator during a transition period. APM Terminals subsequently said it was “willing” to take on the role, with the aim of mitigate “any risks that could impact essential services for regional and global trade.”

“APM Terminals emphasize that any operational entry to the terminal will be carried out in full accordance with all legal requirements and procedures established by the law. This can only take place once Panama’s Supreme Court of Justice ruling becomes final and binding, a timeline that is outside the company’s control,” APM Terminals said.

CK Hutchison also cautioned third parties against participating in, or benefiting from, what it described as unlawful actions related to the operation of the terminals.

Hong Kong Lodges Formal Protest

The dispute has now pulled Hong Kong directly into the fray. On February 9, Commerce and Economic Development Secretary Algernon Yau lodged a formal protest with Panama’s consul general, warning that the ruling would “seriously undermine international trade rules.”

“We strongly disagree with and oppose the judgment regarding the unconstitutionality of the two contracts for the continued operation of the two ports between the Panama government and CK Hutchison,” Yau said in a statement cited by Hong Kong’s Commerce and Economic Development Bureau. He urged Panama to respect contractual obligations and provide a fair and predictable business environment.

China Warns of ‘Heavy Prices’

Beijing had previously labeled the ruling “absurd,” “shameful,” and “pathetic,” and warned that Panama would face “heavy prices both politically and economically” if authorities pressed ahead.

Foreign Ministry spokesperson Guo Jiakun said China would take “all necessary measures” to defend the rights and interests of Chinese enterprises, adding that Beijing has “sufficient means and tools” to protect what it called a fair international economic and trade order.

China—one of the largest users of the Panama Canal—has reportedly instructed state-owned companies to halt talks on new projects in Panama as part of broader retaliation.

Washington Sees Strategic Win

In Washington, the court ruling was widely framed as a victory amid intensifying U.S.–China competition over global trade routes. President Donald Trump has repeatedly called for curbing Chinese influence around the canal, which carries roughly 5% of global maritime trade.

John Moolenaar, chair of the U.S. House Select Committee on China, described the ruling as a “win for America,” arguing that ports along the canal should be operated by companies aligned with U.S. values.

Arbitration and Investment at Risk

PPC said it has invested approximately $1.8 billion in infrastructure and technology during its nearly 30 years operating the Panamanian terminals and has reserved the right to pursue both domestic and international legal remedies. CK Hutchison confirmed that PPC initiated arbitration on February 3 under the terms of the concession agreement.

The company said it remains committed to protecting employees, avoiding disruptions, and maintaining the flow of vessels and cargo through the canal—provided legal conditions allow operations to continue.

Fallout for Global Port Deal

The ruling also threatens to complicate CK Hutchison’s proposed $23 billion sale of 43 ports across 23 countries to a consortium led by BlackRock and Mediterranean Shipping Company. The deal’s timeline remains uncertain, with unresolved issues including China Cosco Shipping Corp.’s reported push for a majority stake.

With Panama positioned as a critical transshipment hub linking multiple trade routes, shipping lines are watching closely. Any prolonged disruption at Balboa or Cristobal could ripple quickly through regional and global container networks.