Hong Kong’s CK Hutchison says Panama forcibly removed its staff from key canal ports and threatened criminal prosecution after cancelling its contracts.
HONG KONG/PANAMA CITY: CK Hutchison Holdings Ltd has accused Panamanian authorities of unlawfully seizing control of two strategic ports and threatening its employees with criminal prosecution.
The Hong Kong-based conglomerate said the state’s actions followed a Supreme Court ruling that cancelled its long-held concessions for the Balboa and Cristobal terminals near the Panama Canal.
Panama officially published the court’s decision in its government gazette on Monday, finalising the annulment of contracts held by CK Hutchison’s subsidiary, Panama Ports Company (PPC), for nearly three decades.
READ MORE: Panama court voids HK firm’s port contracts over constitutional breach
The company stated that authorities made a “direct physical entrance” to the ports to remove PPC employees.
Staff were reportedly threatened with prosecution if they defied orders to leave and were instructed not to contact their employer.
“CKH considers the ruling, the executive decree, the purported termination of PPC’s concession, and the takeover of the terminals to be unlawful,” the firm said in a Hong Kong stock exchange filing.
It warned the actions “raise serious risks to the operations, health and safety” at the vital terminals.
CK Hutchison said it is consulting legal counsel on pursuing national and international legal action against Panama.
The ruling is viewed as a strategic win for the United States amid its broader trade rivalry with China.
U.S. President Donald Trump has previously sought to curb Chinese influence over the canal, which handles about 5% of global maritime trade.
In response, the Hong Kong government expressed “strong dissatisfaction and opposition” to Panama’s takeover.
It urged Panamanian authorities to respect contractual agreements and ensure a fair business environment.
The Panama Maritime Authority (AMP) has taken possession of both ports by decree to ensure uninterrupted operations.
This move was confirmed by Alberto Aleman Zubieta, head of the technical team overseeing the transition.
The government has approved temporary 18-month concession contracts for the terminals’ operation.
APM Terminals Panama, a Maersk subsidiary, will operate Balboa port, while TIL Panama, part of MSC, will run Cristobal.
Panamanian President Jose Raul Mulino emphasised the temporary contracts were a “legitimate tool that respects asset ownership.”
“Let me be clear, this does not imply an expropriation of those assets,” Mulino said in a televised address.
He stated the arrangement allows port use until their value is determined for future actions, ensuring neither operations nor employment are affected.
The government plans to develop a new competitive concession framework to award operations in the future.
This development could disrupt CK Hutchison’s proposed USD 23 billion global port sale to a BlackRock and MSC-led consortium.
The company’s Hong Kong-listed shares fell 1.9% on Tuesday, mirroring a broader decline in the Hang Seng Index.
The Sun Malaysia
