Panama’s top court has invalidated a concession allowing Hong Kong’s CK Hutchison to operate ports at both ends of the Panama Canal, following allegations of irregularities in a 25-year contract extension approved in 2021. The decision has prompted a strong reaction from Hong Kong officials and raised broader geopolitical concerns.
Hong Kong Condemns Court Decision
On Friday, Hong Kong’s government expressed “firm rejection” of the ruling, warning that it could harm legitimate business interests and undermine confidence in international trade. Officials criticized what they described as the use of coercive or unreasonable tactics by foreign governments, stressing that Hong Kong enterprises should be protected in global markets.
Geopolitical Tensions Around the Canal
The Panama Supreme Court’s move intersects with US concerns over Chinese influence in the region. While Panama maintains that China has no role in canal operations, the United States has framed port management as a national security issue. Former President Donald Trump even suggested that Panama should return control of the canal to the US, and Secretary of State Marco Rubio made the country his first overseas stop to highlight strategic priorities.
The court did not provide guidance on the immediate future of the ports, leaving uncertainty over operations.
CK Hutchison Faces Legal and Political Hurdles
Panama Ports Company, CK Hutchison’s subsidiary, said it has not yet received official notification of the ruling and emphasized that the concession was the result of a transparent international bidding process. The company warned that the decision threatens both its contract and the livelihoods of thousands of Panamanians who rely on port activity. It confirmed that it intends to pursue legal remedies in Panama or elsewhere.
Complicating the situation, CK Hutchison’s planned sale of its majority stake in the Panamanian ports and other global holdings to a consortium including BlackRock has stalled, reportedly due to objections from Beijing. The company considered bringing a Chinese investor into the deal, highlighting the delicate balance Hong Kong businesses must strike between commercial interests and political expectations, particularly amid strained China-US relations.
