CK Hutchison seeks over US$1.5bil from Panama over port takeover

Hong Kong-based CK Hutchison has initiated international arbitration proceedings against Panama in the wake of the cancellation of a concession allowing the company to operate two ports within the Panama Canal. The dispute arises from a January 2020 Supreme Court ruling in Panama that invalidated the contract enabling CK Hutchison's Panama Ports Company (PPC) to manage the Pacific port of Balboa and the Atlantic port at Cristobal.

The decision was made following claims made by then-US President Donald Trump that China effectively controlled the Panama Canal, contributing to heightened tensions between Washington and Beijing.

In a filing to the Hong Kong Stock Exchange, CK Hutchison disclosed its intention to seek damages exceeding US$1.5 billion, stemming from the destruction of its investments in Panama. The company's board of directors firmly opposes Panama's actions, which it deems a breach of an investment protection treaty. The firm remains committed to resolving the matter with Panama and fully exercising its rights and remedies under the treaty and international law.

Previously, in February, the subsidiary Panama Ports Company had filed a lawsuit challenging the suspension of its operations at the Panama Canal. The company later announced it was seeking at least US$2 billion in damages. Despite the ongoing dispute, the board stated that the PPC would pursue its unique rights under a separate arbitration process.