Hong Kong’s richest man Li Ka-shing’s company seeks $1.5B from Panama over port takeover

Holding a net worth of nearly $50 billion, Hong Kong's wealthiest individual Li Ka-shing's corporation is pursuing a $1.5 billion claim against Panama for the seizure of its ports. The conglomerate contends that Panama violated an investment protection agreement in the aftermath of a series of actions over two years, culminating in the destruction of the concession contract for the ports of Balboa and Cristóbal and the takeover of the port terminals.

The company's statement asserts that Panama has now become a risky jurisdiction that disregards the rule of law, contract terms, arbitration agreements, treaty rights, and dispute resolution. This claim is distinct from a separate contractual arbitration initiated by the company's subsidiary, Panama Ports Company, which seeks at least HKD15.6 billion in damages due to an alleged unlawful takeover.

CK Hutchison, the conglomerate's representative, notified Panama of the treaty dispute on February 4 following a year-long state campaign against its assets, but negotiations to resolve the issue have not been successful. In January, Panama's Supreme Court ruled that the concession granting PPC the right to operate the ports was unconstitutional, invalidating the contract.

The government subsequently took control of the terminals on February 23. CK Hutchison claims that the forced termination of operations at the two key Panama Canal ports resulted in a 1% decrease in overall throughput in the first half of the year, despite its broader port portfolio outperforming from the previous year. This dispute follows CK Hutchison's failed attempt last year to sell 43 ports in 23 countries in a $22.8 billion deal, sparking a geopolitical conflict between the United States and China over control of global trade infrastructure.

Sandra Marco Colino, a law professor at the Chinese University of Hong Kong, explains that CK Hutchison's latest claim is an investor-state dispute settlement claim based on public international law, marking a shift from a private concession battle to a dispute involving international diplomacy and state liability.