Panama’s Supreme Court has annulled the legal basis for long-standing port concessions held by Panama Ports Company, a subsidiary of Hong Kong-based CK Hutchison, casting uncertainty over ownership of container terminals at the Panama Canal’s Pacific and Atlantic gateways and complicating a planned $23 billion ports sale.
After “extensive deliberation,” the court found the laws and acts underpinning PPC’s concession for the development, construction, operation and management of terminals at Balboa and Cristobal unconstitutional. PPC has operated the terminals since the 1990s under contracts separate from the Panama Canal Authority’s waterway operations.
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The ruling threatens to disrupt CK Hutchison’s proposed sale of dozens of ports worldwide—including the Balboa and Cristobal terminals—to a consortium led by BlackRock and Mediterranean Shipping Company. The buyers did not immediately respond to requests for comment.
PPC said it had not yet been formally notified of the court’s decision but called the ruling inconsistent with the legal framework and laws that had enabled nearly three decades of operations. The company said it has invested $1.8 billion in infrastructure and technology in Panama across that period.
CK Hutchison’s Hong Kong-listed shares fell 5% on Friday, while the Hang Seng Index slipped 2%. “I would expect near-term weakness in CK Hutchison until such time as they flesh out a new sale structure,” said David Blennerhassett, a strategist at Ballingal Investment Advisors who publishes on Smartkarma. “That new structure could be substantially delayed depending on how they weigh up options on this court decision.”
The decision comes amid intensifying U.S.-China rivalry over strategic trade routes and is seen as a win for Washington. President Donald Trump has pushed to curb Chinese influence over the Panama Canal, which carries about 5% of global maritime trade, and had hailed the proposed divestment—particularly of the Panamanian terminals—as a victory that would move the assets under majority U.S. ownership.
China had threatened to block the transaction, arguing it was not in its national interest, and pressed for state-owned shipping giant COSCO to take a controlling stake in the buyout, according to people familiar with the talks.
CK Hutchison had been awaiting the Supreme Court’s final word after Panama’s attorney general previously determined the contracts unconstitutional. Critics of the deals, which were extended in recent years, argued they disadvantaged the country and needed to be reworked.
The court’s decision could force Panama to overhaul the legal framework governing port concessions and potentially run new tenders for the terminals. Ensuring uninterrupted operations at Balboa and Cristobal is critical for global shipping lines that rely on Panama as a transshipment hub, where containers are transferred between vessels serving multiple routes.
In July, President Jose Raul Mulino said public-private partnerships could assume control of the two ports if the contracts were invalidated. Analysts expect Panama Ports Company to pursue arbitration in response to the ruling.
The fallout now extends beyond Panama’s maritime sector to CK Hutchison’s global portfolio strategy, as it weighs how to salvage or recast the $23 billion sale. Any prolonged uncertainty over the Panamanian assets—central nodes in east-west and north-south trade—could reverberate through deal negotiations and regional logistics planning in the months ahead.
By Abdiwahab Ahmed
Axadle Times international–Monitoring.
