Hong Kong’s CK Hutchison Seeks US$1.5 Billion From Panama Over Canal Ports
Panama · Business
Key Facts
- —What happened Hong Kong’s CK Hutchison filed international arbitration seeking over US$1.5 billion from Panama over two canal-side ports.
- —How big a jump A subsidiary separately claims at least US$2 billion; Panama’s audit says it under-collected by US$853 million.
- —The real story The dispute pits a corporate takeover claim against Panama’s Supreme Court ruling that the 1997 concession was unconstitutional.
- —The catch The ports themselves keep operating under interim operators; the canal is run by a Panamanian authority, not the claimants.
- —Who it touches Balboa and Cristóbal terminals, now managed by APM Terminals and TIL Panama, with a US$22.8 billion port sale deal stalled.
- —What comes next Arbitration rulings are unlikely for years; Panama plans an open tender once 18-month transitional contracts expire.
Panama’s state auditor says the ports deal short-changed the country. The company says it put in more than US$1.8 billion.
CK Hutchison, the Hong Kong company, has taken Panama to international arbitration over two ports beside the Panama Canal. It filed the case on August 20, 2026.
The company said it wants more than US$1.5 billion for what it called the destruction of its investments. Panama says it simply obeyed its own Supreme Court.
What CK Hutchison Is Claiming
CK Hutchison told the Hong Kong Stock Exchange that Panama breached an investment protection treaty. Its board said measures taken in 2025 and 2026 ended in the loss of its port business.
The filing seeks damages of more than US$1.5 billion. Reuters and Agence France-Presse both reported the figure on the day it was announced.
The company frames the events as a takeover rather than a lawful cancellation. Panama, by contrast, calls the same events the enforcement of a court ruling.
How The Ports Changed Hands
A subsidiary called Panama Ports Company had run Balboa on the Pacific side and Cristóbal on the Atlantic side since 1997. The original deal ran 25 years, and a 2021 resolution extended it by another 25.
On January 29, 2026, the full bench of Panama’s Supreme Court declared the 1997 concession law and the 2021 extension unconstitutional. The ruling was published in the Gaceta Oficial on February 23, 2026, which made it final.
The court wrote that the effect was simply that no concession exists. Panama’s maritime authority took control of the terminals that same week.
Why Panama Says It Owes Nothing
President José Raul Mulino said in early February that the court decision was unique, definitive and final. He added that Panama respects the rule of law and would obey the ruling whatever it contained.
Later that month he described the state’s occupation of port equipment as a legal step, not an expropriation. He also said the two ports would not again be handed to a single operator as a pair.
Panama’s core argument is straightforward. If the underlying law was unconstitutional, then in the government’s view there was never a valid concession to take away.
Two Separate Cases, Not One
It helps to keep the two proceedings apart, because they have different claimants and different legal bases. Panama Ports Company began arbitration on February 3, 2026 under the concession contract and the rules of the International Chamber of Commerce.
That subsidiary said in March that it was seeking at least US$2 billion, and later widened the claim. The parent company’s treaty case, announced on August 20, is the newer and separate one.
The board said the subsidiary will keep pursuing its own distinct rights. In short, Panama now faces two claims running in parallel.
Which Treaty, And Which Forum
The filing did not name the treaty. It said only that Panama had breached an investment protection treaty.
The Financial Times reported that the instrument is understood to be the 1983 United Kingdom-Panama investment treaty. It cited the legal database Jus Mundi, and noted that the parent company is incorporated in the Cayman Islands.
The Money Panama Says It Lost
Anel Flores runs Panama’s Comptroller General, the office that audits public money. He opened an audit of the ports deal in January 2025 and published early results that spring.
The audit concluded that Panama should have received about US$1.337 billion over roughly 24 years but collected only US$483 million. That leaves a gap of some US$853 million.
Flores also said more than US$300 million was owed outright for contract breaches. His office pointed to tax waivers worth around US$349 million and container fees that had not been updated since 2010.
What CK Hutchison Says It Spent
The company rejects the picture of an investor that underpaid. Panama Ports Company has said its investments in the country exceeded US$1.695 billion.
CK Hutchison has put its own total at more than US$1.8 billion across 28 years. It has also argued that attacking a signed legal framework damages Panama’s standing with investors.
No tribunal has ruled on either figure yet. That is what the two arbitrations are for.
Who Runs Balboa And Cristóbal Now
Panama moved quickly to keep cargo flowing after the ruling took effect. An executive decree of February 23, 2026 authorised temporary occupation of cranes, vehicles and systems.
The cabinet then approved two transitional contracts of up to 18 months each. APM Terminals took Balboa and TIL Panama, part of the MSC group, took Cristóbal.
The Comptroller approved the two contracts at US$26.1 million and US$15.8 million. Alberto Aleman Zubieta, a former Panama Canal administrator, was appointed to lead the transition.
The Stalled US$22.8 Billion Ports Sale
In March 2025 the group agreed in principle to sell effective control of 43 ports for an enterprise value of US$22.8 billion. The buyers were a consortium of BlackRock, Global Infrastructure Partners and Terminal Investment Limited, an MSC affiliate.
That deal has not closed. The group reported half-year results on August 13, 2026.
Group finance director Frank Sixt said there was absolutely nothing to report from a transaction point of view. Industry reports say the parties have looked at a reworked deal that leaves out the two Panama terminals.
No final agreement had been announced by mid-August.
Washington, Beijing And The Canal
The dispute sits inside a larger argument about influence over the waterway. In February 2025 United States Secretary of State Marco Rubio told Panama that Washington viewed Chinese-linked control near the canal as unacceptable.
President Donald Trump had claimed that China was running the canal. Panama and the canal authority rejected that, since the waterway itself is run by the Panama Canal Authority.
In April 2025 the two governments signed a security memorandum reviving joint training and rotational access at former US bases. Meanwhile, China’s foreign ministry said in February 2026 that it would firmly safeguard the rights of Chinese companies.
What Happens Next
Arbitration is slow, so a ruling is unlikely for years. Tribunals must first decide whether they have jurisdiction before touching the merits.
Panama says it has hired international lawyers and rejects the idea that it ignored the case. Reuters reported that the economy ministry and presidency did not immediately comment on the August 20 filing.
Panama has also signalled an open tender for long-term port concessions once the interim contracts run out. Until then, the ports keep working while the lawyers argue.
More: Panama news in English, every day from The Rio Times.
How much is CK Hutchison asking Panama to pay?
More than US$1.5 billion in the treaty case announced on August 20, 2026. Its subsidiary Panama Ports Company is separately seeking over US$2 billion under the concession contract.
Why did Panama cancel the port concession?
Panama’s Supreme Court declared the 1997 concession law and its 2021 extension unconstitutional on January 29, 2026. The ruling became final when it was published in the official gazette on February 23, 2026.
Does China control the Panama Canal?
No. The canal is operated by the Panama Canal Authority, a Panamanian body. The dispute concerns two container terminals beside the canal, not the waterway itself.
Are the ports still operating?
Yes. APM Terminals runs Balboa and TIL Panama, part of MSC.
Connected Coverage
Sources: Reuters; Agence France-Presse; Financial Times; Hong Kong Free Press; Presidencia de Panama; Contraloria General de la Republica de Panama.
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This article was produced by The Rio Times’ automated newsroom system. How we use AI · Report an error · Editorial responsibility: Matthias Camenzind, Editor-in-Chief