Panama’s Supreme Court has annulled a long-term concession that allowed Hong Kong-based CK Hutchison to operate ports at both ends of the Panama Canal. The ruling comes after an audit by Panama’s comptroller flagged alleged irregularities in the 25-year extension granted in 2021, setting off a wave of international reactions.
Hong Kong Condemns the Decision
On Friday, Hong Kong’s government released a statement saying it “firmly rejects” the court ruling. Officials criticized what they called coercive or unreasonable actions by foreign governments that threaten legitimate business interests. The government warned that the decision could undermine investor confidence and disrupt trade relations affecting Hong Kong enterprises worldwide.
Strategic Waterway Under Scrutiny
The court’s decision intersects with broader geopolitical concerns. The United States has long sought to limit Chinese influence over the Panama Canal, viewing port operations as a matter of national security. Former President Donald Trump even suggested Panama should return control of the canal to the US. Panama’s government and canal authorities have consistently maintained that China has no influence, yet the ruling comes amid ongoing US scrutiny and visits by officials, including Secretary of State Marco Rubio.
The court provided no guidance on what will happen next to the ports, leaving the future of operations uncertain.
CK Hutchison Faces Legal and Political Challenges
Panama Ports Company, the CK Hutchison subsidiary operating the ports, said it had not yet been formally notified of the decision. The company defended its concession as the result of a transparent international bidding process and called the ruling legally unfounded. It warned that the decision threatens the livelihoods of thousands of Panamanians who rely on port activity and undermines the country’s rule of law. The company said it reserves the right to pursue legal remedies in Panama or elsewhere.
The controversy is further complicated by a stalled sale announced last year, in which CK Hutchison planned to sell its majority stake in the Panamanian ports and other global holdings to a consortium including BlackRock. Objections from Beijing reportedly slowed the deal, and the company considered bringing in a Chinese investor to appease authorities. The episode highlights the delicate balancing act Hong Kong businesses face between international operations and Beijing’s political expectations, particularly amid tense China-US relations.
