The dispute over the management of the Panama Canal is intensifying. The Hong Kong-based company CK Hutchison has announced it has initiated an international arbitration procedure against the Panamanian government, in response to the Supreme Court ruling of last January 29.
As is known, in that ruling the Supreme Court of Panama declared unconstitutional the legal framework that allowed the Panama Ports Company (PPC), controlled by the Hong Kong giant CK Hutchison, to manage the ports of Balboa and Cristóbal, effectively nullifying the state concessions granted in 1997 in favor of the Chinese conglomerate.
The provision has drawn strong criticism from China, which has accused Panama of yielding to hegemonic pressure from the United States of America. For its part, CK Hutchison has stated that it will continue to consult with its lawyers, also reserving the possibility of pursuing further legal actions in appropriate national and international forums.
To avoid disruptions in traffic flows, the Panamanian government has meanwhile temporarily entrusted the management of the two ports to APM Terminals, part of the Maersk group.
The new legal dispute also casts heavy shadows on the $23 billion sale procedure of CK Hutchison’s global port portfolio, which has been on the market since last year.
If the international arbitration against Panama were to fail, CK Hutchison could be forced to sell off its assets or withdraw the offer, marking a historic precedent in the decline of Hong Kong’s commercial influence on global shipping routes.
