HONG KONG : CK Hutchison Holdings has initiated international arbitration proceedings against Panama in which it claims more than 1.5 billion dollars (about 1.29 billion euros) for the loss of its investments in the Balboa and Cristóbal ports, located at the Pacific and Atlantic entrances to the Panama Canal, respectively.
The Hong Kong conglomerate announced this Thursday the start of the proceedings after attempts to resolve the dispute with the Panamanian authorities did not succeed. According to the company, Panama would have breached an investment protection treaty through a series of measures taken during 2025 and 2026 that ended with the cancellation of the concessions and the takeover of both port facilities.
CK Hutchison, a group founded by businessman Li Ka-shing, has expressed its disagreement with the decisions made by Panama. The company has also warned its shareholders and potential investors to act with caution in operations related to its shares and other securities while the proceedings continue.
The new claim adds to the legal actions taken by the conglomerate due to the loss of control of the two terminals. Panama Ports Company, the subsidiary responsible for their operation until now, initiated another international arbitration against the Panamanian state earlier this year, seeking at least 2 billion dollars for what it considers an illegal state takeover of its assets.
Panama Ports Company also maintains an arbitration procedure in London against A.P. Moller-Maersk related to the facilities. The accumulation of legal processes places the future of the Balboa and Cristóbal terminals in a scenario that combines commercial, regulatory, and political aspects.
The conflict took on an international dimension after the Panamanian authorities ended the contract that allowed CK Hutchison to operate both ports. In February, the president of Panama, José Raúl Mulino, ordered the temporary occupation of the terminals after the country’s Supreme Court ruled against the Hong Kong company’s concession.
The dispute is also taking place in a context of competition between the United States and China over infrastructures linked to international trade. Beijing had warned of consequences for Panama following the cancellation of the contract, a decision made during a period when the administration of U.S. President Donald Trump had exerted pressure on the Panamanian government regarding the Chinese business presence around the Canal.
Arbitration proceedings could extend over several years. Denise Wong, a Bloomberg Intelligence analyst, notes that disputes between investors and states concerning large port concessions often require lengthy resolution periods. The amounts initially claimed may also experience reductions during the proceedings, through the decisions of the arbitration courts, negotiations between the parties, or out-of-court agreements.
The Panama conflict coincides with CK Hutchison’s open process to sell an international portfolio of port assets. The Balboa and Cristóbal ports were initially included in an operation to divest 43 terminals in various countries for more than 19 billion dollars in cash.
The transaction has been conditioned for over a year by political and regulatory issues, including objections from Beijing to the participation of the American manager BlackRock in the buying consortium. Subsequently, CK Hutchison opened the structure of the operation to Chinese state-owned companies. The group of potential buyers currently includes China Cosco Shipping Corporation and China Merchants Group.
The parties continue to await greater political clarity to determine the final structure of the sale. The loss of the Panamanian facilities would, however, have a limited effect on the total value of the operation, as Balboa and Cristóbal represent approximately 4% of the value associated with the set of assets initially included.
International precedents show that the cancellation of private concessions on public infrastructures can lead to compensation processes. Panama recovered land granted to a Chinese company last year after it failed to build the port envisioned in the conditions established by the government.
While the dispute continues, CK Hutchison’s shares rose by 2.4% during Thursday’s session in Hong Kong. The shares have accumulated a revaluation of 32% so far this year, during a period when the Li family is undergoing a process of asset sales and restructuring of their business group.
