The dispute over the Panamanian container terminals of Balboa and Cristóbal has escalated following the decision by Panama’s Supreme Court to annul the concession granted to Panama Ports Company, a subsidiary of Hong Kong-based CK Hutchison. The ruling forms part of the broader economic and geopolitical dispute surrounding the sale of all Hutchison Group container terminals to the consortium formed by BlackRock and MSC, a deal seen as favouring US interests but indirectly blocked by the Chinese government, which is insisting on the inclusion of Cosco among the buyers. Panama has become a focal point in the confrontation between the two powers.
China’s response is unfolding on two fronts. On the legal side, Panama Ports Company has initiated international arbitration proceedings against the Republic of Panama, challenging the legitimacy of the ruling and the subsequent measures adopted by the government. On the political and diplomatic front, Chinese authorities have described the judgment as illegitimate and politically motivated, warning of repercussions for economic and institutional relations with the Central American country.
According to an official statement from Panama Ports Company, the Supreme Court’s ruling is “without legal basis” and contrary to the contractual commitments undertaken by the Panamanian state. The company stresses that the concessions were approved under the national legal framework and renewed in 2021 in line with the applicable procedures, and that their subsequent annulment undermines legal certainty for foreign investors. In this context, PPC notes that it has invested approximately $1.8 billion (around €1.66 billion) over 28 years of operations at the two terminals, describing the decision as disproportionate to the alleged irregularities.
CK Hutchison has also formalised its position in a filing to the Hong Kong Stock Exchange, in which the board of directors states it “not to agree” with the ruling and with the measures adopted by the Panamanian government. The statement adds that the company is consulting its legal advisers and reserves “all rights” including the possibility of further legal action at national and international level. In parallel, Panama Ports Company has challenged the manner in which the state launched a technical transition plan and began taking control of port operations, arguing that these steps were taken before the full publication of the ruling and before it became final.
On 4 February 2026, the company announced the launch of international arbitration proceedings against the Republic of Panama in relation to the early termination of the concession contract. The arbitration has been initiated before the International Chamber of Commerce Court of Arbitration, as provided for under the contractual dispute resolution clauses. According to the group’s communications, the aim is to secure financial compensation for the damages arising from the early termination of the concessions and the interruption of a contractual relationship which, in the company’s view, complied with the legal framework at the time of signature and renewal.
Beyond the arbitration, CK Hutchison has left open the possibility of further litigation in the relevant national jurisdictions, signalling that the case could also have implications for ongoing extraordinary transactions, including the global sale of the group’s port assets. This stance reinforces the company’s view that the Panamanian ruling extends beyond a single case and affects the broader stability of long-term concession contracts in the port sector.
Alongside the technical and legal challenge, the Supreme Court’s decision has triggered a strong political reaction from China. According to international media reports, the Hong Kong and Macao Affairs Office and other bodies linked to the Beijing government have described the ruling as “absurd”, “shameful” and “pathetic” accusing Panama of acting under external political pressure, particularly from the United States. In these statements, Panama’s decision is portrayed as a breach of foreign investment protection principles and as a negative signal regarding the country’s legal reliability.
Official Chinese statements have gone so far as to warn of “serious political and economic consequences” for Panama, urging the government to reconsider its position and to “correct the course” of the decisions taken. An editorial published by China Daily Hong Kong, regarded as close to Beijing’s official stance, argues that the ruling lacks legal foundation and sets a dangerous precedent for the security of Chinese investments abroad, particularly in strategic infrastructure sectors. Some commentators and English-language outlets have openly described the move as an act of political hostility towards a Hong Kong company and, indirectly, towards China.
Antonio Illariuzzi
