Panama moves to occupy canal ports after court scraps CK Hutchison deal

The occupation applies to movable equipment at the ports and 'does not imply the definitive loss of ownership rights,' Panamanian President Mulino said

By Michael McDonald

 

Panamanian President José Raul Mulino ordered the temporary occupation of two ports run by a unit of CK Hutchison Holdings Ltd. following a top court’s ruling against the firm’s concession, escalating a dispute that has become a proxy battle between the US and China in Latin America.  

Mulino said in a speech Monday that the administration and operation of the two ports on the strategic Panama Canal will revert to the country’s National Maritime Authority to guarantee the facilities’ “uninterrupted, safe and efficient operation.”

 

The occupation applies to movable equipment at the ports and “does not imply the definitive loss of ownership rights,” Mulino said. The state will return the property, including cranes, to its owners “when the determining reason for the occupation ceases,” he added. Panama will pay corresponding compensation, unless the equipment is sold to a new party, he said. 

 

 

CK Hutchison’s subsidiary in Panama called the port takeover illegal, according to a statement cited by La Prensa, saying it would hold the government responsible for any damages. The company said the government had taken over the ports without proper coordination or transparency, the outlet reported.

 

CK Hutchison didn’t immediately respond to a request for comment from Bloomberg News. The company’s Hong Kong-listed shares slid as much as 0.9 per cent during early Tuesday trading.

 

The conglomerate founded by Hong Kong billionaire Li Ka-shing has resisted Panamanian authorities’ attempt to revoke its right to operate the two ports. Panama’s latest decision adds fresh uncertainty into long-gestating talks over Li’s deal to sell 43 global facilities to a consortium backed by US investment firm BlackRock Inc. 

 

The deal has become a proxy for the US-China rivalry, and is one of the company’s most geopolitically complex yet. Announced in March last year, it could net CK Hutchison more than $19 billion in cash if completed. As talks drag on, parties involved have been considering ways to move the discussions forward — including splitting the assets into separate parcels with different ownership structures — Bloomberg has reported. 

 

To win Beijing’s approval, CK Hutchison also earlier invited state-owned China Cosco Shipping Corp. to join the buyer consortium. 

 

Panama’s maritime authority has signed contracts with APM Terminals, a division of AP Moller-Maersk, and Switzerland-based MSC Mediterranean Shipping Company, to operate the ports in the interim, Mulino said Monday. The government will begin an open tender process and award concessions to operate the ports to two separate firms, he said. The equipment at the ports will be valued in order to determine next steps, he said.  

 

Earlier this month, CK Hutchison warned Maersk of legal action should the Nordic company’s terminal unit try to take over operations at the two ports. 

 

Panama’s top court struck down CK Hutchison’s concession to operate the ports in January, a decision that was praised by Washington but angered China — which retaliated by halting talks over new projects in Panama. The country’s Comptroller General had announced an audit of the concession in January 2025, a week before Donald Trump’s inauguration.