CK Hutchison Seeks $2B in Damages from Panama as It Takes More Legal Steps
CK Hutchison and its Panama-based subsidiary, the Panama Ports Company, have taken a series of additional legal steps in the ongoing dispute over the concession to operate terminals in the ports of Balboa and Cristobal. As part of the action, the Panama Ports Company (PPC) clarified that under the already filed international arbitration, it is seeking at least $2 billion in damages, a figure it says Panama has been misrepresenting.
Before the Supreme Court decision was published finalizing the ruling that the contracts were unconstitutional, Hutchison had already said it would begin an arbitration under the rules of the International Chamber of Commerce. The ruling was finalized, and Panama seized the two ports on February 23 and immediately entered into temporary contracts with divisions of Maersk and MSC to operate the ports.
Both PPC and its parent company, CK Hutchison, report they have increased the legal actions, saying they will “not relent and they are not coming for some token relief.” They are calling the actions of Panama “radical breaches” while continuing to assert the actions were inconsistent with applicable law, contract, and treaty rights.
CK Hutchison, in today’s statement (March 6), continues to say Panama has a pattern of disregarding communications and discontinuing consultations. They assert it was part of a “state campaign” that had been carried out over the past year. It also accuses the state of “various inaccurate remarks,” which it says have “further aggravated the circumstances.”
The company has filed an administrative petition seeking reconsideration of the decree that empowered what Hutchison calls the “occupation” of the ports and the taking of its property and personnel.
PPC says it is seeking recourse related to the decree based on its extreme scope mandating the taking of all its property. It is also challenging the “radical implementation” of the decree, and the seizure and misuse of property, it says, is unrelated to port operations.
They are asserting that Panama entered a private storage facility and unlawfully seized documents. They are demanding immediate access to and return of property and legally protected documents and information. Investigators for Panama had confirmed they searched the company’s offices, saying it was related to new information about possible crimes.
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Panama said when it took over the operations of the port terminals that it was also taking control of all the equipment and information. It, however, was careful not to claim ownership but instead said it was controlling the equipment needed to continue the operation of the terminals.
The Panama Maritime Authority reported that as of February 28, terminal operations were back to 100 percent in Balboa under the management of APM Terminals. It said that operations had been open at Cristobal under the management of Terminal Investment Limited (TiL), a division of MSC, since February 27. The authority has said the country’s intent is to hold new tenders within 18 months and that companies would be limited to operating the terminals in one port to further increase competition.