CK Hutchison Ups the Ante Starting Second $1.5B Arbitration Against Panama
Hong Kong-based CK Hutchison Holdings has started a second arbitration against the Republic of Panama over the cancellation earlier this year of its subsidiary’s port concession. While the Panama Ports Company is already pursuing an arbitration that it said could amount to more than $2 billion in damages for the contract, the parent company is now seeking damages of more than $1.5 billion for breaches of treaty obligation and international law.
The company asserts breaches of an investment protection treaty through sovereign acts that targeted the concession and destroyed CK Hutchison’s investments in Panama. It is asserting that Panama, starting in early 2025, launched a campaign with a series of state actions targeting its investments. CK Hutchison cites a “sudden new investigation that lacked due process, a reversal of its longstanding legal position that protected the concession,” and a scheme to replace the Panama Ports Company.
In harsh language, CK Hutchison is saying that Panama “sought to cover up its conduct through disinformation.” It says the campaign culminated in the taking over of property, technology, employees, and proprietary and protected documents and materials.
It is also picking up a line from the criticisms by the Chinese government. CK Hutchison says that by not respecting the laws, “Panama has demonstrated that it has become a risky country.”
In filing the arbitration claim, the company asserts that Panama failed to take steps to resolve the treaty dispute. The company says it responded with a supplemental treaty notice and that Panama has conducted “only one perfunctory consultation meeting.” Further, it says there has been no offer of compensation or resolution.
The Panama Supreme Court ruled at the beginning of 2026 that the enabling laws for the concession to operate the port terminals in Balboa and Cristobal were unconstitutional and void. The concession had been in place since 1997 when Panama began assuming operations at the end of the United States’ treaty to build and operate the canal. Panama had renewed the concession in 2021 with the Panama Ports Company for an additional 25 years.
Panama gave temporary contracts to MSC’s Terminal Investments Limited and Maersk’s APM Terminals to take over the operations. The country has declared its intent to conduct a new tender and has said it would limit bidders to only one of the terminals as opposed to the single contract in the past. It has also declared a new tender for competing new greenfield terminals in each port.
The new arbitration filing is the latest in a series of actions by CK Hutchison and the Panama Ports Company. The port subsidiary has its arbitration claims, and they have also been pursuing claims against Maersk and MSC for their "interference" with the business.
The Chinese government also said Panama had become a risky place to do business, and reports said it had warned other Chinese companies about doing business in Panama. COSCO suspended some of its shipping service to Panama, and China was accused of running a campaign of retaliation that included a dramatic increase in port state inspections and detentions for Panama-flagged ships calling in Chinese ports.
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While CK Hutchison had agreed to sell the two Panama ports as part of its larger exit from international port operations, Bloomberg reports it was unlikely to have been a factor in the failure to complete the port sale. It writes that the deal for CK Hutchison to sell its international port operations is likely “waiting for clearer political signals before moving the sale ahead.”
It speculates that Panama and CK Hutchison will settle the dispute. Furthermore, it believes CK Hutchison is increasing the pressure, aiming to force Panama into negotiations.
