A Hong Kong business subsidiary that lost operational control of two strategic Panama Canal ports announced Friday it will pursue $2 billion in damages from Panama’s government following what it calls an unlawful seizure of the facilities.
The Panama Ports Company, which operates under Hong Kong’s CK Hutchison Holdings, revealed it is pursuing this compensation amount through international arbitration processes already underway.
Last week, Panama’s administration took operational control of the Balboa and Cristobal port facilities located at opposite ends of the Panama Canal, the vital shipping route for global maritime commerce. This action followed a ruling by Panama’s highest court that deemed the operating agreement permitting Panama Ports Company to manage both facilities as unconstitutional.
The Hong Kong firm had managed both port operations since 1997 and recently extended its operating agreement in 2021 for an additional quarter-century. Both Beijing and Hong Kong officials have criticized Panama’s seizure of these strategic facilities.
These port facilities gained international attention when former U.S. President Donald Trump claimed early last year that China was controlling Panama Canal operations.
Following CK Hutchison’s announcement in March of last year regarding a $23 billion transaction to transfer most of its worldwide port holdings, including the Panama facilities, to a group involving U.S. investment giant BlackRock, Beijing strongly objected and the transaction has remained stalled for months.
“CK Hutchison and the Panama Ports Company will not relent and they are not coming for some token relief – they will assert all of their rights and damages they are due because of the radical breaches and anti-investor conduct of the Panamanian State,” Friday’s statement said.
The company also clarified that Panama’s government had incorrectly reported the requested compensation amount in previous public statements. Panama’s Economy Minister Felipe Chapman had previously indicated the firm was pursuing $1.5 billion in damages.
In a second Friday announcement, CK Hutchison accused Panama of occupying both port facilities and seizing Panama Ports Company assets and staff members without proper transparency. The corporation stated it would continue pursuing available domestic and international legal remedies regarding this matter.
