Key Points:
- Court annuls CK Hutchison’s port concession at both ends of the Panama Canal.
- Comptroller audit flagged irregularities in the 25-year 2021 extension.
- U.S. officials view Chinese involvement in ports as a security concern.
- Future port management remains undecided; CK Hutchison disputes the ruling.
PANAMA: Panama’s Supreme Court on Thursday annulled a concession held by a Hong Kong-based subsidiary of CK Hutchison Holdings to operate ports at both entrances of the Panama Canal, declaring the agreement unconstitutional.
The decision follows an audit by Panama’s comptroller general that cited irregularities in the 2021 renewal of the 25-year concession, including alleged accounting discrepancies and unpaid fees. The audit said the issues may have cost Panama hundreds of millions of dollars, prompting legal review by the country’s top court.
The decision follows an audit by Panama’s comptroller general that raised allegations of irregularities in the 2021 extension of the 25-year concession, including accounting discrepancies and unpaid fees. The audit suggested that the irregularities may have cost Panama hundreds of millions of dollars, prompting the court to intervene.
Independent analysts said the ruling also comes amid heightened pressure from the United States to limit the presence of Chinese-linked companies near strategically important infrastructure in the Western Hemisphere.
US officials have repeatedly emphasised the strategic significance of Panama’s ports, citing the potential for Chinese influence over the critical shipping hub.
President Donald Trump has publicly asserted that Panama should return control of the canal to the United States. At the same time, Secretary of State Marco Rubio has also emphasised limiting Chinese involvement in canal-adjacent ports during visits to Panama.
Despite these concerns, Panama’s government and the Panama Canal Authority have maintained that China has no operational control over the waterway. Nevertheless, the court ruling bolsters US objectives to prevent Chinese companies from gaining footholds in infrastructure critical to hemispheric security, according to the American media.
CK Hutchison’s subsidiary, Panama Ports Company, responded that it had not been officially notified of the court’s decision and stressed that the concession was awarded through transparent international bidding.
The Supreme Court’s brief statement offered no indication of next steps for port operations, leaving interim management and potential re-tendering to Panama’s executive and maritime authorities.
The ruling casts uncertainty over CK Hutchison’s planned sale of its global port assets, including the Panama terminals, to an international consortium reportedly involving BlackRock and Mediterranean Shipping Company.
Market observers are now evaluating the potential impact on global shipping flows, as the Panama Canal remains a vital transit route linking the Atlantic and Pacific Oceans.
Analysts note that the legal and diplomatic ramifications of the decision are likely to unfold over the coming months, potentially involving arbitration, new bidding processes, and further international scrutiny. The court’s ruling underscores the enduring intersection of commerce, law, and geopolitics surrounding the Panama Canal.
