CK Hutchison Initiates International Arbitration Against Panama

Hong Kong conglomerate CK Hutchison has announced that it has initiated international arbitration against Panama, seeking more than $1.5 billion in compensation for alleged breaches of a contract that allowed it to operate two ports along the Panama Canal.

The Dispute

The company claims that the Panamanian government launched a ‘campaign of state attacks’ against its investments in early 2025, including investigations without due process, a challenge to the constitutionality of its own contract law, and an attempt to replace Panama Ports Company, a CK Hutchison subsidiary.

According to the company, the dispute stems from a series of decisions and actions by the Panamanian government that affected the port concession held for 30 years by Panama Ports Company. The concession allowed the company to operate the Balboa and Cristóbal ports at the Panama Canal.

The Actions Taken by Panama

CK Hutchison claims that Panama’s Supreme Court invalidated the company’s contract to operate the Balboa and Cristóbal ports in January, ruling that it was unconstitutional. The court said the decision followed ‘extensive deliberation.’

The company further alleges that Panama forcibly took control of the Balboa and Cristóbal terminals in February, seizing property, equipment, technology, employees, and protected materials, causing substantial damage to the company.

CK Hutchison also claims that the company invested more than $1.8 billion in port infrastructure during the years it operated the facilities.

The Government’s Response

The government of President José Raúl Mulino has firmly rejected the claims by CK Hutchison and its local subsidiary, citing Panama’s rule of law and the defense of national sovereignty.

Mulino’s administration said that the government did not act without preparation, but rather developed a phased transition plan more than a year in advance with international port experts.

The plan anticipated a scenario in which the Supreme Court invalidated the concession, allowing authorities to take control of the ports and temporarily hand their administration to global companies such as Danish shipping company Maersk to prevent disruptions to Panama Canal operations.

The Company’s Response

CK Hutchison said in its statement that despite subsequent treaty notices, Panama has made no effort to resolve the dispute and has continued what the company described as a campaign of attacks and disinformation.

The company also stated that it will continue to pursue its claim through international arbitration, seeking compensation for the alleged breaches of the contract.