Panama’s legal challenge to CK Hutchison’s port concession adds a new hurdle to the conglomerate’s ongoing US$22.8 billion global port sale.
Panama’s Comptroller General Anel Bolo Flores filed two lawsuits before the Supreme Court on Thursday, seeking to annul the concession granted to Panama Ports Company (PPC), a subsidiary of Hong Kong’s CK Hutchison, citing serious irregularities and harm to the country’s interests.
The legal action—one for unconstitutionality and another for nullity—follows the release of an April audit report that uncovered what Flores described as “many irregularities” in the contract with PPC. Speaking on Thursday, he said the concession was not only poorly negotiated but detrimental to Panama.
“The duty of this Comptroller’s Office is to defend Panamanians’ money and always act in defence of the country’s best interests,” Flores said. He urged the Supreme Court to admit the lawsuits promptly, saying the public was expecting results.
The concession issues
PPC holds a 25-year concession for container terminals at the ports of Balboa and Cristóbal, which was renewed in 2021. However, according to a scathing report by Panama’s Office of the Comptroller General from April, the concession renewal for the terminals was never legally authorised. Flores also argued at the time that tax breaks and amendments to the concession, which dates back to 1997, may have cost the state up to US$1.3 billion in lost revenue. CK Hutchison has denied the claims, stressing “the extension of the concession contract is valid, in force, and compliant with all legal requirements.”
The legal challenge is the latest twist in CK Hutchison’s port sale saga, where the two Panamanian terminals lie at the heart of geopolitical and regulatory scrutiny. Specifically, the exclusivity window between CK Hutchison and the BlackRock-TiL consortium to negotiate the US$22.8 billion sale of its global ports division, which includes PPC’s terminals at Balboa and Cristobal, expired on July 27. The company said on Monday it was still in talks with the consortium members and that it had invited strategic investors from mainland China. The likely participation of Chinese companies in the deal is seen as a concession to the Chinese government, which has opposed the sale, particularly regarding the terminals in Panama, saying the transaction was a “betrayal of Chinese strategic interests.”
The tug-of-war
The potential inclusion of state-backed Chinese firms, like Cosco Shipping, in the consortium has further complicated the situation. While it may ease concerns in Beijing, it could raise opposition elsewhere, most likely in Washington. Before the planned sale, the US government had voiced strong opposition to CK Hutchison’s presence in Panama, accusing the company of espionage on behalf of the Chinese state and exerting undue influence over the strategically vital Panama Canal. Moreover, US President Donald Trump even threatened to reclaim control of the waterway.
The tug-of-war between the US and China over “control” of Panama’s ports continues as both nations navigate broader geopolitical and trade tensions. Following two-day talks in Stockholm, the United States and China have agreed to work on extending the pause on new tariffs beyond the August 12 deadline. However, the extension is not finalised and requires approval from US President Donald Trump.
Against this backdrop, Panama appears determined to regain control over its key port assets. By pursuing legal action aimed at nullifying the existing concession with Panama Ports Company, the country could effectively remove the Panamanian terminals from the broader sale.
worldcargonews.com
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