Panama’s Supreme Court has declared unconstitutional the law establishing the port concessions for CK Hutchison subsidiary Panama Ports Company (PPC) covering the ports of Balboa and Cristóbal.
The ruling concerns Law No. 5 of 16 January 1997, its addenda and extension, and declares unconstitutional the contract spanning the ports' construction and development, operations, administration and management.
Panama's comptroller general, Anel Flores announced in August 2025 that he had filed suit to the Supreme Court against the contract after allegedly finding irregularities during an audit of the port's operations related to a 25-year extension of the concession granted in 2021. Flores said that $1.3bn had been "left on the table" due to tax incentives and other benefits granted to PPC, and that investment in the port by PPC had not reached the mandated $1bn, something PPC strongly denied.
Panamanian President Jose Raul Mulino said that the ports of Balboa and Cristobal will continue to operate without disruption despite the ruling. APM Terminals Panama, a Maersk subsidiary, will temporarily manage the Balboa and Cristóbal sites, he said. During a televised address at 0700 hrs local time, Mulino said the Panama Maritime Authority (AMP) will coordinate with PPC and there would not be any layoffs.
The Supreme Court decision has sent waves of worries amongst the other port operators. One of them, who declined to be named, told Seatrade Maritime News that the ruling against PPC regarding their concession contract "was not a surprise".
What was a surprise, he said, was that international media was reporting the outcome before the ruling was made in Panama. The ruling raises questions over the legal protection contract law gives to investors, he added.
“Does Panama have another legal instrument to calm international/local investors? How will this ruling play out in the geopolitics arena with the US and China, and Panama in the middle? What will the implications be for Panama's port operators?“
Investor sentiment will be a particular concern as the court's decision comes just a few weeks ahead of the Panama Canal's call for an international tender for the construction of a new port on each entrance to the waterway, Corozal on the Pacific side and Telfers on the Atlantic side.
PPC's statement on the Supreme Court ruling said: "Based on available information, the new ruling lacks legal basis, not only undermining Panama Ports Company and its concession contract but also affecting the welfare and stability of thousands of Panamanian families who directly or indirectly rely on port operations for their livelihood."
On 30 January, Chinese foreign ministry spokesperson Guo Jiakun said that the country would take "all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies." CK Hutchison is based in Hong Kong, and the Hong Kong Special Administrative Region (HKSAR) Government has also strongly disapproved of and firmly rejected the ruling, with a spokesman urging Hong Kong enterprises to carefully review their current and future investments in Panama.
CK Hutchison's issues in Panama disrupt plans to sell its overseas ports holdings to a consortium led by BlackRock and MSC's Terminal Investment Limited (TiL) for $22.8bn, a deal announce in March 2025. The in-principle deal appears to have stalled since as it was dragged into a geopolitical tussle between the US and China, becoming the subject of an investigation by China's State Administration for Market Regulation among others.
At the time, CK Hutchison co-managing director Frank Sixt said the sale of the company's port assets was not related to rising pressure from the Trump administration over China's influence in Panama, an issue Trump raised in his inaugural address. Earlier this month, Mulino said the crisis with the US was over after the two nations worked to restore trust and cooperate in fighting international crime.
