CK Hutchison Officially Initiates International Arbitration Against Panama

Balboa container terminal on the Pacific side of the Panama Canal (Photo: Reuters)

Panama Ports Company S.A. (PPC), a subsidiary of CK Hutchison, has officially commenced arbitration proceedings against the Republic of Panama. The claim was filed on February 3, 2026, under the current concession contract and the ICC Rules of Arbitration of the International Chamber of Commerce.

Allegations of Discrimination

This legal action follows what PPC describes as a year-long campaign by the Panamanian State specifically targeting the company and its concession contract, while other contracts in the port sector have not been subjected to similar scrutiny. PPC states that this campaign culminated in recent measures it considers to cause grave and imminent harm to its business operations.

According to the company, extensive efforts were made over the past year to engage with state authorities to avoid arbitration. While continuing to operate the port and cooperate with the government, PPC says it repeatedly expressed concerns and sought clarification through official correspondence, but these requests were frequently ignored.

Legal Basis and Claims for Compensation

The arbitration is grounded in the concession contract and the legal framework established nearly three decades ago, which PPC describes as providing long-term legal certainty. The company alleges that Panama has breached both the concession contract and applicable law. Consequently, it is seeking substantial damages based on financial assessments, along with other remedies it deems necessary. PPC and its investors assert that they reserve all their rights.

Context of the Dispute: "Unconstitutional" Ruling and Takeover Risk

To clarify the context of the dispute, PPC pointed to a judicial press release issued late on January 29, 2026, regarding a Supreme Court ruling declaring Law 5 of January 16, 1997, as unconstitutional, along with other related legal instruments. However, PPC notes that this ruling has not yet been published or taken effect, and it contradicts previous Supreme Court decisions regarding similar contracts.

Following the aforementioned press release, the Panamanian State took steps to assume control of PPC's operations, including site visits and demands for unrestricted access to facilities, commercial and intellectual property, information, and personnel. These actions are linked to the unpublished court ruling and a port transition plan coordinated among state agencies.

Investment Commitment and Call for Dialogue

PPC states that it continues to manage port operations and work with government representatives, while requesting access to the transition plan and opportunities for consultation.

The company emphasizes that, under CK Hutchison’s ownership, significant investments have been made in infrastructure, technology, and human capital development, creating thousands of direct and indirect jobs and contributing to Panama's role as a global port and logistics hub.

Despite the commencement of arbitration proceedings, PPC reiterates its call for transparency and dialogue with the Panamanian State to seek a resolution to this dispute.

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Source: Phaata.com (According to Container-News)

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