Port Dispute: Panamanian President Rejects Hutchison's Accusations

The legal and diplomatic battle between China, Panama, and the CK Hutchison conglomerate is escalating. During a press conference on Thursday, Panamanian President Jose Raul Mulino officially dismissed accusations from Panama Ports Company (PPC) and CK Hutchison regarding Panama's cancellation of the Chinese company's concession contract for the Balboa and Cristobal ports.

Tensions on the Legal Front

Earlier this week, PPC claimed that Panama missed the filing deadline for international arbitration, citing the country's lack of an international legal team. Firing back, President Mulino dismissed the accusation, calling it "outrageous and a lie."

He affirmed that Panama has appointed international lawyers to defend against PPC's claims, amidst the company's demands for at least $2 billion in damages.

PPC and China have repeatedly accused Panama of acting illegally and failing to respect the contract. PPC further alleged that Panama broke into a storage archive, confiscated proprietary documents, and refused to return them.

Responding to the media, President Mulino emphasized that the company's recent statements are "fallacious and libelous."

Background of the Port Concession Revocation

The incident stems from February, when Panama revoked the operating rights for both terminals following a final ruling by the Supreme Court. The court declared that the laws establishing the 1997 concession contract and its 25-year no-bid extension in 2021 were unconstitutional. This lawsuit was initiated by the Comptroller General of the Republic after an audit uncovered numerous irregularities.

Panama alleges that the state lost up to $1.2 billion in revenue due to irregularities, shortfalls in payments, and tax exemptions. Conversely, Hutchison asserts that it invested at least $1.7 billion throughout the concession period to modernize and operate the terminals at both ends of the Panama Canal, as well as to train the workforce.

Temporary Operational Solutions and Geopolitical Implications

According to media reports, Panama has launched a new investigation into the enterprise following the port revocation. Currently, the government has awarded temporary operating contracts to Maersk's APM Terminals and MSC's Terminal Investment Limited (TiL) to manage the terminals until a new bidding process can be organized. Reports indicate that both terminals are operating normally and at maximum capacity following a seamless handover.

While PPC and Hutchison claim they requested discussions to resolve the issue and accused Panama of conducting a year-long campaign against the company, Panama asserted on Thursday that it was the company that refused to cooperate, concealed information, and obstructed coordination processes.

Hutchison announced it will continue to pursue all legal avenues against Panama, and the international arbitration is expected to drag on for years. On its part, China has retaliated by urging other companies to cease trading with the Central American nation.

In stark contrast, the US has backed Panama's revocation of the terminals. Last year, Donald Trump repeatedly stated that China was operating the Panama Canal and called for action, warning that otherwise, the US would retake control of the waterway.

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Source: Phaata.com (According to Maritime-Executive)

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