Panama’s Supreme Court has invalidated a concession that allowed Hong Kong-based CK Hutchison to operate ports at both ends of the Panama Canal, following an audit that cited irregularities in a 25-year extension granted in 2021. The decision has sparked sharp reactions from Hong Kong and drawn attention to the geopolitical significance of the canal.
Hong Kong Pushes Back
On Friday, Hong Kong’s government condemned the ruling, saying it “firmly rejects” the court’s decision. Officials criticized the use of coercive or unreasonable measures in international trade, arguing that the move threatens the legitimate interests of Hong Kong businesses and undermines global confidence in cross-border commerce.
Strategic and Political Stakes
The ruling comes amid heightened US concern over Chinese influence in the Panama Canal. While Panama’s authorities maintain that China has no role in canal operations, US officials have treated the ports as a national security matter. Panama was the first overseas stop for US Secretary of State Marco Rubio, emphasizing the canal’s strategic importance. Former President Donald Trump also suggested that control of the canal should return to the United States.
The court offered no immediate guidance on what will happen next with the port operations, leaving uncertainty over the future management of this critical trade route.
CK Hutchison Navigates Legal and Political Challenges
Panama Ports Company, the CK Hutchison subsidiary operating the ports, said it had not yet been formally notified but defended the concession as the result of transparent international bidding. The company warned that the ruling jeopardizes its contract and the livelihoods of thousands of Panamanians dependent on port activity. It confirmed that it reserves the right to pursue legal action in Panama or abroad.
The controversy is further complicated by a stalled sale announced last year, in which CK Hutchison planned to sell its majority stake in the Panamanian ports and other assets to an international consortium including BlackRock. Objections from Beijing reportedly delayed the deal, prompting the company to consider inviting a Chinese investor to join the consortium, a move widely seen as an attempt to appease the Chinese government.
The situation highlights the delicate position of Hong Kong business leaders, who must balance global commercial interests with Beijing’s expectations of political loyalty, particularly amid strained relations between China and the United States.
