The Panamanian government has seized the Balboa and Cristóbal container terminals at both ends of the Panama Canal and placed them under state control.
A corresponding decree authorized the shipping authority to occupy the facilities out of “urgent social interest”. According to CK Hutchison, the measure covers all movable goods at the terminals, including container gantry cranes, vehicles and IT systems.
The previous operator, Panama Ports Company (PPC), a subsidiary of the Hong Kong conglomerate CK Hutchison, subsequently ceased operations. The company stated that government representatives had threatened criminal prosecution and unilaterally declared the concession terminated. CK Hutchison described the takeover as unlawful and spoke of the culmination of a prolonged campaign against the operator. No compensation has been paid to date.
CK Hutchison also stated that, together with PPC, it would continue to examine the legal options in connection with the ruling, the forced takeover and the alleged termination of the PPC concession from the company’s point of view. This also included additional national and international proceedings against the Republic of Panama, its representatives and allegedly involved third parties in order to protect all rights and claims in this matter.
Judgment as the starting point for dispute
The starting point of the conflict is a ruling by the Supreme Court in January, which declared the original concession agreements from 1997 to be unconstitutional. In the opinion of the judges, the company had been granted too far-reaching concessions at the expense of the state finances. PPC had been operating the terminals since the end of the 1990s and the license had been extended for another 25 years in 2021. According to industry figures, around 38% of all container transits through the Panama Canal recently passed through these facilities.
The dispute is also geopolitically explosive. The United States and China are among the most important users of the waterway, which handles around 5% of global maritime trade. US President Donald Trump recently accused China of exerting too much influence over the canal. At the same time, a sale of the terminals by CK Hutchison to a consortium including US financial investor BlackRock had been planned. However, the project was reportedly halted by the Chinese side.
CK Hutchison also threatened to take legal action in this case. The Group has already initiated arbitration proceedings at the International Chamber of Commerce in Paris. Observers expect a protracted investor dispute with possible consequences for the operation of one of the world’s most strategically important maritime trade corridors.
APMT and TIL temporarily take over operations
Panama’s President José Raúl Mulino has now announced that the Maersk subsidiary APM Terminals (APMT) will temporarily manage the Balboa Pacific Terminal, while the MSC-affiliated terminal company Terminal Investment Limited (TIL) will take over the Cristóbal Atlantic Terminal. According to the government, the temporary licenses are valid for up to 18 months and are intended to ensure uninterrupted operations until a new international concession procedure has been prepared. The government emphasizes that this is a transitional measure to secure the port’s function and not a permanent reallocation of the facilities.
