Panama Ports Company accused the Panamanian government on Monday of causing it drastic and growing damage after authorities seized two key terminals at the entrances to the Panama Canal. The subsidiary of Hong Kong-based CK Hutchison Holdings had operated the Balboa and Cristóbal ports for nearly three decades under a concession that Panama’s Supreme Court declared unconstitutional.
Officials took control on February 23 and transferred operations, including the company’s equipment, to Denmark’s Maersk subsidiary APM Terminals and MSC-affiliated Terminal Investment Limited for an 18-month interim period. Panama Ports Company and its investors challenged the annulment before the International Chamber of Commerce in Paris. The company has filed arbitration claims seeking at least $2 billion in damages for what it calls an illegal national takeover and egregious breaches of contract.
In its latest statement, Panama Ports Company said Panama failed to meet its obligations in the proceedings. The country did not submit its response to the claim by the March 13 deadline set by the arbitration body. Panama requested an extension, citing lack of preparation and absence of legal representation, even though officials had announced a year-long planning process for the ports.
The company rejected those arguments and accused the state of further violations through confiscation of documents, archives and private property under security forces. It said the actions undermine legal certainty and investor confidence.
Why does this matter for Costa Rica? The Panama Canal serves as a critical artery for regional trade, handling shipments that support Costa Rica’s export industries — including bananas, pineapples and other goods — as well as cruise routes popular with expats and tourists. Prolonged uncertainty at these strategic terminals could raise shipping costs, disrupt supply chains and affect foreign investment confidence across Central America, with direct implications for Costa Rican businesses, ports like Moín and tourism-dependent economies.
The ports sit at opposite ends of the canal: Balboa on the Pacific side and Cristóbal on the Atlantic. Panama’s Comptroller General filed the lawsuit that triggered the Supreme Court ruling. The agency argued the concession harmed the country, claiming Panama lost more than $1.2 billion in potential revenue. It also cited excessive tax exemptions, inadequate rent payments and irregularities in audits that justified the 2021 extension for another 25 years.
President José Raúl Mulino defended the decision. He described the original contract as opaque and accused the operator of turning the terminals into an autonomous territory where Panamanian authorities lacked full access to information and operations.
The annulment followed public pressure from U.S. President Donald Trump, who had threatened to retake control of the canal over alleged Chinese influence exercised through the Hong Kong firm. China has slammed the ruling and urged Panama to reconsider its actions to protect bilateral interests.
Panama Ports Company said the government’s conduct over the past year disregarded repeated communications and consultation efforts. It reserves all rights and will pursue full legal remedies through arbitration and other channels.
Operations at the terminals continue under the interim operators while the arbitration proceeds. The dispute highlights tensions over foreign concessions in strategic infrastructure, with Panama insisting the move restores sovereignty without amounting to expropriation.
Panama Ports Company stressed that its actions aim to defend acquired rights and repair damages inflicted on investors after decades of reliable service.
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