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CK Hutchison launches arbitration against Panama for port takeover

The company is seeking more than HK$11.7 billion in damages, separate from a separate arbitration by its Panama Ports Company subsidiary seeking at least HK$15.6 billion.

Reported · Written up by our desk · Trade & Tariffs

Hong Kong-based CK Hutchison has launched international arbitration against Panama, seeking more than HK$11.7 billion (US$1.5 billion) in damages over the government’s takeover of two strategic port terminals at the entrances to the Panama Canal.

According to CK Hutchison, Panama breached an investment-protection treaty and international law through what it described as “sovereign acts” targeting the company’s decades-old concession to operate the Balboa and Cristobal terminals, and it said Panama “destroyed CK Hutchison’s investments in Panama.” The conglomerate also argued Panama has become a “risky country” that disregards the rule of law and treaty rights, among other issues.

The latest arbitration is separate from contractual proceedings already filed by its 90% owned subsidiary, Panama Ports Company (PPC). PPC is seeking at least HK$15.6 billion (US$2 billion) in damages tied to what it calls an illegal takeover of port operations.

CK Hutchison said it notified Panama of the treaty dispute on February 4 after a year-long state campaign against its assets, but efforts to resolve the matter failed. Panama’s Supreme Court ruled in January that PPC’s concession was unconstitutional and annulled the contract, and the government took control of the terminals on February 23.

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