Hong Kong-based conglomerate CK Hutchison has launched international arbitration proceedings against Panama after the country’s top court annulled its contract to operate two ports on the strategically vital Panama Canal, a move widely seen as influenced by pressure from the United States.
The development was confirmed on Wednesday as China’s Hong Kong and Macau Affairs Office (HKMAO) condemned Panama’s ruling, describing it as “absurd,” “shameful and pathetic,” and a serious violation of Hong Kong enterprises’ rights.
The HKMAO accused the Panamanian court of ignoring facts, breaching trust, and undermining the legitimate interests of Hong Kong businesses. The office warned that Panama would face “heavy prices both politically and economically” if it proceeded with the decision, while asserting that China possesses sufficient means and strength to defend a fair and just international economic and trade order.
The dispute traces back to last week when Panama’s Supreme Court annulled CK Hutchison’s contract to operate two key ports along the canal. Observers note that the decision followed public threats by then-U.S. President Donald Trump, who claimed that the waterway—connecting the Pacific and Atlantic Oceans—was effectively under Chinese control and posed a national security threat to the United States. Though China did not explicitly name the U.S., its statement condemned “bullying tactics” by external powers and accused Panama of succumbing to hegemonic pressure.
CK Hutchison criticized the ruling in a statement to the Hong Kong Stock Exchange, declaring that its board “strongly disagrees with the determination and corresponding actions in Panama.” The company confirmed it is consulting legal counsel and reserves the right to pursue additional national and international legal proceedings to protect its interests. Meanwhile, Panama’s Maritime Authority announced that Danish shipping firm Maersk would temporarily take over operations at the affected ports.
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The Panama Canal plays a central role in global commerce, handling roughly 40 percent of U.S. container traffic and 5 percent of worldwide trade. Built and operated by the United States for nearly a century before being handed over to Panama in 1999, the canal remains a strategically sensitive asset. John Moolenaar, chairman of the U.S. House Select Committee on China, called the Panamanian court’s decision “a win for America,” reflecting the geopolitical dimensions of the dispute.
The incident has triggered strong reactions from Beijing, signaling a willingness to use political and economic leverage in defense of Hong Kong-based companies. Analysts say the case underscores the growing tensions over Chinese investment in strategic global infrastructure, as well as the potential for international legal battles when business operations intersect with geopolitics.
CK Hutchison’s arbitration filing marks the first formal step in a legal challenge that could have wide-ranging implications for foreign companies operating in Panama and other strategic transit hubs worldwide.