Panama’s Supreme Court has annulled contracts allowing Hong Kong-based CK Hutchison Holdings to operate two container ports on the Panama Canal, a key shipping route linking the Atlantic and Pacific oceans. The ruling affects the ports of Balboa and Cristóbal, which CK Hutchison operates through its subsidiary, Panama Ports Company (PPC).
The court said the laws enabling the company’s operations were “unconstitutional” after “extensive deliberation.” PPC, however, rejected the decision, saying it “lacks legal basis” and could threaten the livelihoods of thousands of Panamanian families who depend on port activity. The company has invested more than $1.8 billion in infrastructure and technology at the ports since 1997.
The ruling comes a year after former US President Donald Trump raised concerns about Chinese influence over the canal. During his inaugural speech in January 2025, Trump said, “China is operating the Panama Canal and we didn’t give it to China. We gave it to Panama and we’re taking it back.” Later, US Secretary of State Marco Rubio called for Panama to make “immediate changes” to reduce China’s purported control. Panama’s government has consistently rejected such claims, with President José Raúl Mulino stating that the canal “is and will remain” under Panamanian control.
Although CK Hutchison is privately owned and not part of the Chinese government, Beijing’s tighter political control over Hong Kong has changed international perceptions of the firm. Its global operations, which include ports and logistics hubs, are increasingly viewed in the context of China’s growing influence.
Mulino said the ports would continue operating without disruption. In the short term, APM Terminals Panama, part of Danish shipping company Maersk, will manage the Balboa and Cristóbal sites to ensure the flow of trade is maintained. The company said it aims to “mitigate any risks that could impact essential services for regional and global trade.”
The decision could complicate CK Hutchison’s plans to sell its Panama Canal ports to a consortium led by US investment firm BlackRock and shipping group MSC, part of a wider $22.8 billion deal. The sale was seen as an effort to reduce political risk while raising funds from valuable assets. Trump had praised the transaction for moving key holdings under US ownership, while Beijing criticised it for conflicting with national interests.
Markets reacted quickly to the ruling. CK Hutchison shares fell 4.6 percent in Hong Kong trading, dragging the Hang Seng Index down more than two percent, reflecting investor concerns over political risk.
The Panama Canal handles roughly 5 percent of global maritime trade, with up to 14,000 ships transiting the 82-kilometre waterway each year. From October 2023 to September 2024, China accounted for 21.4 percent of the cargo volume, second only to the United States.
Chinese and Hong Kong officials condemned the ruling. A spokesman for China’s foreign ministry said the country would take “all necessary measures to resolutely safeguard the legitimate rights and interests of Chinese companies,” while Hong Kong’s government said it “firmly rejects” the decision.
The court ruling highlights the growing tensions over global trade routes and foreign investment in strategic infrastructure, amid ongoing rivalry between the US and China.
