Panama’s Supreme Court has declared the concession contract for the country’s two largest ports unconstitutional. President Jose Raul Mulino announced a contingency plan on Friday, January 30, 2026, to ensure operational continuity at the critical Balboa and Cristobal terminals following the landmark judicial decision.
The court’s ruling, delivered on Thursday, January 29, invalidates the legal framework that has allowed Panama Ports Company (PPC) to operate the strategic facilities for nearly three decades. The government immediately activated a prepared transition strategy to prevent disruption to a key pillar of the national economy and global trade routes.
Government Activates Contingency Plan for Port Transition
President Mulino addressed the nation to outline the immediate steps following the Supreme Court’s decision. He emphasized that the ports are a national asset requiring protection and stable management. The government had prepared for this potential outcome over the past year, consulting with national and international maritime experts.
Mulino appointed engineer Alberto Alemán Zubieta to lead a technical team coordinating all port-related competencies. The team’s mandate is to ensure an orderly and professional transition process. The Panama Maritime Authority was instructed to meet immediately with the current operator to coordinate necessary actions.
“Once the court’s ruling is formally executed, the company APM Terminals Panama, a subsidiary of the AP Moller–Maersk group, will temporarily assume the operation of the port terminals of Balboa and Cristobal,” said President Jose Raul Mulino. [Translated from Spanish]
This temporary measure will only activate after the final court execution and will last until a new concession is granted through an open process. The president stressed that the state will guarantee the company’s legal rights while enforcing all contractual obligations until the transition concludes.
Court Decision and Company Reaction
The supreme court/ corte suprema ruled on two separate unconstitutionality lawsuits identified as Case No. 119313-2025 and Case No. 17547-2025. The court found Law No. 5 of January 16, 1997, and other relevant laws unconstitutional, effectively voiding the contract’s legal foundation.
Panama Ports Company, a subsidiary of multinational conglomerate CK Hutchison Holdings, reacted swiftly. In an official statement, PPC said it had taken note of the judicial announcement but had not yet been formally notified. The company strongly criticized the decision.
PPC called the ruling legally unfounded and contrary to the existing legal framework. The company argued the decision contradicts the law that approved the contract serving as the basis for its operations for almost thirty years. The future legal steps available to the ports company remain unclear.
Focus on Worker Security and Future Concession
President Mulino delivered a direct message to port workers, assuring job security. He stated unequivocally that no layoffs would occur as a result of this transition. The Maritime Authority and the Ministry of Labor will maintain an open dialogue to protect employment continuity and all acquired worker rights.
The ultimate goal, according to the government, is a new concession under terms more favorable for Panama. The temporary operation by APM Terminals is seen as a bridge to that future. Mulino expressed his expectation that the current operator, PPC, would cooperate openly throughout the process.
This major shift in control of the Panama Canal adjunct ports marks a significant moment for Panamanian logistics. The government insists it will not repeat past errors seen in other major resource concessions. The focus now turns to executing a seamless handover that safeguards Panama’s role in international commerce.
The coming weeks will involve intricate coordination between the outgoing panama ports operator, the interim manager, and multiple government agencies. The stability of this process is critical for a nation whose economy is deeply intertwined with global maritime trade.