CK Hutchison Holdings has formally warned it will sue APM Terminals if the rival operator attempts to take control of Panama’s key Balboa and Cristobal ports without its consent. The Hong Kong conglomerate issued the threat on Thursday, February 12, escalating a major dispute over the strategic terminals located on the Panama Canal. The company insists the future of port operations now rests solely with Panama’s Supreme Court and the national government.
This conflict stems from a January 29 announcement by Panama’s Supreme Court which declared unconstitutional the 1997 law underpinning the concession contract for Panama Ports Company (PPC), a CK Hutchison subsidiary. PPC has operated the two ports for nearly three decades under that legal framework. Although the formal ruling has not yet been published or taken effect, CK Hutchison alleges the Panamanian state is already pushing for a forced exit and transition.
The company has now initiated formal dispute proceedings against the Republic of Panama under an international investment protection treaty. It aims to safeguard its rights against state measures affecting PPC.
“CKHH has notified A.P. Moller-Maersk A/S that any assumption by APM Terminals of the operations of the two terminals without the agreement of CKHH will cause damages and will lead to legal actions against APMT,” [Translated from Spanish]
This direct warning to Danish shipping giant Maersk and its terminal arm, APM Terminals (APMT), follows a January 30 notice from the Panama Maritime Authority. That notice named APMT as the intended temporary administrator for the ports as part of a government transition plan. APMT publicly expressed its willingness to assume the role.
Legal Battles Escalate on Multiple Fronts
CK Hutchison’s actions represent a multi-pronged legal strategy. Beyond the treaty dispute notification, PPC initiated an arbitration process on February 3 under the terms of its original concession contract. The parent company says it continues to evaluate other national and international legal actions against Panama, its agents, and any third parties collaborating in what it calls illegal acts.
The situation places APM Terminals in a difficult position. The company is caught between a government appointment and a severe legal threat from the current operator, Hutchison Holdings. CK Hutchison’s subsidiary, Hutchison Port Holdings, reiterated the warning directly to Maersk on February 10. It stated any attempt to assume administration without consent would trigger lawsuits for damages.
Panama’s government has not provided guarantees or clarity on PPC’s operational future according to the company. Officials continue to advance what CK Hutchison describes as a forced stoppage or takeover of port operations. This lack of a defined path forward increases uncertainty for port workers and global shipping lines that depend on these critical canal hubs.
Operations Hang on a Supreme Court Decision
Despite the fierce dispute, CK Hutchison says it remains committed to protecting PPC workers and preventing disruptions. It pledges to ensure continuity for vessel and cargo flow through the canal, but with a major caveat. The company states this is only possible if decisions by the Supreme Court and the Panamanian state allow it.
The immediate operational future hinges entirely on the court’s unpublished ruling.
“The continuity of operations depends exclusively on the decisions made by the Supreme Court of Justice and the Panamanian state, actions that, according to the company, are completely outside the control of CKHH, HPH and PPC.” [Translated from Spanish]
CK Hutchison warns that if the published ruling formally terminates the concession, PPC would be legally unable to continue operating. This would force an immediate and potentially chaotic handover. The current standoff reflects broader tensions in Panama regarding foreign investment and long-term contracts, a theme explored in a recent Supreme Court analysis.
For global trade, the stakes are significant. The Balboa and Cristobal ports are vital transshipment nodes on the world’s busiest maritime routes. Any prolonged legal battle or operational instability could ripple through supply chains. The dispute also tests Panama’s reputation as a stable destination for major infrastructure investment.
The coming weeks will be decisive. All parties await the Supreme Court’s final, published verdict. That document will determine whether Panama proceeds with its planned transition to APM Terminals or if CK Hutchison’s legal challenges can halt the process. The outcome may influence how Panama handles other foreign contracts and set a precedent for legal action involving international investors. For now, the threat of lawsuits from CK Hutchison Holdings casts a long shadow over the future of Panama’s gateway ports.