Panama Ports Company (PPC) has formally launched an international arbitration case against the Republic of Panama. The legal action, initiated on February 3, 2026, follows a recent Supreme Court ruling that voided the company’s port concession contracts. This dispute centers on the control of the critical Balboa and Cristobal terminals adjacent to the Panama Canal.
The company stated it invoked arbitration clauses within its concession agreement. It is proceeding under the International Chamber of Commerce (ICC) Arbitration Rules. PPC alleges a targeted campaign by the Panamanian state caused severe and imminent damage to its operations.
Supreme Court Ruling Sparks Legal Battle
This conflict escalated dramatically on January 29. The Supreme Court of Justice of Panama announced it had found the contract-law with PPC unconstitutional. The court concluded no valid concession exists for administering the two ports. Its ruling described the contract as detrimental to public interest, granting disproportionate benefits to the concessionaire at the expense of the state and collective welfare.
Panama Ports Company strongly contests this judicial decision. The company argues the outcome directly contradicts previous Supreme Court rulings on similar contracts. It also notes the formal court judgment has not yet been published or entered into legal force.
“The Panamanian state has routinely dismissed communications, consultation efforts, and requests for clarity,” the company stated in its official release. [Translated from Spanish]
PPC claims it sought dialogue for over a year to avoid this conflict. It says it continued port operations diligently and cooperated with the state in multiple ways. All efforts were allegedly met with official disregard, even in the days leading to the arbitration filing.
Immediate Fallout and Government Demands
The government’s response to the court announcement was swift and direct. According to PPC, authorities demanded unrestricted access the very next day. This demand covered physical and commercial property, intellectual information, and employee interviews. Officials cited a transition plan the ports company says it has not formally reviewed.
Panama Ports insists its contract holds the protected status of a contract-law. It accuses the state of breaching applicable contract and law by reversing long-held positions. The company asserts the government is now promoting legal actions designed to destroy the concession agreement. This agreement resulted from a transparent international bidding process years ago.
“Despite recent events, PPC reiterates its invitation to the Panamanian state to provide clarity and consultations to resolve this matter,” the company communicated. [Translated from Spanish]
Arbitration proceedings are now underway. The company maintains its willingness to negotiate a resolution even as it pursues this legal avenue. This case places a spotlight on Panama’s contractual stability for major foreign investors. The operations of a key panama ports company now hang in the balance between judicial authority and international arbitration.
Observers are watching closely. The final resolution could influence future foreign investment in Panamanian infrastructure. The supreme court decision has undoubtedly created significant commercial uncertainty. How Panama navigates this dispute will send a powerful signal to the global business community.