Panama Finalizes Supreme Court Ruling Scrapping Hutchison Ports Deal

Panama published the Supreme Court ruling that annuls the concession granted to a Hong Kong-based company to operate two ports at the entrances to the Panama Canal. The decision, which appeared in the official gazette, makes the January 30 ruling final and not subject to appeal. Panama Ports Company, a subsidiary of CK Hutchison Holdings, has run the Balboa terminal on the Pacific side and the Cristobal terminal on the Atlantic side since 1997.

The Supreme Court found the underlying laws, including the 1997 concession approved by Law 5 and its 2021 extension for another 25 years, unconstitutional. Judges ruled that the agreement gave disproportionate advantages to the company and harmed state interests, including through tax exemptions and the lack of a public tender for the renewal.

The ruling takes effect immediately. The Panama Maritime Authority will now coordinate a transition to maintain uninterrupted operations at the facilities. President José Raúl Mulino directed the authority on January 30 to prepare a contingency plan. That plan includes an 18-month provisional administration period during which the authority will call a public tender for new long-term concessions.

Under the transition, APM Terminals, a unit of Denmark’s Maersk group, will handle temporary operations at Balboa. Mediterranean Shipping Company will take temporary responsibility for Cristobal. The Panama Maritime Authority has already ordered the temporary occupation of movable assets, including cranes and vehicles, at both ports to guarantee continuous and safe activity.

Alejandro Kouruklis, spokesman for Panama Ports Company, called for negotiations last week. In an interview on Radio Red, he asked the government to open a roundtable discussion with CK Hutchison representatives to reach a reasonable solution and prevent a shutdown of the ports. He said the company stands ready to renegotiate every aspect of the contract.

CK Hutchison earlier filed notice of international arbitration against Panama and warned APM Terminals that any takeover without its consent would lead to legal action and claims for damages. The two ports form part of the broader logistics network around the Panama Canal, which the United States built and operated for nearly a century before handing control to Panama in 1999. The waterway carries roughly 5 percent of global maritime trade and 40 percent of U.S. container traffic.

The facilities handled a large share of the nearly 10 million containers that moved through Panama last year. Their operations support thousands of direct and indirect jobs in the country. The annulment follows a series of audits and complaints that highlighted irregularities in the original award and the 2021 extension. Panama’s comptroller general had challenged the contract in court, citing violations of multiple constitutional articles.

Government officials have stressed that port activity will continue without interruption during the handover. Mulino has said exclusive concessions of this type will not be granted again. CK Hutchison has described the court decision as lacking legal basis and contrary to earlier Supreme Court precedents on similar contracts. The company has invested more than $1.8 billion in the terminals over nearly three decades, according to its statements.

The next steps include formal notification to Panama Ports Company and the start of the technical handover. The public tender process for the new operators is expected to begin within the provisional period. The Panama Canal Authority, which operates the waterway itself separately from the ports, has not commented directly on the port changes. Officials across government branches continue to coordinate to avoid any impact on shipping schedules.

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