Panama’s Supreme Court ruled on Thursday that a contract held by Hong Kong-based CK Hutchison Holdings to operate ports at the Panama Canal was unconstitutional, voiding the agreements. The decision, confirmed by a court official, stated the contract violated Panama’s constitution by granting exclusive privileges, tax exemptions, and lacking environmental assessments. The ruling also required government approval from the company for future concessions.
President José Raúl Mulino assured that port operations would continue uninterrupted as the ruling is implemented. A local subsidiary of Danish shipping giant A.P. Moller-Maersk will temporarily operate the ports while Panama opens a new bidding process for a long-term concession. The court’s decision followed an audit by Panama’s comptroller that identified irregularities in a 25-year extension of the concession granted in 2021.
The ruling aligns with long-standing U.S. concerns over China’s influence near the Panama Canal. Some analysts view the decision as a victory for the Trump administration’s efforts to counter China’s strategic presence in the Western Hemisphere. Beijing has criticized the ruling, while the U.S. welcomed it. The outcome also raises questions about CK Hutchison’s proposed $23 billion sale of 43 ports globally to a consortium led by BlackRock and Mediterranean Shipping Company (MSC).