HONG KONG — The dispute between Hong Kong conglomerate CK Hutchison and Panama over two strategically important ports near the Panama Canal has entered a new legal phase, with the company seeking more than US$1.5 billion in damages through international arbitration.
CK Hutchison said Thursday that it had initiated arbitration proceedings against Panama, alleging that actions by the Panamanian state violated an investment-protection treaty and ultimately resulted in the destruction of its investment in the country.
At the center of the dispute are the Balboa and Cristóbal container terminals, which CK Hutchison’s Panama Ports Company (PPC) had operated for nearly three decades. The terminals sit at the Pacific and Atlantic entrances of the Panama Canal, respectively.
What triggered the dispute?
The conflict intensified after Panama’s Supreme Court annulled the legal framework underpinning CK Hutchison’s port concessions in January 2026.
The court said the concession arrangements were unconstitutional and did not adequately serve the public interest. Among the issues cited were exclusive privileges and tax exemptions, the absence of required environmental impact assessments, and provisions requiring government approval from the company before granting certain future concessions.
CK Hutchison rejected the decision and subsequently pursued international legal remedies.
The company notified Panama of a dispute under an applicable investment-protection treaty in February and later intensified its legal actions following the state’s takeover of the port facilities.
A separate arbitration is already worth more than US$2 billion
Thursday’s new treaty-based claim is separate from another arbitration brought by Panama Ports Company.
PPC has already been pursuing an international arbitration against Panama and increased its damages claim to more than US$2 billion in March, alleging an unlawful takeover of the two terminals and related company property.
That means the combined claims connected to the Panama port dispute now represent more than US$3.5 billion, although these are separate proceedings and the amounts sought are not judgments or guaranteed payouts.
CK Hutchison has also pursued legal action involving Danish shipping group A.P. Moller-Maersk over the subsequent takeover and operation of the terminals.
Why the Panama Canal dispute has become a global issue
The legal battle extends beyond a commercial disagreement.
The ports dispute has unfolded against a backdrop of intensifying U.S.-China strategic competition over infrastructure and trade routes in Latin America.
U.S. President Donald Trump has repeatedly raised concerns about Chinese influence around the Panama Canal. CK Hutchison is a Hong Kong-based company controlled by billionaire Li Ka-shing, and its operation of the two ports became a major point of geopolitical attention.
The Panama Canal itself is a critical global trade route, with roughly 5% of global maritime trade passing through it, according to Reuters.
China has strongly criticized the actions against CK Hutchison, while Panama has maintained that its court and government actions are grounded in domestic law and national interests.
The dispute is also threatening a US$23 billion ports deal
The legal fight has created another major complication for CK Hutchison.
The company had announced plans for a roughly US$23 billion transaction involving most of its global ports business, with a consortium led by BlackRock and Mediterranean Shipping Company among the parties involved. The Panama terminals were part of the wider portfolio affected by the transaction.
However, the Panama dispute has clouded the future of the transaction.
CK Hutchison said in its latest financial update that there had been little progress on the proposed ports sale. Its ports business also recorded a hit from the disruption in Panama, with first-half throughput falling 1% and the division taking a HK$496 million impact related to the Panama situation.
What happens next?
The arbitration will now become another battleground in a dispute involving international investment law, Panama’s sovereignty, global shipping infrastructure and U.S.-China geopolitical competition.
Importantly, CK Hutchison’s US$1.5 billion-plus claim is an amount being sought by the company, not money that Panama has been ordered to pay. The outcome will depend on the arbitration proceedings and the applicable treaty and legal standards.
The case also does not simply determine who controls the Panama Canal itself. The dispute concerns the private port terminals at Balboa and Cristóbal, which are separate from the operation of the Panama Canal waterway.
For CK Hutchison, however, the stakes are substantial. The company is simultaneously fighting over compensation, its former port investments and the broader consequences of losing control of strategically located terminals after decades of operation.
For Panama, the case could become a closely watched test of how governments can restructure or terminate major foreign-investment concessions without triggering potentially costly international claims.
And for global investors, the dispute offers a powerful warning: strategic infrastructure can become the center of a geopolitical contest long after a commercial agreement has been signed.
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