CK Hutchison files $1.5 billion arbitration against Panama over ports

Ruling voiding Panama contracts seen as win amid China tensions

Hong Kong conglomerate CK Hutchison filed international arbitration against Panama on Thursday, seeking more than $1.5 billion in damages for the “destruction” of its investments in two ports at either end of the Panama Canal.

The conglomerate alleged Panama breached an investment protection treaty through a series of measures taken between 2025 and 2026, which it said resulted in the voiding of the concession contract for the ports of Balboa and Cristobal and in Panama taking over the terminals. Efforts to reach a resolution before initiating arbitration were unsuccessful, the company said.

CK Hutchison’s board said it “strongly disagrees” with the measures taken by Panama and will continue to seek resolution with the country while pursuing its rights under the treaty and international law.

The filing deepens a dispute that began in January, when a Panamanian court voided CK Hutchison’s contracts to run the two terminals. Panama’s Supreme Court had ruled the port operations unconstitutional, a decision seen as a win for the Trump administration as the U.S. continued efforts to curb China’s influence in the Western Hemisphere.

China’s office of Hong Kong affairs said the Supreme Court ruling was “unfounded, unreasonable and absurd,” noting that Hutchison’s contract had been in force for nearly 30 years.

Hutchison said Thursday that its subsidiary Panama Ports Co. will continue to pursue its own rights under a separate arbitration against Panama. The subsidiary also separately started arbitration against A.P. Moeller-Maersk in April, accusing it of undermining a long-term contract.

Panama Ports Co. said Maersk is “aligned with the Republic of Panama” in a campaign against it and a plan to replace it “through a takeover that installed new port operators.” Maersk said then it “does not believe it is liable for the claims and will address them in the appropriate forum,” adding it had no further comment at the time.

The port dispute had previously complicated talks over a potential sale of stakes in certain port assets. CK Hutchison had planned to sell the two contested ports as part of a $23 billion deal to a group that includes BlackRock.

On an earnings call last week, the company said the expropriation of the Panama ports cost it about 496 million Hong Kong dollars, equivalent to about $63.3 million, in lost earnings before interest, depreciation and amortization. Excluding Panama, underlying EBITDA would have increased 10% in reported currencies and 6.0% in local currencies, the company said.

Asked whether the company would need to book an impairment on the Panama ports business, Group Chief Financial Officer Kwan Cheung said the company does not think that will be necessary.

“We believe on the adviser council that our legal cases are strong, and therefore, as a result of that, we don’t believe an impairment is required at all,” Cheung said.