CK Hutchison’s Panama-based subsidiary, Panama Ports Company (PPC), is preparing to initiate arbitration proceedings against Maersk over the takeover of two strategic ports near the Panama Canal, according to a report by Reuters.
The dispute centers on the Balboa and Cristobal terminals, located on the Pacific and Atlantic sides of the canal, respectively. PPC alleges that Maersk breached a long-term agreement by aligning with the Panamanian government in efforts to remove the company from its operations at Balboa and replace it with a Maersk-affiliated operator.
“Contrary to the contract, Maersk undermined the agreement and aligned itself with the Republic of Panama in connection with its state-led campaign against PPC and a scheme to replace it through a takeover that installed new port operators,” PPC said in a statement.
The company confirmed that the arbitration proceedings will take place in London and clarified that the claim against Maersk is separate from its ongoing legal action against the Panamanian state.
Maersk rejected the allegations, stating, “Maersk does not believe it is liable for the claims and will address them in the appropriate forum.”
The legal dispute follows a ruling by Panama’s Supreme Court in late January, which invalidated the legal framework underpinning a 1997 concession granting PPC the right to operate the Balboa and Cristobal terminals. Following the decision, the government awarded temporary operating contracts to subsidiaries of Maersk and Mediterranean Shipping Company for the two ports.
PPC has argued that both the cancellation of its concession and the awarding of temporary licenses were unlawful. In late March, the company expanded its arbitration claim against Panama, with damages now exceeding $2 billion.
The case unfolds amid heightened geopolitical tensions involving the United States and China over influence in the Panama Canal, a critical maritime route handling approximately 5% of global trade. Beijing has accused Washington of applying pressure tactics, while the U.S. administration has expressed concerns over Chinese involvement in the region.
The dispute has also added complexity to CK Hutchison’s planned $23 billion sale of a majority stake in its global ports business to a consortium led by BlackRock and Mediterranean Shipping Company.
