Hong Kong-based CK Hutchison announced it seeking $1.5 billion in damages through international arbitration proceedings launched against Panama on Wednesday over the loss of two key Canal contacts this year.
The company claimed on its website that it launched the arbitration against Panama and is seeking the claimed amount in damages over what it described as the “destruction” of its investments in the Central American nation.
“Panama has demonstrated that it has become a risky country that disregards the rule of law, corporate form, the scope of parties to a contract, the scope of arbitration agreements, treaty rights and the resolution of treaty disputes,” the company’s statement read in part.
The government of Panama has not publicly commented on the start of the arbitration process with CK Hutchison at press time.
CK Hutchison noted on Wednesday that its new international arbitration process against Panama is separate from the one initiated by one of its subsidiaries, Panama Ports Company (PPC), which is seeking $2 billion in damages over the annulment of the two Panama Canal contracts by the nation’s Supreme Court.
“CK Hutchison’s treaty rights are distinct from PPC’s contract rights being pursued in a separate contract arbitration, which then proceeded apace,” the HK-based company said in its statement. “Panama previously sought, and failed, to force CK Hutchison into the contract arbitration, in disregard of corporate form and the applicable contract, as is a matter of public record.”
“CK Hutchison is sharing these developments due to Panama’s dissemination of inaccurate information over time,” the text continued. “CK Hutchison also continues to seek resolution and permanently reserves all rights.”
For over two decades, CK Hutchison, through its subsidiary PPC, maintained control of two Panama Canal ports located at opposite ends of the interoceanic trade route in the provinces Balboa and Cristóbal. PPC’s control of the two terminals was part of a debate initiated by President Donald Trump shorty before the start of his second term about China’s alleged growing influence and control of the Panama Canal, which the United States built. CK Hutchison is controlled by pro-communist businessman Li Ka-shing. Both the Balboa and Cristóbal ports reportedly handle as much as 40 percent of the canal’s entire traffic.
PPC was originally awarded a 25-year contract for the administration of the two ports in 1997 that had been automatically renewed for an additional 25-year period in 2021. The contracts and their renewal were subject to an extensive investigation by the Office of the Panamanian Attorney General, which determined in February 2025 that both contracts contained numerous violations and irregularities in detriment of Panama’s rights.
In response to a lawsuit filed by Panama’s Comptroller General Anel Flores in 2025, the Panamanian Supreme Court ruled in January to declare the contracts awarded to PPC as unconstitutional. Since then, the two ports have been at the center of a diplomatic impasse between Panama and the Chinese communist regime.
Panama’s Foreign Minister Javier Martínez-Acha revealed during a meeting at the Organization of American States (OAS) in June that the Chinese regime had pressured the government of conservative President José Raúl Mulino to override the Supreme Court’s ruling in benefit of China. As per the top court’s ruling, the government of Panama assumed the temporary administration of the Balboa and Cristóbal ports during a transition period. The government later awarded temporary management rights to two private companies until a new longer-term lease process takes place.
Following CK Hutchison’s loss of the two canal port contracts, Beijing began a retaliatory campaign against Panamanian-flagged vessels docking at Chinese ports, conducting large-scale detentions of Panamanian vessels.. Reports published in April indicated that, as part of China’s retaliation against Panama, at least one in four Panamanian vessels were subjected to additional inspections, causing significant delays that disrupted the regular flow of maritime traffic for Panama.
The United States and its allied Latin American nations rallied in support of Panama and rejected China’s retaliatory actions against the Central American Nation in a joint April statement. U.S. Secretary of State Marco Rubio stressed at the time, “Any attempts to undermine Panama’s sovereignty are a threat to us all.”
Christian K. Caruzo is a Venezuelan writer and documents life under socialism. You can follow him on Twitter here.