Panama's top court rules contract with CK Hutchison company on Panama Canal ports is unconstitutional

The Supreme Court of Panama has ruled that the contract granted to a subsidiary of Hong Kong-based CK Hutchison Holdings Ltd. to operate ports on the Panama Canal is unconstitutional.

The statement gave no guidance on what would happen to the port.

The CK Hutchison subsidiary criticised the ruling's inconsistency with legal frameworks while stating it reserves all rights, including legal proceedings.

The ruling was handed down on Thursday local time.

Panama's Gil Ponce Palace of Justice said that following "extensive deliberation," it found the concession contract for the development, construction, administration and management of the Balboa and Cristobal ports by the Panama Ports Company (PPC), a subsidiary of CK Hutchison, was unconstitutional.

PPC and Panama renewed the 25-year concession to operate the two ports at either end of the Panama Canal in 2021, and the contract is set to expire in 2047.

But last July, an audit by Panama's comptroller appealed to the court, alleging that there were irregularities in the extension.

PPC has invested nearly 1.8 billion US dollars in infrastructure and technology of the Panamanian ports in nearly three decades of operation.

The CK Hutchison subsidiary responded in a statement that the new ruling by Panama's top court runs counter to relevant legal frameworks and laws that had allowed it to operate the ports.

The statement said it "jeopardizes not only PPC and its contract, but also the well-being and stability of thousands of Panamanian families who depend directly and indirectly on port activity."

The company has insisted that its concession was the result of transparent international bidding.

In Beijing, the Foreign Ministry has vowed to take all necessary measures to safeguard the legitimate rights and interests of Chinese businesses.

A Hong Kong government spokesman said that the SAR Government strongly opposes any foreign government using coercive, repressive or other unreasonable means in international economic and trade relations to seriously harm the legitimate business interests of Hong Kong enterprises.