CK Hutchison seeks $1.5 billion from Panama in damages

CK Hutchison says it has launched international arbitration proceedings against Panamanian government's takeover of two canal ports and seeks more than 1.5 billion US dollars in damages following destruction of port investments.

This after its local subsidiary Panama Ports Company demanded 2 billion US dollars of compensation from the Central American nation. CK Hutchison says the two demands are to be handled separately.

The legal escalation in treaty dispute arbitration marks a breakdown between Panama and the Hong Kong-based conglomerate. In a statement issued on Thursday, CK Hutchison accuses Panama of violating a bilateral investment protection treaty through "sovereign acts that targeted a decades-old port concession" in a "state attack campaign" on the company assets.

The issue became a part of US-China tensions since Donald Trump returned to the White House and alleged China was "running" the Panama Canal.

The spat reached a boiling point this February when Panama's Supreme Court annulled the 25-year contract held by Panama Ports Company after which authorities seized the Balboa and Cristobal port terminals at each end of the canal.

CK Hutchison hit back on February 4 by filing an investment treaty dispute notice with Panama to seek resolutions, but to no avail.

It was only over six months later did Panama convened negotiations on the matter without bringing forward any plans for compensation or solution. CK Hutchison thus launched arbitration proceedings against the nation and filed a claim for more than 1.5 billion US dollars.

The facts show that Panama has now become a risky country that ignores the rule of law, corporate status and treaty-based dispute mechanism, it says, adding the board will continue to engage with Panama to find a solution while firmly defending all their rights and compensation under treaties and international law.

Earlier in March, PPC has separately sought 2 billion US dollars from Panama over its seizure of the ports which it described as unlawful.

Clarifying the two demands are entirely different, CK Hutchicon points to Panama's failed attempts to force the group into the arbitration initiated by PPC - in a bid to bypass its corporate status and the scope of its concession.

The group underscores it will continue to pursue a solution and permanently reserve all its rights.