China to pause investment deals with Panama over canal court ruling

Panamanian President Jose Raul Mulino said he hopes the legal battle with Hong Kong-based CK Hutchison over ports on the Panama Canal would not escalate, and argued the verdict was within the country's constitutional and legal framework.

A media report says China has instructed state-owned enterprises to halt negotiations on new investment programmes with Panama involving billions of US dollars.

In a press briefing, Panamanian President Jose Raul Mulino said his government would remain firm in the ruling against a CK Hutchison subsidiary, emphasising the independence of the courts. He said the decision is unique, definitive, final, and must be complied with.

Saying "Panama is a dignified country," Mulino rejected threats by any nation on earth.

A week ago, Panama's Supreme Court announced that a concession held by a subsidiary of CK Hutchison to operate two ports on either end of the Panama Canal was unconstitutional.

The subsidiary, Panama Ports Company S.A., said in a statement that it had commenced arbitration against Panama over the case.

Authorities in Beijing are reportedly applying additional scrutiny to Panamanian imports such as bananas and coffee.

Sources say Chinese shipping firms have been instructed to opt to other ports for shipments under the circumstances that no considerable extra cost is incurred.