Panama Seizes Ports for 'Reasons of Urgent ... Interest'

The Panamanian government seized two ports at the entrances of the Panama Canal on Monday, according to a Hong Kong-based company that has operated them for decades—a move triggered by a final ruling by Panama's Supreme Court that declared the company's concession unconstitutional.

• A decree issued Monday authorized the Panama Maritime Authority to occupy the ports for "reasons of urgent social interest," including all movable property within or outside the Balboa and Cristobal terminals and specifically naming cranes, vehicles, computer systems, and software, per the AP. A statement from the operator, CK Hutchison, said it had ceased operations at the ports after government officials came and took them over, threatening criminal prosecution.

• The saga surrounding the two Panamanian ports is part of a broader rivalry between the US and China, in which the Central American country became caught in the middle after President Trump accused China last year of "running the Panama Canal." CK Hutchison was slated to sell the two ports to a consortium that includes US investment firm BlackRock, but that prospect prompted swift intervention from the Chinese government, which halted the deal.
• In January, Panama's Supreme Court struck down the law approving the concession contract for Panama Ports Company, a subsidiary of CK Hutchison. The ruling also invalidated an extension granted in 2021, stripping the port operations of any legal basis.
• PPC said in a statement that it strongly objects to the government takeover. The company said it has received no compensation for its decades of investment. PPC has operated these terminals since 1997, when the state awarded it the concession to manage the ports located at the Pacific and Atlantic entrances to the Panama Canal.
• Panama's government announced days ago that it will guarantee the continuity of port operations and job stability, and that APM Terminals, a subsidiary of the Danish group AP Moller-Maersk, would temporarily assume the administration of the terminals while a new contract is awarded.
• Meanwhile, CK Hutchison Holdings started arbitration proceedings against Panama under the rules of the International Chamber of Commerce. It's unclear what the impact of the proceedings would be and how long they could take. The company also threatened to sue APM Terminals, if it operates the concession.