CK Hutchison Files Arbitration Against Panama, Seeking $1.5 Billion in Damages — Update

By Megan Cheah

Hong Kong conglomerate CK Hutchison has launched international arbitration proceedings against Panama, escalating a dispute over two strategically-important ports that have become caught up in U.S.-China tensions.

The conglomerate said it is seeking more than US$1.5 billion in damages for the "destruction of the company's investments" in the country.

Hutchison alleged that Panama breached an investment protection treaty through a series of measures taken between 2025 and 2026, which it said resulted in the "destruction" of the concession contract for the ports of Balboa and Cristobal, located on either end of the Panama Canal, and Panama taking over these terminals.

Efforts to reach a resolution before initiating arbitration were unsuccessful, the company added.

The board added it "strongly disagrees" with the measures taken by Panama and will continue to seek resolution with the country while pursuing its rights under the treaty and international law.

The move intensifies a dispute that began in January, when a Panamanian court voided CK Hutchison's contracts to run two terminals at either end of the Panama Canal.

Hutchison has been in dispute over the concessions since Panama's Supreme Court ruled its port operations unconstitutional.

The ruling was seen as a win for the Trump administration amid rising China-U.S. tensions, as the U.S. continued efforts to curb China's influence in the Western Hemisphere.

China's office of Hong Kong affairs said that the Supreme Court ruling was "unfounded, unreasonable and absurd," noting that Hutchison's contract had been in force for nearly 30 years.

Hutchison said Thursday its unit Panama Ports Co. will continue to pursue its own rights under a separate arbitration against Panama.

The subsidiary also separately started arbitration against A.P. Moeller-Maersk in April, accusing it of undermining a long-term contract.

The unit said Maersk is "aligned with the Republic of Panama" in a campaign against it and a plan to replace it "through a takeover that installed new port operators."

Maersk said then it "does not believe it is liable for the claims and will address them in the appropriate forum," adding it had no further comment at the time.

Hutchison previously said the issue muddled talks over a potential sale of stakes in certain port assets.

The company had planned to sell the two contested ports as part of a US$23 billion deal to a group that includes BlackRock.

On an earnings call last week, the company said that the expropriation of the Panama ports cost it about 496 million Hong Kong dollars, equivalent to US$63.3 million, in lost earnings before interest, depreciation and amortization.

Excluding Panama, underlying Ebitda would have increased 10% in reported currencies and 6.0% in local currencies, the company said.

As for whether the company would need to book an impairment on the Panama ports business, Group Chief Financial Officer Kwan Cheung said the company doesn't think that will be necessary.

"We believe on the advisor council that our legal cases are strong, and therefore, as a result of that, we don't believe an impairment is required at all."

--Fabiana Negrin Ochoa contributed to this report

Write to Megan Cheah at megan.cheah@wsj.com

(END) Dow Jones Newswires

August 19, 2026 21:32 ET (01:32 GMT)