Panama Ports Dispute Escalates Amid Legal Battle Over Canal Terminals

CK Hutchison has warned A.P. Moller-Maersk of legal action if its terminal division, APM Terminals (APMT), moves to assume temporary operation of the Balboa and Cristobal container terminals flanking the Panama Canal — a confrontation that now threatens to derail a US$22.8bn ports transaction and destabilise one of global trade’s most critical transhipment hubs. Panama’s Supreme Court ruled in late January that Law No. 5 of 1997, the legal foundation for nearly three decades of operations by Hutchison subsidiary Panama Ports Company (PPC), was unconstitutional.

The ruling has not yet been published or entered into force, but Panama’s Maritime Authority (AMP) moved quickly, announcing on 30 January that APMT would serve as temporary administrator during a transition period. APMT confirmed its willingness to step in but stressed that any operational entry would occur only once the ruling becomes final and binding. “APM Terminals is not involved in the ongoing legal proceedings and bears no role in decisions regarding the short- or long-term structure or future administration of Balboa and Cristobal terminals,” the company said, adding that any action would be “guided by technical criteria, supply chain integrity, and the public interest.”

CK Hutchison has contested the ruling and initiated International Chamber of Commerce arbitration, while also notifying Panama of a dispute under an investment protection treaty. PPC argues the decision is inconsistent with the legal framework underpinning its concession contract.