"Panama Lawyers Challenge Hong Kong Firm's Canal Concession

Panama Lawyers Challenge Hong Kong Firm's Canal Concession

PANAMA CITY - In a move that underscores the significance of Panama's strategic location in global trade, two Panamanian lawyers have filed a complaint to cancel the concession of a Hong Kong-based company for operating two ports on the Panama Canal.

The lawsuit, brought before the Supreme Court, targets CK Hutchison Holdings' subsidiary, Panama Ports Co., which has managed the ports of Cristobal and Balboa since 1997. The contract, initially signed in 1997, was automatically renewed in 2021 for another 25 years.

According to Norman Castro, one of the lawyers behind the suit, the concession violates what the Constitution says in about 10 articles. Julio Macias, the other lawyer involved, stated that after conducting a detailed analysis of the contract, they decided an action for unconstitutionality was the appropriate means to challenge the arrangement.

The complaint also accuses Panama Ports Co. of not paying taxes and benefits due, citing a series of advantages that allegedly contravene the law.

This development comes on the heels of United States President Donald Trump's threats to seize the Panama Canal, built by the US and handed over to Panama in 1999, amid concerns that China was effectively operating it. However, temperatures have since cooled following Secretary of State Marco Rubio's visit to the region, and Panamanian President Jose Raul Mulino has announced that they will not renew participation in China's Belt and Road Initiative.

In response to Trump's charges, Panama also announced an audit into CK Hutchison Holdings' operations.

As a major player in finance, retail, infrastructure, telecommunications, and logistics, CK Hutchison Holdings is one of Hong Kong's largest conglomerates. This situation highlights the critical role that Panama plays in global trade, underscoring its importance as a strategic location for international commerce.

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