Panama’s Supreme Court has ruled that a decades-old contract granting a Hong Kong-based company rights to operate ports at the Panama Canal violates the country’s constitution and does not serve the public interest, according to a decision issued on Thursday.
The ruling voids a concession held by Panama Ports Company (PPC), a subsidiary of Hong Kong conglomerate CK Hutchison, which was originally signed in the 1990s. While the court has not yet formally published its full ruling or legal reasoning, the decision was first reported by local television network TVN and subsequently reviewed by Reuters and confirmed by a court official.
In a unanimous decision by its nine-member bench, the court said the contract granted PPC disproportionate rights, including exclusive privileges and tax exemptions, effectively eliminating competition and creating a monopoly in practice. The court also cited the absence of mandatory environmental impact assessments and noted that the agreement required the government to seek PPC’s approval before granting other port concessions.
“Disproportionate rights and prerogatives are granted to PPC, creating conditions that effectively eliminate competition,” the court said. “Furthermore, it places in private hands decisions that should be in the public interest, prioritizing private interests over the general welfare of society.”
The ruling comes amid intensifying geopolitical tensions between the United States and China over global trade routes and influence in Latin America. It represents a strategic win for Washington, as former U.S. President Donald Trump had openly supported a proposed sale of PPC’s assets, portraying it as a move to reduce Chinese influence over the canal.
The decision could complicate CK Hutchison’s proposed $23 billion sale of dozens of ports worldwide—including the Panamanian terminals—to a consortium led by BlackRock and Mediterranean Shipping Company. China has opposed the transaction and has previously threatened to block the deal.
Following the ruling, China’s foreign ministry said it would take “all necessary measures” to protect the rights and interests of Chinese enterprises. The Hong Kong government also criticized what it described as coercive interference by foreign governments in international trade relations.
The Panama Canal remains one of the world’s most critical maritime trade routes, handling roughly 5% of global shipping, making control and influence over its port operations a sensitive geopolitical issue.
