Hong Kong firm launches arbitration against Panama after court voids canal port contract
CK Hutchison's Panama subsidiary initiated international arbitration following Panama's Supreme Court decision to annul its operating licenses for two strategic canal ports.
1 min ago
Hong Kong-based CK Hutchison announced Wednesday the start of international arbitration proceedings against Panama after the country's top court annulled its contract to operate two ports on the Panama Canal.
The Panama Ports Company, a CK Hutchison subsidiary, said it "initiated arbitration proceedings against Panama" based on "the applicable concession contract and the International Chamber of Commerce Arbitration Rules." The company did not specify the amount of compensation being sought in its statement.
The arbitration follows Panama's Supreme Court ruling to void CK Hutchison's licence to operate the ports of Balboa on the Pacific side and Cristóbal on the Atlantic side of the canal. The court's decision came amid pressure from the United States, which has made blocking Chinese influence over the strategically important waterway a priority.
In its arbitration announcement, Panama Ports Company accused Panama of causing "serious damages" through "a state campaign" against the company that culminated in the contract annulment. The company stated that arbitration proceedings followed "extensive efforts by PPC over the past year to consult and avoid disputes," adding that "the Panamanian state has routinely rejected communications and consultation efforts."
China's Hong Kong and Macau Affairs Office responded to the court ruling on Tuesday, calling it "absurd," "shameful and pathetic," and "logically flawed" and "utterly ridiculous." The office said the Panamanian court had "ignored the facts, breached trust, and seriously damaged the legitimate rights and interests of enterprises in Hong Kong, China."
The Chinese government issued a warning to Panama, stating the country "will inevitably pay a heavy price" unless it changes course. In a commentary posted on its WeChat account, the Hong Kong and Macau Affairs Office of the State Council opposed the ruling on behalf of both the Chinese government and the Hong Kong Special Administrative Region government.
China accused the United States of acting with "Cold War mentality" and "ideological bias" in the case. A Chinese government spokesman defended the rights of Chinese enterprises in the region and questioned the U.S. attitude toward the canal.