Cranes load a cargo ship at Panama Canal's Port of Balboa, managed by CK Hutchison Holdings, in Panama City, on January 30, 2026. Photo: VCG

Hong Kong-based CK Hutchison has launched international arbitration against Panama seeking more than $1.5 billion in damages after the Latin American country seized its core port assets following months of regulatory suppression. Experts stressed that Panama's unilateral repudiation of valid commercial contracts and treaty obligations violates basic global market rules, erodes international investor confidence in shipping economy.

Hong Kong-based CK Hutchison commenced arbitration proceedings against Panama on Thursday, seeking damages of more than $1.5 billion for breaches of treaty obligations and international law, according to a statement on the website of the company.

CK Hutchison said it notified Panama of a treaty dispute on February 4, 2026, following a year-long State attack campaign on the company's assets, and sought to resolve the dispute to no avail.

In early 2025, Panama suddenly launched a State attack campaign against CK Hutchison investments that included a sudden new investigation that lacked due process, a reversal of its longstanding legal position that had protected the ports concession for three decades as a matter of law, pursuing a governmental assault on the constitutionality of its own "contract-law" and concession, and the development of a scheme to replace CK Hutchison subsidiary Panama Ports Company, S.A. (PPC), said the statement.

After notification of the treaty dispute in early 2026, Panama intensified its State campaign through executive actions and a radical takeover of the Balboa and Cristóbal port terminals controlled by PPC February 23, 2026, taking over property, equipment, technology, employees, and proprietary and protected documents and materials, all at great damage, CK Hutchison said.

Panama failed to take steps to resolve the treaty dispute and instead continued its campaign of attacks and disinformation. 

CK Hutchison continues to seek resolution and permanently reserves all rights, it said.

On March 6, PPC said in a statement that it had already filed an international arbitration against Panama seeking at least $2 billion in damages, a figure that has been misstated by the Panamanian State in press comments.

PPC also said that it had taken additional legal actions against the illegal takeover by the Panamanian State of the ports of Balboa and Cristóbal in Panama on and after February 23.

In response to a question on Panama's authorities taking control of two ports from CK Hutchison, Chinese Foreign Ministry spokesperson Mao Ning stated at a press conference on February 24 that China's position on relevant Panamanian ports is clear, and China will firmly protect the company's legitimate and lawful rights and interests.

Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times that CK Hutchison's statement is a normal and necessary response, given that the company has been directly affected by the Panamanian government's overturning of existing agreements.

Zhou noted that this incident carries far‑reaching implications for Panama. Its disregard for international market rules and the spirit of commercial contracts will make potential foreign investors wary of policy unreliability and deter new investment.

"Panama's economy and employment are heavily reliant on shipping, which in turn depends on foreign investment and infrastructure development. If the market perceives that a government may arbitrarily overturn existing agreements, few new investors will be willing to enter the market," Zhou said.

Such unilateral repossession by Panama runs counter to the provisions of existing contracts and cooperation agreements. From a commercial perspective, it violates the spirit of contracts and good‑faith principles, as well as prior cooperation consensus reached between China and Panama, Li Yong, an executive council member of the China Society for WTO Studies, told the Global Times on Thursday. 

Chinese enterprises have operated in Panama for years, making important contributions to Panama's economic growth and people's well-being. It is hoped that Panama will earnestly safeguard the legitimate rights and interests of Chinese enterprises, Chinese Foreign Minister Wang Yi said in a meeting with Panamanian Foreign Minister Javier Martínez-Acha Vásquez in New York on May 26.

China has always maintained that bilateral relations do not target any third party nor should they be subject to third-party interference. China stands ready to work with Panama to uphold the original aspiration of establishing diplomatic relations, deepen practical cooperation, fend off external disruptions, and promote the healthy and stable development of bilateral ties, Wang said.