Hong Kong firm lodges arbitration against Maersk over Panama ports takeover

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Panama City: Panama Ports Company (PPC), a subsidiary of Hong Kong conglomerate CK Hutchison, has launched international arbitration proceedings against Danish shipping giant Maersk. The legal action, filed on Tuesday, accuses Maersk of undermining existing contracts and conspiring with the Panamanian government to facilitate a state-led takeover of strategic port facilities.

The dispute centres on the Balboa and Cristobal terminals, which PPC had operated since 1997. Following a January ruling by Panama’s Supreme Court that invalidated PPC’s concessions as ‘unconstitutional,’ the government awarded temporary operating licenses to Maersk’s subsidiary, APM Terminals, and Mediterranean Shipping Company (MSC).

PPC alleges that Maersk broke a long-term contract by ‘aligning itself with the Republic of Panama’ to replace PPC and is now utilising PPC’s facilities and proprietary information under a "pre-arranged concession contract."

This new arbitration, set to take place in London, is separate from PPC’s ongoing $2 billion damages claim against the State of Panama. The legal battle has become a focal point of broader geopolitical tensions, as the U.S. has pressured Panama to curb Chinese influence over the canal which handles 5% of global trade while Beijing has condemned the contract annulment as ‘bullying.’