Panama Ports Company (PPC) has filed arbitration claims against Maersk for undermining its long-term contract with the Panamanian government to operate the Balboa port.
The Panamanian government expelled PPC from the terminal after the country’s supreme court ruled Hong Kong-based parent company CK Hutchison’s operations of two Panama Canal-adjacent ports to be unconstitutional.
The decision voided Hutchison’s contract to run the port, with the government later handing the reins to Balboa over to Maersk. That ruling also forced Hutchison to surrender operations of the Cristóbal port, which was overtaken by Mediterranean Shipping Company (MSC). The appointments of Maersk and MSC are expected to last 18 months before a long-term operator takes over both ports.
In a statement, PPC accused Maersk of aligning with the Republic of Panama in connection with what it called a “state campaign” and a “scheme” against the company to replace it “through a takeover.”
The arbitration against Maersk will be held in London. PPC did not list the damages.
Maersk said in a statement it did not believe it is liable for the claims and “will address them in the appropriate forum.”
The port operator filed a separate arbitration claim against Panama last month on allegations that the country illegally took control of the ports and seized assets. That suit is calling for over $2 billion in damages.
That complaint was filed to challenge the executive decree from President José Raúl Mulino, which designated the Panama Maritime Authority to occupy its facilities and confiscate property and equipment including cranes, vehicles and computer systems.
In recent weeks, China has been inspecting and detaining vessels that are registered to Panama at its ports, raising eyebrows among U.S. officials who view the move as a retaliation for the transfer of Hutchison’s port assets.
Of the 27 vessels that China has detained from April 1 to Wednesday, 20 of them are Panama-flagged. That followed a March 93 of 125 vessels detained—nearly 75 percent of ships—were Panama-linked.
China’s Hong Kong and Macao office had previously warned that Panama would pay a “heavy price both politically and economically” after the Supreme Court ruling took place, calling it “unfounded, unreasonable and absurd.”
Panama’s top diplomat agreed that the detentions were a form of punishment.
“Panama…respects the legal sovereignty of all countries, and we simply ask for the same treatment for ourselves,” said Panama’s foreign minister Javier Martinez-Ach, speaking at a conference in Paraguay Wednesday.
CK Hutchison’s expulsion from the ports followed the terminal operator’s attempt to sell the Balboa and Cristóbal ports to a consortium of U.S. hedge fund BlackRock and MSC for $22.8 billion. The sale announcement unfolded against the backdrop of President Donald Trump calling for the U.S. to “take back” the Panama Canal, which Washington formally transferred to Panama on Dec. 31, 1999.
At the time, the proposed transfer of the ports had been seen as a victory for the U.S. and its pursuit to curb potential Chinese influence in Latin America. But China was unhappy with the prospect of the ports falling partially in American hands, and filed an antitrust investigation into the deal.
Pressure began to ramp up domestically both before and through the sale process, with Panama conducting a three-month audit to start last year.
That audit found that Hutchison had owed $300 million alone since the concession with the Panamanian government was extended in 2021. When going back to 1997, when Hutchison first took over the ports, a combination of payment defaults and accounting miscalculations cost the country $1.3 billion in lost revenue, Panama’s comptroller alleged.
With Hutchison’s 25-year contract extension at the Panama ports now void, the company is still seeking to engage MSC and BlackRock on a deal that would not include the Balboa and Cristóbal terminals.
The conglomerate would be offloading operations at up to 41 non-Chinese ports, which includes terminals in prominent at European ports like Rotterdam, Barcelona and Felixstowe. Additionally, it would include terminals in Southeast Asian gateways including Port Klang in Malaysia, Laem Chabang in Thailand and Cai Mep in Vietnam.
According to a report from the Financial Times, both parties expect the latest iteration of the transaction to close by the middle of 2027.
