China has warned Panama it will face political and economic consequences after the country’s Supreme Court annulled the legal framework underpinning a long-running port concession held by a CK Hutchison unit at both ends of the Panama Canal, according to a commentary published by China’s Hong Kong and Macao Affairs Office.  

Last week’s court ruling annulled a key contract

The ruling strips the legal basis from the concession operated by Panama Ports Company at the Balboa and Cristóbal terminals, forcing Panama to restructure control over two of the canal’s most strategically critical container gateways  Last week’s court ruling annulled a key contract that Panama Ports Company, a CK Hutchison subsidiary, has held since the 1990s to operate container terminals at the canal’s Pacific and Atlantic entrances. .The legal decision, which cited constitutional violations and concerns over public interest, was seen as a win for Washington amid intensifying US-China rivalry over the control of global trade routes.

Disrupt the Hong Kong conglomerate

The ruling threatens to disrupt the Hong Kong conglomerate’s proposed $23-billion sale of 43 ports in 23 countries, including the two at the Panama Canal, to a consortium led by BlackRock and Mediterranean Shipping Company. MSC“ The ruling ignored the facts, breached trust, and seriously damaged the legitimate rights and interests of enterprises in Hong Kong, China,” the Hong Kong and Macau Affairs Office said on its social media account. “China has sufficient means and tools, and sufficient strength and ability to defend a fair and just international economic and trade order,” the office said. If the Panamanian authorities “insist on having their own way ... heavy prices both politically and economically will surely be paid!” it added.

The court decision was welcomed by US authorities.

The court decision was welcomed by US authorities. John Moolenaar, chair of the US House Select Committee on China, called it a “win for America.” Without naming the US in the statement, the Chinese office said “some country has ... used bullying tactics to force other countries to obey their will,” and that Panama had “willingly succumbed” to hegemonic power.US President Donald Trump, who initially celebrated the proposed $23-billion ports sale, has called for the US to “take back” the Panama Canal in the face of Chinese influence.

The legal framework that had allowed it to operate the ports.

CK Hutchison’s subsidiary last week said the ruling was inconsistent with the legal framework that had allowed it to operate the ports. CK Hutchison, controlled by Hong Kong’s richest man Li Ka-shing, announced a sale last March covering 43 ports in 23 countries, including two near the Panama Canal, to a group led by BlackRock and Italian Gianluigi Aponte’s family-run shipping firm MSC. After Beijing criticised the deal, the conglomerate said in July it was in talks to include a Chinese “major strategic investor” in the consortium.

The Chinese investor is COSCO

Sources have said the Chinese investor is COSCO, and it was seeking a large stake, while the others were keen for it to be a minority shareholder, a position that became a sticking point in talks. COSCO did not respond to a request for comment.

Shares of CK Hutchison have dropped more than 8pc since the court’s ruling, although it is still trading at its highest since June 2021. It is up nearly 60pc since the sale was announced, as investors banked it would earn the company more than $19 billion in cash.

The strategic importance

While the two ports account for just 5pc of Hutchison Port Holdings’ earnings before interest, tax, depreciation and amortisation (EBITA), their strategic importance is high. PPC said it reserved the right to begin national and international legal proceedings after the court ruling, and analysts said the port company cannot appeal the decision, but can seek clarifications that could slow termination. It is unclear how losing the ports will affect CK Hutchison’s global ports deal, but some analysts, including JPMorgan and Citigroup, said it would be easier for parties to agree terms with Panama out of the picture.

All parties are still in talks on the sale of CK Hutchison’s ports,

On the other hand all parties are still in talks on the sale of CK Hutchison’s ports, said a person with direct knowledge of the transaction. Besides the Panama ports, other strategic assets in the portfolio up for sale include ports in Rotterdam in the Netherlands, Barcelona in Spain, Mexico and the Bahamas. CK Hutchison’s China ports are significant, but are not part of the sale. One option in the latest discussions is that the parties consider breaking up the portfolio and have the three bidders hold stakes in different ports, said another source with knowledge of the matter.

Arbitration proceedings to challenge a Panama court ruling 

Meanwhile Hong Kong-based CK Hutchison Holdings has said it has launched arbitration proceedings to challenge a Panama court ruling that nullified its right to operate two ports at the country’s canal, hours after Beijing warned the nation would pay a heavy political and economic price. The Hong Kong conglomerate led by billionaire Li Ka-shing’s family on Wednesday said it strongly disagreed with the decision by Panama’s Supreme Court, which could take effect in early February, and revealed that its subsidiary, Panama Ports Company (PPC), had taken action against it.

“On February 3, 2026, PPC commenced, and will pursue vigorously, arbitration proceedings against the Republic of Panama pursuant to the applicable concession contract and the Rules of Arbitration of the International Chamber of Commerce,” the company said in a notice.

Founding of Hutchison Corporation

CK Hutchison, founded by Hong Kong billionaire Li Ka-shing, is not owned by the Chinese government.But Beijing's tighter political control over Hong Kong in recent years has changed how the company is viewed internationally. Its global assets - which include ports and logistics hubs - are now often seen through the lens of wider concerns about China's influence.

Related : CK Hutchison's move to MSC and Blackrock risks falling through

Source : Agencies

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