Breaking! Panama Government Seizes Two Ports Under CK Hutchison!
Created on 02.25
On February 23rd local time, the Panama Maritime Authority took coercive action, officially "taking possession" of the Port of Balboa and Port of Cristóbal operated by Hutchison Port Holdings' subsidiary Panama Port Company (PPC), and gaining full control of the operations and all equipment of both ports.
This is the latest move by Panamanian authorities after the Supreme Court of Panama ruled last month that the contract for CK Hutchison's subsidiary to operate the ports of the Panama Canal was "unconstitutional."
With the ruling of the Panamanian Supreme Court taking effect and being gazetted on that day, the dispute over the operating rights of the core ports of the canal officially entered the substantive execution phase.
The two ports have been
operated and managed by PPC since 1997
According to a presidential decree in Panama, the Panama Maritime Authority has now taken over the two ports to "ensure the continuous, safe, and efficient operation of the ports."
At the same time, the Panamanian government announced the launch of an 18-month transition period, during which the two ports will be operated by different companies until new contracts are awarded through international bidding.
Maersk's subsidiary, Panama APM Terminals, will operate the Port of Balboa, while MSC's Terminal Investment Limited (TIL) will be responsible for operating the Port of Cristóbal.
In addition, the Panamanian Minister of Labor assured approximately 1,200 employees at both ports that there would be no "layoffs".
Panama's Mulino stated
This move is a temporary transitional measure
Only applies to movable equipment within the port
Does not imply the final loss of ownership
It was also stated that Panama will return the relevant property and pay compensation when the reason for the takeover is revoked, unless the equipment is sold to a new party.
Source: CK Hutchison Official Website
CK Hutchison stated that Panamanian authorities forcibly entered the port and threatened PPC employees who did not cooperate with criminal prosecution.
It condemned the takeover as illegal and warned the Panamanian government that this action would pose serious risks to the operation, health, and safety of the Balboa and Cristóbal terminals.
According to Panamanian media reports, CK Hutchison is seeking approximately $2 billion in compensation and stated that it is taking "domestic and international legal action," having notified the Panamanian government of the investment protection treaty dispute and initiated arbitration proceedings with the International Chamber of Commerce.
The Panamanian government's move
completely disrupted CK Hutchison's strategic deployment
its plan to sell 43 port assets globally in 2025 for $22.8 billion
has been dashed.
Currently, CK Hutchison's stock price has fluctuated due to this incident. Although the Panamanian government attempts to cloak its actions with "rule of law," its unilateral termination of the contract and forceful seizure of assets have severely damaged its credibility as an international trade hub.
Regarding the Panamanian government's forceful takeover of two ports operated by Hong Kong's CK Hutchison Group, Foreign Ministry spokesperson Mao Ning stated at a regular press conference on the 24th that China's position on the relevant port issue in Panama is clear.
"I believe you have also noticed that the relevant enterprise has issued a statement, indicating that it will reserve all rights, including resorting to legal proceedings. China will resolutely safeguard the legitimate rights and interests of the enterprise."
Article Source: Weiyun.net
WeChat