Panama Ports Company (PPC), a port operator belonging to the global network of ports of CK Hutchison, has initiated arbitration proceedings against the Republic of Panama following the annulment by the Supreme Court of the extensions of its concessions for the container terminals of Balboa and Cristóbal, located in the Panama Canal. The company claims compensation for damages based on what it considers breaches of contract and applicable legal framework.
The cancellation of the concessions originates from legal actions taken by the General Comptroller of Panama, whose head, Anel Bolo Flores, filed two lawsuits alleging serious irregularities in the concession process and harm to the country's interests. PPC signed a 25-year concession for the terminals in 1997, which was renewed in 2021. However, according to a report by the General Comptroller published in April 2025, this extension was never legally authorized.
The most recent decision by the Supreme Court declared unconstitutional Law number 5 of January 16, 1997, which originally authorized the concession, its terms, and subsequent extensions. PPC has described this decision as part of a smear campaign by the Panamanian government, stating that the arbitration comes after more than a year of efforts by the company to consult and avoid disputes.
In a statement issued on February 4, PPC stated that the initiation of arbitration responds to a campaign by the Panamanian state specifically directed against the company and its concession contract during a year marked by a series of abrupt actions by the state, which have culminated in serious and imminent harm to PPC. The company points out that similar contracts in the port sector have not been subjected to such actions.
PPC grounds the arbitration on the concession contract and the legal framework that has been in effect for almost three decades as a contract-law, providing legal security and long-term respect for the applicable legal and contractual framework. The company maintains that the Republic of Panama has breached the contract and applicable law and claims extensive compensation based on an assessment of relevant financial data, subject to expedited resolution, as well as other remedial measures that may be necessary.
The company has indicated that to date only one statement has been issued by the judicial branch of the Republic of Panama regarding the matter, and that the Supreme Court ruling has not yet been officially published nor has it come into effect.
Following the announcement of the cancellation of the concessions, the Panama Maritime Authority communicated that the Panamanian state had activated a technical-operational transition plan aimed at ensuring the continuity of port activities at both ports. The authority indicated that the essential services supporting the global logistics chain would continue to operate without interruptions and that APM Terminals would assume the management of the terminals as a temporary administrator during the transition period.
APM Terminals has confirmed its willingness to assume the temporary operation of both facilities, specifying that any operational entry to the terminals will be carried out in full compliance with all legal requirements and procedures established by law. The Danish company added that this can only take place once the ruling of the Supreme Court of Justice of Panama is final and binding, a timeline that is beyond the company's control. According to available information, there is currently no defined schedule for a possible transition, and the next steps will likely be determined and announced by the Panama Maritime Authority.
PPC has reported that since the morning after the judicial press release, the Panamanian state declared and widely deployed measures to take over the company's operations. With various references to the unpublished court ruling, the measures adopted by the state have included unexpected visits to the facilities and instructions for PPC, a private company, to provide unrestricted access to physical, commercial, and intellectual property, as well as to information and employees, on the basis that the state is systematizing and executing a port transition plan through coordinated actions of state authorities.
Meanwhile, PPC has indicated that it continues to manage port operations and has met with representatives of the Panamanian state, requesting access to the mentioned plan and opportunities for consultation and coordination. The company has stated that it and its investors have made extensive investments in infrastructure, technology, and workforce development, at levels several times higher than any other port operator in Panama.
PPC has added that these investments have created thousands of direct and indirect jobs and have contributed to establishing Panama as a recognized global port and logistics center, attracting major shipping lines and generating significant economic benefits for the country. Despite recent events, PPC has reiterated its invitation to the Panamanian state to maintain clarity and consultations in order to resolve this matter.