The Panamanian government seized control of two ports on opposite sides of the Panama Canal from Hong Kong-based operator CK Hutchison, granting interim supervision of the terminals to Maersk and Mediterranean Shipping Company (MSC) for 18 months.
President José Raúl Mulino made the announcement Monday after Panama’s Supreme Court published its final ruling that annulled Hutchison’s contract with the government to operate the Balboa and Cristóbal ports. Hutchison had operated both ports since 1997 and extended their deal another 25 years in 2021, but the extension came under heavy scrutiny over the past year amid a government audit that found contractual irregularities.
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With the new plan, Maersk’s APM Terminals will oversee the Port of Balboa on the Pacific side of the canal, while the MSC’s Terminal Investment Limited (TIL) will manage the Port of Cristóbal on the Atlantic side.
Sourcing Journal reached out to Maersk and MSC.
Mulino issued an executive decree designating the Panama Maritime Authority to coordinate the transition to maintain uninterrupted operations at the facilities. Under the decree, the authority would take temporary control of movable assets, including cranes and vehicles, computer systems and software, before handing them to the incoming operators.
In a televised address, President Mulino called the decree “a legitimate tool that respects the ownership of the assets.”
“This does not imply an expropriation of those assets, but rather their use to guarantee the operation of the ports until their real value is determined for the actions that may correspond,” Mulino said.
The two ports will still undergo another open tender process before Maersk and MSC’s temporary operations expire, so that long-term concessions are awarded to two separate firms, according to Mulino.
“We will begin…an open and competitive manner for new port concessions, one in each port,” Mulino said. “We will do so with transparency, with the humility not to repeat the mistakes of the past, and with the patriotic conviction that Panama’s interests must always be above any other interest.”
Panama’s Labor Minister Jackeline Muñoz de Cedeño said in a news conference Monday that there would be no layoffs at either port, and that more than 1,200 direct jobs and over 3,000 jobs linked to suppliers will be protected.
CK Hutchison confirmed that subsidiary Panama Ports Company (PPC) was forced to cease operations of the terminals on Monday.
“Government representatives arrived without invitation to the terminals and informed representatives of PPC that the concession no longer exists and that PPC must cease operations, and instructed that PPC employees would be transferred out of PPC, must not communicate with PPC, and must comply with government instructions, under threat of criminal prosecution,” said CK Hutchison in a statement. “The State now has control of the terminals.”
CK Hutchison called the high court’s ruling and the government’s terminal takeover and scrapping of the concession “unlawful.” The company said none of the government’s actions were advised to or coordinated with PPC.
The operation of both ports and the wider role of the Panama Canal have been put under the microscope as another proxy battle in the trade war between the U.S. and China since President Donald Trump returned to the Oval Office last January. Just ahead of his inauguration, the president said the U.S. would “take back” the waterway from Panama on assertions that China had too much influence on its operations.
In March, Trump appeared to get a massive win when CK Hutchison sold off 43 ports, including the Panama Ports, to a consortium including MSC and U.S. hedge fund BlackRock for $22.8 billion.
China objected to the deal, with the country’s top antitrust regulator launching a probe into the acquisition that helped delay its completion throughout 2025. The country had sought to include a Chinese investor in the transaction, before later threatening to block the deal all together if state-owned ocean carrier Cosco Shipping was not given a controlling stake.
While the acquisition was largely on thin ice due to China’s objections, multiple domestic lawsuits ended up being what derailed the deal.
Two attorneys and Panama’s comptroller general filed separate suits with the Supreme Court challenging the constitutionality of Hutchison’s extension to operate the twin ports on various claims, such as a failure to share revenue agreed upon in the contract.
Panama’s attorney general backed the first suit, calling Hutchison’s partnership unconstitutional, stating that the country improperly agreed to transfer exclusive rights of Panama to a foreign actor.
Under the Supreme Court’s ruling, CK Hutchison no longer has control to sell the ports to MSC and BlackRock, or any other entity.
On Monday, Hutchison said it was communicating with legal advisors on pursuing national and international legal action against Panama and other third parties. The Hong Kong-based company earlier filed notice of international arbitration against Panama and warned APM Terminals that any takeover without its consent would lead to legal action and claims for damages.
Hong Kong’s government condemned the ruling and the decree on Tuesday, saying it has “lodged a strong protest” with Panama’s ambassador to the special administrative region.
“The forceful takeover of the two ports by the Panamanian government yesterday gravely damaged the legitimate rights and interests of the Hong Kong enterprise and undermined the spirit of contracts,” the statement read.
The government also said the ruling and action have “sabotaged Panama’s creditworthiness and gravely undermined international trade rules.”
