CK Hutchison Holdings Ltd. launched international arbitration proceedings against Panama on August 20, 2026, demanding more than $1.5 billion in damages. This action follows the loss of its investments in two crucial ports located on the Panama Canal. The company stated that attempts to resolve the dispute with Panamanian authorities were unsuccessful, and it accuses Panama of violating an investment protection treaty through measures taken in 2025 and 2026, which ultimately led to the termination of its concessions and the takeover of the Balboa and Cristobal terminals.
The Hong Kong-based conglomerate, founded by billionaire Li Ka-shing, expressed its strong disagreement with Panama's actions. It also issued a warning to shareholders and potential investors to exercise caution when dealing with its shares or other securities. This arbitration is the latest in a series of legal actions by CK Hutchison; its subsidiary, Panama Ports Company, had already launched a separate international arbitration earlier this year, seeking at least $2 billion for what it called an "illegal state takeover." Panama Ports is also pursuing arbitration in London against A.P. Moller-Maersk A/S regarding the facilities.
Shares of CK Hutchison saw an increase of up to 2.4% in Hong Kong trading on Thursday, with the stock having gained 32% this year as the Li family endeavors to accelerate asset sales and restructure its empire. The dispute has escalated into a geopolitical flashpoint amid the growing rivalry between the U.S. and China over trade and infrastructure. Beijing had previously cautioned Panama about paying a "heavy price" after the country annulled CK Hutchison’s contract following pressure from former President Donald Trump. In February, Panamanian President José Raúl Mulino ordered the temporary occupation of the terminals after the country’s Supreme Court deemed CK Hutchison's concession unconstitutional.
Bloomberg Intelligence analyst Denise Wong notes that such investor-state disputes over major port concessions typically take years to resolve, and initial claims are often significantly reduced through tribunals, negotiations, or out-of-court settlements. The two ports were initially part of CK Hutchison's planned sale of 43 terminals globally for over $19 billion. The loss of these Panama terminals is expected to have a minimal impact on the overall deal, as they represent only about 4% of its value. Winston Ma, an adjunct law professor at New York University, suggests that CK Hutchison’s legal actions are likely aimed at compelling Panama to negotiate, with a financial settlement being the most probable long-term outcome.
CK Hutchison alleges that a series of government actions, starting in early 2025, preceded the concession's cancellation. These actions included a new investigation into Panama Ports Company's operations, a reversal of Panama's long-held legal stance protecting the concession, and efforts to challenge the agreement's legal basis. The company attempted to resolve the dispute through consultations but failed to reach a meaningful resolution with the Panamanian government. The removal of Panama's operations resulted in an approximate HKD$496 million (US$63.2 million) loss in EBITDA for CK Hutchison over four months starting in February, despite stronger volumes across Asia helping to mitigate the decline in its ports and related services division, which saw a 1% fall in first-half throughput to 43.6 million TEU.
