Maersk to assume control of Panama Canal ports following court decision

Panama Court Invalidates Port Contracts Held by Hong Kong-Based Firm CK Hutchison

A court in Panama has ruled that contracts given to a Hong Kong-based firm, CK Hutchison, are unconstitutional. The ruling followed repeated threats from United States President Donald Trump that his country would seek to take over the waterway he claimed was effectively being controlled by China.

As a result of the court’s decision, the Panama Maritime Authority (AMP) announced on Friday that it will temporarily transfer control of two ports on the Panama Canal to Maersk Group. The company, part of the APM Terminals, will assume the role of “temporary administrator” for the Balboa and Cristobal ports.

The contract held by CK Hutchison was renewed in 2021 for 25 years, but the court ruled that it had “disproportionate bias” towards the Hong Kong-based company. The AMP stated that Maersk will take over from the Panama Ports Company (PPC), which has managed the ports since 1997.

The Panama Canal is an artificial waterway that handles about 40 percent of US container shipping traffic and 5 percent of world trade. It was built by the United States between 1904 and 1914, with control passing to Panama in 1999.

The decision was welcomed by Washington, but China’s Foreign Ministry spokesman Guo Jiakun stated that Beijing will take all necessary measures to protect the rights and interests of Chinese companies. The Hong Kong-based firm PPC expressed concerns about the ruling, stating that it “lacks legal basis” and endangers the welfare and stability of thousands of Panamanian families who depend on its operations.

The construction of the Panama Canal involved tens of thousands of workers, allowing ships to pass from the Pacific Ocean to the Atlantic without having to travel around the northernmost or southernmost ends of the Americas.

Source: Al Jazeera