Conglomerate seeks $1.5 billion in damages from Panama

[AP Photo]

Hong Kong conglomerate CK Hutchison said yesterday it was seeking more than $1.5 billion in damages from Panama after the country seized two canal ports caught in the crosshairs of U.S.-China tensions.

CK Hutchison said in the statement that it had begun new arbitration proceedings against Panama and alleged that the Central American country had breached an investment protection treaty through “sovereign acts that targeted a decades-old ports concession” in a “state attack campaign” on the company’s assets in the Central American country.

Panama’s government in February seized the Balboa and Cristobal ports, located on each end of the Panama Canal, after its Supreme Court that a concession held by CK Hutchison’s subsidiary to run the two ports was unconstitutional.

The two ports at each end of the Panama Canal became part of U.S.-China tensions since Donald Trump’s return to the White House last year after he alleged China of “running” the canal.

The Panama Canal is managed and owned by Panama. But CK Hutchison’s subsidiary Panama Ports Company had run the two ports on the canal from 1997 and had renewed its concession for 25 years in 2021.

Beijing and Hong Kong had hit back at Panama over its takeover of the ports.

CK Hutchison, controlled by the family of Hong Kong’s richest man Li Ka-shing, last year announced an initial $23 billion deal to sell its global ports business, including the two Panama ports, to a consortium involving U.S. investment firm BlackRock. But the deal had made little progress under geopolitical tensions and legal challenges among China, the U.S. and Panama.

In March, Panama Ports Company had separately sought at least $2 billion in compensation from Panama over its takeover of the ports which it said was unlawful under international arbitration proceedings. CK Hutchison said the actions were making progress.

CK Hutchison added that Thursday’s new proceedings were focused on its treaty rights, which were distinct from Panama Ports Company’s contract rights in the earlier arbitration proceedings.

In April, the subsidiary also launched arbitration proceedings against Danish shipping and logistics group Maersk after it took over some of its port operations in Panama. Maersk said at the time that it did not believe it was liable for the claims. MDT/AP