Panama Ports Company (PPC), a unit of Hong Kong-based CK Hutchison, said on March 24 that it has enlarged the damages sought in an international arbitration proceeding against the Panamanian state, taking the claimed amount to more than $2 billion. The company said it supplemented its case under the International Chamber of Commerce (ICC) arbitration rules after what it described as the state's illegal takeover of two port terminals and company property.
PPC noted that it operated the Balboa and Cristobal terminals adjacent to the Panama Canal for nearly three decades. The firm alleges Panamanian authorities unlawfully seized property, confiscated private and protected documents and denied the company access to files and computers both during and after the takeover of the facilities.
In a further statement, PPC said Panama had continued a campaign against the company and failed to provide coordinated access to property or to arrange compensation. The company also said that earlier in the month Panama missed a March 13 deadline to respond in the arbitration proceedings, attributing the delay to the state not having proper legal representation.
Panama's presidency and its maritime authority did not immediately reply to requests for comment on PPC's latest filing. The Panamanian president, Jose Raul Mulino, previously characterized accusations about setbacks in the arbitration process as "outrageous" and "a lie," and said the government had retained international counsel to defend the state's interests.
"Outrageous" and "a lie," Mulino said, while confirming international counsel had been appointed to represent Panama.
The legal dispute is part of a wider diplomatic and commercial rift tied to Panama's cancellation of port concessions, an action taken following a Supreme Court ruling in late February. The cancellation has come amid increased U.S. pressure aimed at limiting Chinese influence around the strategic Panama Canal, which handles about 5% of global maritime trade.
The controversy has also affected a separate commercial transaction. CK Hutchison's planned sale of a majority stake in its global ports business - a transaction valued at roughly $23 billion - has been complicated by the dispute. The company said this month that talks over the deal remain ongoing.
To maintain operations at the affected terminals while the dispute proceeds, Panama has issued temporary concessions lasting 18 months. Under those arrangements, APM Terminals is managing Balboa, and TIL Panama, a unit of Mediterranean Shipping Company (MSC), is handling Cristobal.
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