Panama's highest court late on Thursday annulled key port contracts held by Panama Ports Company, a subsidiary of Hong Kong-based CK Hutchison, ruling that the agreements were unconstitutional and leaving the future of the terminals that flank the Panama Canal uncertain.
The contracts in question, which date back to the 1990s, covered the operation of container terminals at both the canal's Pacific and Atlantic entrances. Those terminal operations are distinct from the canal's waterway administration.
The court's decision arrives amid intensifying U.S.-China rivalry over strategic trade routes. The Panama Canal handles about 5% of global maritime trade, and the ruling has been interpreted in some quarters as aligning with U.S. efforts to limit Chinese influence over key infrastructure - a policy emphasis pushed by President Donald Trump.
Critics of the long-standing contracts, several of which were extended in recent years, have argued that the agreements are unconstitutional and disadvantage Panama. By declaring the contracts invalid, the Supreme Court has created a legal opening that could force Panama to redraw the statutory or contractual framework that permits private parties to hold such port operations.
Practically, the ruling could prompt authorities to restructure the legal basis for port concessions and potentially re-open the process to award management of the terminals. The decision leaves operators, shippers, and other stakeholders facing a period of uncertainty about how terminal operations will be managed going forward.
The implications of the court ruling are not yet settled. The judgment establishes a constitutional finding but does not itself prescribe the precise administrative steps Panama will take to reconfigure port governance or whether a re-tendering will be pursued. For now, the status and administration of container handling at the canal's entrances remain unclear pending follow-up actions by government agencies and other authorities.