Panama Hutch’ fight: More rounds expected

It is well known that President Donald Trump effectively triggered the legal review of the concessions after complaining of undue Chinese influence over the Panama Canal and threatening to take it back under US ownership. This led to Anel Flores, Panama’s Controller, undertaking an audit of the terminals which found alleged irregularities said to have cost the government US$300m since 2021 and around US1.2 billion since 1997. 2021 saw the concessions for the ports of Cristobal and Balboa extended for 25 years.

Not surprisingly, Hutchison has decried the decision emphasising that it “lacks legal basis” and is “diametrically opposed” to previous rulings and will “undermine the reputation of Panama as a reliable jurisdiction.” The Chinese government expressed similar views and has said it will act to protect the interest of Chinese businesses in Panama.

Subsequent to this Jose Raul Mulino, President of Panama, issued a statement offering reassurance that the terminal operations would continue and that the government would work with the Panama Maritime Authority and the Panama Ports Company, the Hutchison subsidiary, up to and through a transitional phase until a new concession process could be implemented. This was all said before the decision of the Supreme Court has become final, as per legal process.

Equally, it is interesting that the President, in the same statement, announced that APM Terminals would operate the two Canal-adjacent terminals during the transition phase. An announcement corroborated by a release from from the company itself expressing its willingness to fulfil this role subject to the Supreme Court’s ruling becoming final.

Predetermined?

The overall feeling generated by this chain of events and the allied results is that they were predetermined – a foregone conclusion arrived at largely due to pressure from the Trump administration. Equally, it is interesting to note how quickly the APM Terminals option to operate the two terminals surfaced following the Supreme Court announcement. The latter appears to suggest earlier dialogue between APM Terminals and the Panama government.

In 2025 APM Terminals acquired the Panama Canal Railway Company which operates the 76-kilometre single-line railway adjacent to the Panama Canal.

It is highly likely that further legal action will ensue. Hutchison has stated that it “permanently reserves all rights, including recourse to national and international legal proceedings.” Indeed, typically container terminal concession arrangements include dispute resolution measures such as international arbitration and while Panama says it is cancelling the concessions the investor community and others may take a dim view of it walking away from engagement with such a process.

Adding fuel to the fire, the Hong Kong local government – Hutchison is based in Hong Kong – has issued a statement underlining that it “opposes any foreign government using coercive, repressive, or other unreasonable measures.”