Feb 12 : Hong Kong’s CK Hutchison said on Thursday it has notified Panama of an investment-protection treaty dispute after A.P. Moller–Maersk signaled it is willing to temporarily take over management of the Balboa and Cristobal terminals.
The move comes after Panama’s Supreme Court annulled key port contracts held by Panama Ports Company S.A. (PPC), a CK Hutchison subsidiary in late January, leaving the future ownership of some Panama Canal operations unclear and possibly upsetting CK’s plans to sell some terminals.
APM Terminals Panama, a Maersk subsidiary, said in late January it was willing to operate the Balboa and Cristobal terminals temporarily to prevent any impact on regional and global trade.
CK Hutchison said that such a takeover would result in legal recourse against APM Terminals unless it is done in agreement with the firm.
CK Hutchison said in its statement that Panama has provided no clear assurances about PPC’s continued operations at Balboa and Cristobal, and is still moving toward a forced shutdown or takeover, that is worsening disruption and harm.
PPC has held contracts since the 1990s to operate container terminals at the canal’s Pacific and Atlantic entrances, separate from the waterway’s operations.
The canal, one of the world’s busiest waterways, is vital to global trade and U.S. commerce, with about two-thirds of transiting cargo bound for or originating in North America.
The Hong Kong conglomerate added that if the Panama Supreme Court’s ruling, which has yet to come into force, is published and leads to PPC’s concession being terminated, PPC would be unable to keep operating its terminals at the two ports.
The status of the port contracts also casts uncertainty over billionaire Li Ka-shing owned CK Hutchison’s planned $23 billion deal to sell its global ports business, including the Panama terminals, to a consortium led by U.S. asset manager BlackRock .
