After Losing Ports in Panama Hong Kong Government Expresses ‘Strong Protest’
This Monday, Panamanian authorities took control of the aforementioned ports, two of the five located around the Panama Canal.
Hong Kong’s government on Tuesday conveyed its “strong protests” to the Panamanian consul in the semi-autonomous Chinese region after authorities in the Central American country took control of two ports held by the local group CK Hutchison following an ‘unappealable’ court ruling. “The Hong Kong government expresses its strong disagreement and opposition to the forced takeover by the Panamanian government of two ports” operated near the Panama Canal by PPC, a subsidiary of CK Hutchison, the government said in a statement published today on its website.
This Tuesday, a day after Panama took control of the ports of Balboa and Cristóbal, the local Secretary of Commerce and Economic Development, Edward Yau, forwarded the aforementioned protest to the top envoy of the Central American country in Hong Kong. According to the authorities of the former British colony, the decision by the Panamanian Supreme Court to revoke the concession to PPC – in force since 1997 – constitutes “a disregard for the facts and a breach of trust”, while also “violating the spirit” of the aforementioned contract.
“The Hong Kong Government condemns this flagrant act,” the document continues, and demands that Panama “respect the spirit of the contracts, provide a fair and equitable business environment for companies and ensure that their legitimate rights and interests are not interfered with.” “The Panamanian government’s disproportionate decision and actions have damaged the country’s credibility and seriously undermined the rules of international trade,” the Hong Kong government stated.
“Illegal Takeover”
This Monday, Panamanian authorities took control of the aforementioned ports, two of the five surrounding the Panama Canal and handling 38% of the total containers managed by the country’s port system, which will now be temporarily in the hands of subsidiaries of the Danish Maersk and the Swiss MSC. PPC considers the “illegal takeover” of the ports to be the “culmination of the illegal campaign that the State initiated a year ago directed against PPC, its investors and its concession contract,” and holds Panama responsible for “any harm or damage caused by its confiscatory actions.”
The Hong Kong subsidiary of CK Hutchison stated that it reserves “all legal rights and remedies against the State”; earlier this month it announced the start of arbitration proceedings against Panama at the International Chamber of Commerce (ICC), a claim that would amount to $2 billion, according to a company spokesperson. Panama’s Supreme Court annulled the concession to PPC in response to two lawsuits filed last July by the comptroller general, Anel Flores, against the contract, which he described as “onerous” and harmful to the nation’s interests. Following criticism from US President Donald Trump of “Chinese influence” on the Canal, CK Hutchison had agreed last year to transfer the concession to a consortium led by asset manager BlackRock, but the transaction was halted by Beijing as part of a geopolitical battle with Washington.
