PANAMA CITY: Panama's Supreme Court ruled late Thursday that the concession held by a subsidiary of Hong Kong's CK Hutchison Holdings to operate ports at either end of the Panama Canal is unconstitutional, an outcome that advances a US aim to block any influence by China over the strategic waterway.
The court's ruling followed an audit by Panama's comptroller, which alleged irregularities in the 25-year extension of the concession granted in 2021.
The Trump administration made blocking China's influence over the Panama Canal one of its priorities in the hemisphere. Panama was US Secretary of State Marco Rubio's first overseas stop as the United States' top diplomat.
Despite the insistence by Panama's government and the canal authority that China has no influence over its operations, Rubio made clear that the US viewed the operation of the ports as a national security issue for the US President Donald Trump had gone so far as to say Panama should return the canal to US control.
The court's brief statement gave no guidance on what would happen to the ports now.
CK Hutchison's subsidiary, Panama Ports Company, said it has not been notified yet about the decision but insisted its concession was the result of transparent international bidding.
It said in its statement that the ruling “lacks legal basis and jeopardises not only PPC and its contract, but also the well-being and stability of thousands of Panamanian families who depend directly and indirectly on port activity, but also the rule of law and legal certainty in the country.”
It said that it reserves all rights to proceed legally in Panama or elsewhere, but gave no more details.
In Beijing, China's foreign ministry spokesperson, Guo Jiakun, told reporters that China would take all necessary measures to safeguard the legitimate rights and interests of “the Chinese company,” without elaborating on the potential steps.
Political analyst Edwin Cabrera said once the parties are notified, the issue of what to do with the ports goes to Panama's executive branch, specifically the Panama Maritime Authority.