Panama’s government seized two major ports at the Panama Canal on Monday following a Supreme Court ruling that declared a decades-old concession unconstitutional, the Hong Kong-based operator said. The Panama Maritime Authority occupied the Balboa and Cristóbal terminals, which control access to one of the world’s most critical shipping routes, after government officials arrived and threatened criminal prosecution if the company did not comply.
The move is the culmination of a broader dispute over control of the canal that has become entangled in U.S.-China rivalry. The operator, CK Hutchison, was in the process of selling the ports to a consortium including U.S. investment firm BlackRock when China intervened to block the deal.
The seizure represents a significant reassertion of Panamanian control over critical infrastructure and signals a realignment away from Chinese interests toward U.S. influence. The ports handle container traffic essential to global commerce; uncertainty over operations could affect shipping schedules and costs across the Americas.
How the Seizure Unfolded
CK Hutchison, the Hong Kong-based operator of the Balboa and Cristóbal terminals since 1997, said government officials arrived and took over the ports Monday without advance notice or agreement. The company said it was threatened with criminal prosecution if it did not leave, and that it has received no compensation for three decades of investment in the infrastructure.
“The takeover of the ports by the Panamanian State is a culmination point of the unlawful campaign that the State launched a year ago targeting PPC, its investors and its concession contract,” the company said in a statement, using the abbreviation for Panama Ports Company, its operating subsidiary.
The move was authorized by a decree issued Monday that instructed the Panama Maritime Authority to occupy the ports “for reasons of urgent social interest.” The decree specifically named movable property to be seized, including cranes, vehicles, computer systems, and software.
The Court Ruling and Geopolitical Pressure
The seizure was triggered by a January ruling from Panama’s Supreme Court that struck down the 1997 law approving CK Hutchison’s original concession contract and invalidated a 2021 extension, stripping the company of any legal basis to continue operating the ports. The decision left the contract with no constitutional foundation after decades of operation. Panama’s government said it would ensure port operations continued and that job stability would be maintained during the transition.
The timing reflects a failed sale that had threatened to shift control of the ports further toward U.S. interests. CK Hutchison had been preparing to sell the terminals to a consortium that included BlackRock, the U.S. investment firm, but the Chinese government intervened and halted the deal before it could proceed. The failed transaction revealed the broader geopolitical stakes around the canal. President Donald Trump accused China last year of “running the Panama Canal,” framing the ports’ control as a matter of national security for the United States.
Transition to New Operators
Panama’s government announced that APM Terminals, a subsidiary of the Danish shipping and logistics conglomerate A.P. Moller-Maersk, would temporarily administer the terminals while the country prepares to award a new contract.
The arrangement leaves CK Hutchison with uncertain prospects. The company has initiated arbitration proceedings against Panama under the rules of the International Chamber of Commerce, though the timeline and outcome of such proceedings remain unclear. CK Hutchison also threatened to sue APM Terminals if it proceeds with operating the ports, though the Danish company responded that it is not a party to the legal disputes between Panama and the previous operator.
For shipping companies and cargo handlers, the transition introduces uncertainty about operations, staffing, and tariffs at two facilities that serve as gateways to the canal from the Pacific and Atlantic. The ports handle container traffic essential to commerce across the Americas. How smoothly operations continue during the handoff to APM Terminals and the eventual awarding of a new long-term concession remains to be seen.