Panama’s Supreme Court late on Thursday annulled key port concession contracts held by a subsidiary of Hong Kong–based CK Hutchison, throwing the future ownership of several Panama Canal terminals into doubt and potentially derailing plans to sell the assets.
Panama Ports Company, a CK Hutchison unit, has operated container terminals at the Pacific and Atlantic entrances to the Panama Canal since the 1990s, separate from the canal’s waterway operations.
The ruling could disrupt CK Hutchison’s proposed $23 billion sale of dozens of ports worldwide—including the Panamanian terminals—to a consortium led by BlackRock and Mediterranean Shipping Company (MSC).
CK Hutchison did not immediately respond to a Reuters request for comment. Its Hong Kong–listed shares fell 5.5% on Friday, marking the company’s largest single-day decline in nine months.
In a statement, the Supreme Court said that after “extensive deliberation,” it found the laws and administrative acts underpinning the concession contracts between the Panamanian state and Panama Ports Company—covering the development, construction, operation and management of the Balboa and Cristobal terminals—to be unconstitutional.
The decision comes amid intensifying U.S.-China rivalry over global trade routes and is widely viewed as a diplomatic win for Washington. U.S. President Donald Trump has sought to limit Chinese influence around the Panama Canal, which handles about 5% of global maritime trade.
BlackRock and MSC, the leading bidders for the ports, did not immediately respond to requests for comment.
Trump had previously welcomed the proposed sale—particularly of the Panamanian assets—as a victory, arguing it would place the strategically important terminals under majority U.S. ownership. China, however, had threatened to block the deal, saying it did not serve its national interests. Beijing had pushed for state-owned shipping giant COSCO to take a controlling stake in the acquisition, sources previously told Reuters.
CK Hutchison had been awaiting the Supreme Court’s ruling after Panama’s attorney general declared the contracts unconstitutional. Critics of the concessions, which were extended in recent years, have argued that they were unfavorable to Panama.
The court’s decision could force the government to overhaul the legal framework governing port concessions and potentially launch new tenders for operating the terminals.
Maintaining uninterrupted port operations is crucial for global shipping lines that depend on Panama as a key transshipment hub, where cargo is transferred between vessels serving multiple trade routes.
In July, Panamanian President Jose Raul Mulino said public-private partnerships could take over the two ports if the court invalidated the contracts. Analysts have said Panama Ports Company is likely to pursue international arbitration following the ruling.