CK Hutchison Holdings announced that Panamanian authorities have physically taken control of its port terminals at Balboa and Cristóbal and terminated the concession contract effective February 23.
In a voluntary announcement, the company stated that following a Supreme Court ruling published in Panama's official gazette on February 23, an executive decree ordered the state to occupy all movable property of the company's subsidiary, Panama Ports Company (PPC). Representatives of the Panamanian state entered the terminals and took over administrative and operational control. PPC ceased all operations at the two ports the same day.
The company said it has been advised that the ruling, the executive decree, and corresponding actions are inconsistent with the relevant legal framework and the law that approved the concession contract.
The board said it strongly disagrees with the ruling, decree, and actions, and intends to take all legal steps properly available to protect the Group's interests, including recourse to additional national and international legal proceedings.
This follows an earlier announcement on January 29 that Panama's Supreme Court had declared unconstitutional Law No. 5 of January 16, 1997, which approved the concession contract that had been the basis for PPC's operations at the two ports for nearly three decades. PPC commenced arbitration proceedings against the Republic of Panama on February 3 under ICC rules.
