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Panama’s president said ports at each end of the Panama canal would operate as usual after the country’s supreme court ruled the concession held by a subsidiary of a Chinese company was unconstitutional.
The court’s decision on Thursday, which helps US attempts to block any Chinese influence over the strategic waterway, immediately drew a sharp rebuke from Beijing.
José Raúl Mulino, Panama’s president, said on Friday that until the court’s ruling was executed maritime officials would work with Panama Ports Company (PPC), a subsidiary of Hong Kong’s CK Hutchison, to ensure continuing operations.
Once the concession was formally ended, a subsidiary of the Danish logistics company AP Moller-Maersk would operate the ports in a transitional phase until a new concession could be awarded, Mulino said.
“Panama moves forward, its ports will continue operating without interruption and we will continue serving the world as the logistics centre of excellence that we are,” Mulino said in a recorded video address.
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 canal one of its priorities in the hemisphere. Panama was Marco Rubio’s first overseas stop as US secretary of state.
Despite the insistence by Panama’s government and the canal authority that China had no influence, Rubio made clear that Washington viewed the operation of the ports as a national security issue. Donald Trump, the US president, has said Panama should return the canal to US control.
The court’s brief statement gave no guidance on what would happen to the ports next, or any timescale.
PPC said it had not been notified about the decision and insisted its concession was the result of transparent international bidding.
It said in a statement that the ruling lacked “legal basis and jeopardises not only PPC and its contract, but also the wellbeing 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 it reserved all rights to proceed legally in Panama or elsewhere but gave no more details.
The Hong Kong government firmly rejected the ruling, saying it strongly opposed any foreign government using coercive, repressive or other unreasonable means to seriously harm the business interests of Hong Kong enterprises. It said the Panamanian government should respect the spirit of contracts and provide a fair business environment.
“Given the current situation in Panama, Hong Kong enterprises should carefully review their existing and future investments there,” it said.
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.
