By Shirley Zhao
On August 20, 2026, CK Hutchison Holdings Ltd. filed for international arbitration against Panama, seeking over $1.5 billion in damages due to lost investments in two ports on the Panama Canal.
This action followed unsuccessful attempts to resolve the issue with Panamanian authorities, as stated by the company. CK Hutchison claims that Panama violated an investment protection treaty with actions taken in 2025 and the current year that led to the cancellation of their concessions and the seizure of the Balboa and Cristobal terminals.
Founded by billionaire Li Ka-shing, CK Hutchison expressed that its board "strongly disagrees" with Panama's decisions and has advised shareholders and potential investors to be cautious when dealing with their stocks or other securities.
This latest arbitration request adds to a series of legal challenges the Hong Kong company has launched over losing control in Panama. Earlier this year, its subsidiary, Panama Ports Company, initiated a separate arbitration against Panama, claiming at least $2 billion regarding what it called an "illegal state takeover." The company is also engaging in arbitration in London against A.P. Moller-Maersk A/S concerning the facilities.
Shares of CK Hutchison increased by up to 2.4% during trading in Hong Kong on Thursday. The stock has risen 32% this year, as the Li family works to accelerate asset sales and revamp their business portfolio.
The conflict has become a significant geopolitical issue amid the growing trade and infrastructure rivalry between the US and China. China previously warned that Panama would face serious consequences after panama canceled CK Hutchison’s contract for the ports due to pressure from President Donald Trump.
In February, Panamanian President José Raúl Mulino ordered the temporary occupation of the terminals after the country's highest court ruled against CK Hutchison's concession agreement.
According to Bloomberg Intelligence analyst Denise Wong, arbitration cases like this usually take a long time, as international disputes over major port contracts can take years to settle. Initial claims often end up being significantly reduced through tribunal negotiations or settlements.
Negotiating Table
The two ports were part of CK Hutchison’s plan to sell 43 terminals worldwide for over $19 billion. This deal has faced delays for over a year, partly due to tensions from US investment firm BlackRock Inc.'s involvement in the purchasing group. CK Hutchison later included Chinese state-owned companies, such as China Cosco Shipping Corp. and China Merchants Group, in the buying consortium.
All parties are awaiting clearer political guidance before moving forward with the sale. However, the loss of the Panama terminals is anticipated to have minimal effect on the overall agreement, as these facilities only represent about 4% of the deal’s total value.
Other countries have also ended concessions for private firms operating public infrastructure, sometimes leading to compensation disputes. For instance, Panama reclaimed land from a Chinese firm last year when the company failed to build a port as required under its concession.
In a similar case, Egypt's Damietta Port Authority canceled a concession given to a private consortium to run a container terminal in 2015. Although an international tribunal approved the consortium's claim for damages in 2020, Egypt's highest court later overturned this decision, and the case was eventually settled with a partial payout.
Legal actions by CK Hutchison are likely a strategy to push Panama back to the negotiating table, according to Winston Ma, an adjunct law professor at New York University.
“The most probable long-term outcome is a financial settlement between the parties,” he stated.