CK Hutchison initiates arbitration against Panama, claiming over $1.5 billion in damages due to investment treaty violations.
CK Hutchison Holdings Limited has formally initiated international arbitration proceedings against the Government of Panama, citing violations of investment protection treaties and seeking damages in excess of USD 1.5 billion.
The company confirmed in an official announcement that, following repeated attempts to resolve the dispute through negotiation, it has elected to pursue international arbitration under the applicable investment protection treaties in order to safeguard its legitimate interests in Panama and seek redress for losses sustained to its investments.
At the center of the dispute are the Balboa and Cristobal port terminals, operated by Hutchison's Panama Ports Company at either end of the Panama Canal. In January of this year, Panama's Supreme Court ruled that the concession agreements governing the two terminals were unconstitutional. The Panamanian government subsequently assumed control of both facilities, placing them under the temporary operational management of Maersk and Mediterranean Shipping Company, respectively.
Panama Ports Company had previously filed a separate international arbitration claim against the Panamanian government on the same grounds, seeking damages exceeding USD 2 billion. CK Hutchison's decision to initiate its own arbitration proceedings in its capacity as a direct shareholder represents a further escalation of the legal dispute between the two parties.
In its official announcement, CK Hutchison stated that Panama Ports Company would continue to advance its arbitration proceedings in accordance with the concession agreement and the arbitration rules of the International Chamber of Commerce, in resolute defense of its rights. The Board of CK Hutchison has also registered its strong opposition to what it characterizes as unilateral measures by Panama that are contrary to treaty obligations, reaffirming the company's commitment to pursuing an appropriate resolution while reserving all legal rights and avenues for redress.
CK Hutchison and Panama Ports Company have now each initiated independent arbitration proceedings, advancing parallel legal remedies in respect of the same underlying dispute.
