Panama Supreme Court throws out China linked port contracts - A strategic win for America

January 30, 2026 – Panama City:

Panama’s Supreme Court has annulled long standing port operation contracts held by a subsidiary of Hong Kong’s CK Hutchison Holdings for terminals at both ends of the Panama Canal, calling them unconstitutional and in breach of national law. The ruling has immediate geopolitical and economic significance in the context of the U.S.–China rivalry over global trade influence.

Understanding the background

For nearly three decades, Panama Ports Company (PPC) — a subsidiary of Hong Kong-based CK Hutchison Holdings — has operated the Balboa (Pacific) and Cristobal (Atlantic) container terminals located at the entrances of the Panama Canal. These facilities are not the Canal itself but are critical logistics and transshipment hubs that support global maritime trade.

In 2021, a 25-year extension of the original concession was granted, without competitive bidding, according to critics and PPC continued control of these strategically placed assets.

The company also moved toward a $22.8 billion sale of its Panama ports and dozens of other terminal assets worldwide to a consortium led by U.S. investment firm BlackRock and Mediterranean Shipping Company (MSC), signalling a possible shift of control toward Western infrastructure players.

On January 30, 2026, Panama’s Supreme Court ruled the port concession agreements unconstitutional, citing:

• Irregularities in how the contracts were extended

• Lack of required legal and competitive processes

• Possible financial losses and tax issues for Panama

The decision effectively voids the existing contract and calls into question the future of CK Hutchison’s operations in these critical terminals.

While Panama’s president assured that port operations will continue uninterrupted during the transition period, the ruling opens doors for a re-bidding or restructuring of concession agreements.

A Victory for U.S. Geo-Economic Policy

The decision was widely celebrated in Washington as a win in the ongoing effort to counter Chinese influence in Latin American infrastructure. U.S. officials had long expressed concerns that China’s operational presence near the Canal could give it undue influence over global trade routes - a perceptions that played into broader trade and security policy debates.

With the previously planned sale to a BlackRock-led consortium, the ruling boosts the likelihood that Western (especially U.S.) corporate interests will control these strategic port facilities — reinforcing economic and logistical ties with Panama and the broader hemisphere.

China and Hong Kong authorities have strongly rejected the ruling, calling it harmful to foreign investment confidence and accusing Panama of capitulating to political pressure. 

Panama’s Supreme Court decision against CK Hutchison’s port concessions represents a major moment in 21st-century maritime geopolitics.