Panama has taken control of the Balboa and Cristóbal container terminals from Hong Kong‑based Hutchison Ports after the country's Supreme Court issued a final ruling declaring the company's long‑standing concession unconstitutional.

The move, carried out on February 23, marks the most dramatic escalation yet in a year‑long dispute over the future of two of the Panama Canal's most strategic gateways.

Panama's government issued an executive decree authorizing the Panama Maritime Authority to "occupy" the terminals for reasons of urgent social interest, covering all movable property inside and outside the facilities. Officials said the state had "taken possession of its ports and guarantees the continuity of operations," following publication of the court's decision in the official gazette. 

Authorities also said interim operations would be maintained until a new tender process is completed, with the government emphasizing that the annulment of the concession restores state control over the sites after nearly three decades.

CK Hutchison denounces "illegal takeover" 

CK Hutchison, however, said the takeover was unlawful and amounted to a forced seizure. It said that the move came without transparency or coordination and went on to note that Panama's actions were "confiscatory."

According to the company, government representatives entered the terminals without notice, informed Panama Ports Company (PPC) that its concession "no longer exists," ordered operations to cease immediately, and instructed employees not to communicate with PPC under threat of criminal prosecution.

"CK Hutchison Holdings Limited has been informed that, on February 23, 2026 (Panama time), the Republic of Panama made direct physical entry into the terminals at Balboa and Cristobal operated by CKHH's subsidiary, Panama Ports Company, S.A. and took over administrative and operational control of PPC's terminals at the two ports, also excluding representatives of PPC from the terminals," it said in a statement, pointing out that the "takeover" of the two terminals reflects the culmination of a campaign by the Panama State against PPC and the concession contract over the past year. 

"Over a short period of time on the morning of February 23, the official gazette of Panama published the ruling of the Supreme Court of Justice of Panama regarding Law No. 5 of January 16, 1997, originally announced on January 29, 2026, and an Executive Decree issued by the President of Panama mandating an 'occupation' by the State of 'all movable property' of PPC, with the participation of all relevant organs of the State."

"Simultaneously, government representatives arrived without invitation to the terminals and informed representatives of PPC that the concession no longer exists and that PPC must cease operations, and instructed that PPC employees would be transferred out of PPC, must not communicate with PPC, and must comply with government instructions, under threat of criminal prosecution. The State now has control of the terminals," CK Hutchison added.
  

The company said the actions made it impossible to continue operating and that PPC halted all activities at both terminals on February 23.

"Based on the referenced publications, statements by officials, and the Panama State takeover of the terminals, CKHH understands that the concession granted to PPC for the operation of the terminals at the ports of Balboa and Cristobal was deemed to be terminated as of February 2026," CK Hutchison said.
  

It went on to noted that the ruling, decree and takeover "raise serious risks to the operations, health and safety" at the terminals. "CKHH considers the ruling, the Executive Decree, the purported termination of PPC's concession, and the takeover of the terminals to be unlawful."

"None of the actions by the Panama State were advised to or co-ordinated with PPC. The Panama State is responsbile for harm and damage caused by the confiscatory actions it has taken."

It added that PPC and CK Hutchison will pursue all available national and international legal remedies.

Panama Canal dispute

The dispute over the two Panama Canal terminals has unfolded against a wider backdrop of U.S.–China rivalry, with Panama increasingly pulled into the geopolitical cross‑currents.

Tensions sharpened last year after U.S. President Donald Trump accused China of "running the Panama Canal," prompting renewed scrutiny of Chinese‑linked infrastructure concessions across the region and pressure from Washington for Panama to revisit the legality of the 1997 contract awarded to Hutchison's Panama Ports Company.

Panama's Supreme Court added to that pressure in January when it struck down the law underpinning PPC's concession and voided a 2021 extension, leaving the port operations without a legal basis. The ruling came as CK Hutchison was preparing to sell the terminals to a consortium that included U.S. investment firm BlackRock — a move that drew swift objections from Beijing and ultimately stalled.

The government has said the annulment restores state control and that services at Balboa and Cristóbal will continue while new operating arrangements are developed, though it has not yet outlined a long‑term plan for the sites.

Just weeks earlier, CK Hutchison had warned Panama of possible legal action after the government moved to replace the company at the two canal ports following a Supreme Court ruling that voided the legal basis of its concession. Panama then tapped APM Terminals as temporary administrator for Balboa and Cristóbal.