Panamanian President José Raúl Mulino has vowed to uphold a ruling by his nation’s top court that voided a contract allowing Hong Kong-based CK Hutchison Holdings to operate ports serving the Panama Canal.
Mulino rejected threats from the Chinese regime that the Central American country would pay “heavy prices” for adhering to the decision.
“Panama is a dignified country and will not allow itself to be threatened by any country on earth,” Mulino said at a briefing on Feb. 5.
He said the concession to operate two ports will “never again” be granted to a single company.
On Jan. 29, the Supreme Court of Panama voided a contract allowing Hong Kong’s CK Hutchison Holdings to operate two ports, one at each end of the Panama Canal.
The legal decision was viewed as a win for U.S. President Donald Trump, whose administration has sought to counter the influence of the Chinese Communist Party (CCP) over the waterway, which is vital for global trade.
U.S. Secretary of State Marco Rubio hailed the ruling as an encouraging step, while the Chinese regime’s foreign ministry and the Hong Kong government voiced strong opposition.
In a Feb. 3 commentary published on Chinese social media platform WeChat, the Hong Kong and Macao Affairs Office, a unit of the Chinese regime, warned that the Panamanian authorities must “recognize the situation” and “correct their course.”
“If persisting in the current course there will be a heavy price to pay, both politically and economically,” it stated.
Mulino, speaking to reporters, highlighted the significant difference between an economy controlled by the CCP and Panama’s democratic institutions.
He said the court’s decision is final and must be executed.
Mulino made the remarks hours after he said his government would take “appropriate actions” in response to Beijing’s threats.
“Panama is a state governed by the rule of law and respects the decisions of the judiciary, which is independent of the central government,” he wrote on X on Feb. 4, noting that the foreign ministry will issue a formal statement regarding the warning from Beijing.
Arbitration
CK Hutchison said on Feb. 4 that its subsidiary, Panama Ports, has commenced arbitration proceedings against Panama under the rules of the International Chamber of Commerce.
Panama Ports, which is 90 percent owned by CK Hutchison, has managed the Balboa and Cristóbal ports—the main terminals at the Panama Canal’s Pacific and Atlantic entrances—since the 1990s, and in 2021, renewed a concession for 25 years.
Aerial view of the Port of Balboa in Panama City, taken on Jan. 30, 2026. (Martine Bernetti/AFP via Getty Images)
Panama’s high court determined on Jan. 29 that the terms of the contract under which Panama Ports operates the Balboa and Cristóbal terminals are unconstitutional.
CK Hutchison stated that its subsidiary was advised that the Panama court ruling and the related actions by the Panamanian government concerning the company’s port operations are “inconsistent with the relevant legal framework and the law that approved the concession contract.”
“The Group continues to consult with its legal counsel and reserves all rights, including recourse to additional national and international legal proceedings in the matter,” the conglomerate said in a filing at the Hong Kong Stock Exchange.
It remains to be seen what impact the arbitration might have and how long the proceedings could last.
The two Panama Canal ports are at the heart of CK Hutchison’s agreement to sell its global port assets, which span 43 ports across 23 countries, to a BlackRock-led consortium.
Shortly after the $22.8 billion deal was made public in March 2025, the regime’s top market regulator announced that it would review the transaction. China’s state media also unleashed a torrent of critical articles denouncing CK Hutchison.
Under pressure from Beijing, the Hong Kong-based conglomerate said in July 2025 that it planned to bring in a “major strategic investor” from mainland China as a “significant member” of the consortium.
At a Feb. 5 briefing in Beijing, when asked about CK Hutchison’s decision to pursue arbitration, Chinese foreign ministry spokesperson Lin Jian said Beijing will “firmly defend” the legitimate rights and interests of Chinese companies.
Lin was also asked about a Bloomberg report stating that China is instructing state firms to halt talks on new projects in Panama as part of the CCP’s broader retaliation. The report, citing people familiar with the matter, states that Beijing’s decision could derail potential investments worth billions of dollars.
Without denying or confirming the report, Lin stated that China’s stance on the issue involving certain Panama ports is “clear.”
APM Terminals, a unit of the Danish shipping giant Maersk, confirmed last week its willingness to temporarily operate the two ports on the canal at the Panamanian government’s request.
“This aims to mitigate any risks that could impact essential services for regional and global trade and provide support to Panama’s logistics hub,” APM Terminals said in a Jan. 30 statement.
Reuters contributed to this report.
