Panama Ports Company Files Arbitration Case Against Maersk

Panama Ports Company (PPC), part of Hong Kong-based CK Hutchison, has initiated arbitration proceedings against Maersk, alleging the Danish shipping group attempted to take over its operations in the Panama Canal. This legal action comes in addition to a separate case Hutchison has already brought against the Panamanian government, following its decision earlier this year to cancel concessions for two terminals in the country.

“Maersk undermined the contract and aligned with the Republic of Panama in connection with its State campaign against PPC and scheme to replace it through a takeover that installed new port operators,” PPC said.

PPC confirmed that the arbitration will take place in London. It also clarified that the claim against Maersk is distinct from “ongoing steps by PPC to hold Panama to account for its anti-contract and anti-investor conduct”.

Two months ago, Panama announced that APM Terminals, a Maersk subsidiary, would take over operations at the port of Balboa. At the same time, Terminal Investment Limited, which is owned by Mediterranean Shipping Co, was selected to run the port of Cristobal. Both ports had been under Hutchison’s control since 1997.

The situation has also drawn attention from Chinese authorities. Following Panama’s move to revoke Hutchison’s concessions and transfer interim operations to subsidiaries of the world’s two largest container lines, officials in Beijing have responded behind the scenes. Representatives from MSC and Maersk were reportedly summoned to China’s Ministry of Transport last month. In addition, vessels flying the Panamanian flag are now facing increased inspections when entering Chinese ports, and state-owned shipping company COSCO has suspended all calls at both Balboa and Cristobal.