Panama Responds to Hutchison Calling Accusations “Scandalous”

The back-and-forth between China, Panama, and CK Hutchison heated up as Panama’s President, Jose Raul Mulino, met the press on Thursday in his weekly session. He dismissed the accusations made by the Panama Ports Company (PPC) and CK Hutchison in the ongoing dispute resulting from Panama's annulment of the Chinese company’s long-standing concession to operate the port terminals in Balboa and Cristobal.

PPC at the beginning of the week asserted that Panama had missed the filing deadline for its international arbitration. Among the reasons, it said Panama did not have international lawyers. Mulino dismissed the accusation, calling it “outrageous and a lie.” He said Panama has appointed international lawyers who will defend against the claims. PPC has said it will seek at least $2 billion in damages.

The company and China have repeatedly made claims that Panama was acting unlawfully and not respecting its contracts. PPC also asserts that Panama raided a storage unit and took proprietary materials and will not return them.

Mulino told reporters the company’s recent statements are “fallacious and libelous.”

Panama took back both port terminal operations in February when the country’s Supreme Court finalized a ruling that said the laws establishing the 1997 concession and a no-bid 25-year renewal in 2021 were unconstitutional. The country’s controller general had initiated the court case after an audit that it said showed irregularities.

Panama asserted the state had lost as much as $1.2 billion in revenue due to the irregularities, insufficient payments, and tax exemptions. Hutchison asserts it invested at least $1.7 billion over the life of the concession on modernization and operation of the terminals at each terminus of the Panama Canal, as well as training.

Media reports have said Panama opened a new investigation into the business after taking back the two ports. It awarded temporary contracts to Maersk’s APM Terminals and MSC’s Terminal Investment Limited (TiL) for the operation of the terminals until a new tender can be conducted. It reports that both ports are operating normally and at capacity after a smooth transition.

The Panama Ports Company and Hutchison have said they asked for discussions to resolve the issues while accusing Panama of conducting a year-long campaign against the company. Panama on Thursday said it was the company that had refused to cooperate, concealed information, and obstructed coordinated transactions.

Hutchison has vowed to continue to pursue all legal courses of action against Panama. The international arbitration is expected to run for years. China also appears to be retaliating against, telling other companies not to do business with the country, ordering inspections of Chinese-flagged ships in Chinese ports, and COSCO has suspended its operations at the Port of Balboa.

The United States has celebrated Panama’s taking back the terminals. Donald Trump last year had repeatedly said China was running the Panama Canal and called for action, saying otherwise the U.S. would take back the canal.