Panama Court Rules Hong Kong Canal Operation Unconstitutional

Key Facts

• January 29, 2026: Panama Supreme Court ruled contracts with Hong Kong subsidiary unconstitutional.
• Two ports at Panama Canal ends operated by CK Hutchison Holdings’ local subsidiary since 1997.
• Contract renewed in 2021; challenged by Panama audit authority in July 2025.
• Court cited contracts favor private interests over public benefit.
• Former U.S. President Trump claimed China controls Panama Canal, vowed U.S. reclaim.
• CK Hutchison negotiating sale of 43 port operations to U.S. consortium; Chinese investors involved.
• Sale talks stalled due to court ruling; President Laurentino Cortizo announced open process for new operator.
• Danish shipping giant subsidiary to manage ports temporarily post-ruling.
• U.S. Secretary of State Rubio welcomed ruling; China’s Foreign Ministry vowed to protect Chinese firms’ rights.
• Hong Kong government strongly opposed ruling, condemning foreign pressure on local business rights.

Summary

The Panama Supreme Court declared unconstitutional the contracts between the Panama government and a Hong Kong company subsidiary operating two key ports at the Panama Canal. This decision supports the Trump administration’s claims that China controls the canal, a vital maritime trade route. The ports have been managed by CK Hutchison Holdings’ local subsidiary since 1997, with a contract renewed in 2021. Panama’s audit authority challenged the contract in 2025, leading to the court ruling that prioritized private over public interests. The ruling complicates ongoing negotiations for selling port operations to a U.S.-led consortium, which also includes Chinese investors. Panama’s President Cortizo announced plans for an open selection of a new operator, with a Danish shipping company temporarily managing the ports. The U.S. government welcomed the ruling, while China and Hong Kong governments strongly opposed it, emphasizing protection of legitimate business rights against foreign pressure.