The company stated in a press release that “the arbitration proceedings are based on a long-term contract designed to promote a collaborative business approach, through the exclusive use of PPC’s port terminal operations in Panama and access to a range of PPC’s operational facilities and information.”
Maersk “breached the contract and aligned itself with the Republic of Panama as part of its state-led campaign against PPC and a plan to replace it through an intervention that installed new port operators,” according to PPC.
On January 30, the Supreme Court of Panama annulled the concession awarded to PPC, allowing the state to take control of the ports of Balboa (Pacific) and Cristóbal (Atlantic).
In this context, on February 23, the Panama Maritime Authority (AMP) handed over the transitional operation – for a period of up to 18 months – of the Port of Balboa to APM Terminals, a subsidiary of Maersk, and that of the Port of Cristóbal to Terminal Investment Limited (TiL), the port arm of the Mediterranean Shipping Company (MSC).
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The company maintained that, on that same day, February 23, it was forced out of its operations through “extreme executive measures,” and that the concession for the Balboa terminal was awarded to an operator linked to Maersk, which allegedly used PPC’s operational facilities and information.
The final decision against the concession granted to PPC – awarded in 1997 and renewed in 2021 – came after years of complaints about the contract for alleged harm to the state, many of which were formally filed with the relevant authorities but without success, leading to accusations of corruption.
The case also comes amid pressure from the United States, which has denounced China’s alleged influence over the Canal due to Hutchison’s presence in nearby ports, as well as from Beijing, which prevented the Hong Kong conglomerate from selling approximately 40 terminals worldwide – including those in Panama – to a consortium led by the U.S. asset manager BlackRock.
The arbitration, the statement added, will take place in London and, according to the company, is independent of other legal actions filed against the Panamanian government, which it accuses of engaging in “breach of contract and anti-investor” conduct.
“PPC will vigorously defend its claims in the arbitration against Maersk and its claims against Panama, as well as other rights and remedies,” the statement reads.
PPC and CK Hutchison recently announced that they have expanded their claims in the international arbitration proceedings against the Panamanian government to more than $2 billion (€1.7 billion).
