(Yicai) Aug. 20 -- CK Hutchison Holdings has initiated an international arbitration against the Panamanian government, seeking USD1.5 billion in claims, after its forcible takeover of the Hong Kong-based conglomerate’s port assets in the country.

After its attempts to seek resolution failed, CK Hutchison commenced international arbitration proceedings against the Republic of Panama for its breaches of an investment protection treaty arising from a series of measures by Panama in 2025 and 2026, culminating in Panama's termination of the concession contract for the ports of Balboa and Cristóbal and takeover of the port terminals, the conglomerate owned by Hong Kong's reaches person Li Ka-shing announced today.

"The company is seeking damages of more than USD1.5 billion for the destruction of its investments in Panama," CK Hutchison added.

"The board of directors strongly disagrees with the measures taken by Panama in violation of the treaty," CK Hutchison noted. "The company will continue to seek resolution with Panama while pursuing to the utmost all of its rights and remedies under the treaty and international law."

In late February, Panama made direct physical entry into the terminals at Balboa and Cristóbal operated by CK Hutchison's subsidiary Panama Ports, taking over administrative and operational control of the terminals and excluding representatives of Panama Ports from the terminals. The move followed a decision in January by the Supreme Court of Justice of Panama denying Panama Ports' operating rights to the terminals that connect Atlantic and Pacific trade routes.

CK Hutchison secured a 30-year operating concession for the Balboa and Cristóbal ports, located at opposite ends of the Panama Canal, in 1997 and renewed it in 2021 through 2047. Last year, the two ports handled 2.7 million and 1.2 million containers, respectively, accounting for 39 percent of the total container throughput of Panama's five major ports, according to local authorities.

In March last year, amid pressure from US President Donald Trump on national security grounds, CK Hutchison announced plans to sell its major global port assets, including those in Panama, to a consortium led by US asset management giant BlackRock for USD19 billion.

In July last year, CK Hutchison said it would invite investors from the Chinese mainland to join the consortium as important members and would not proceed with any transaction before obtaining approval from all relevant regulatory authorities and departments.

CK Hutchison's shares [HKG: 0001] rose 0.4 percent to HKD69.80 (USD8.90) apiece as of lunch break today, after opening 2.4 percent up.

Editor: Futura Costaglione