A subsidiary of Hong Kong conglomerate CK Hutchison said Panamanian officials had not responded to its lawsuit opposing the suspension of its Panama Canal operations because they had failed to hire lawyers.

A Panamanian court declared in January that a contract, which had allowed CK Hutchison unit Panama Ports Company (PPC) to manage the Pacific port of Balboa and Cristobal on the Atlantic since 1997, was “unconstitutional”.

PPC filed a lawsuit in February under the rules of the International Chamber of Commerce (ICC), and said this month that it was seeking at least US$2 billion in damages.

However, Panama did not file any responses to the arbitration by the original deadline of Mar 13 set by the ICC’s Court of Arbitration, PPC said in a statement issued on Monday (Mar 16) in Panama.

It said a country that respects foreign investors “does not disregard consultations and international dispute procedures”.

“Panama stated that it was not prepared and was not able to respond on time because it had not hired lawyers, was unfamiliar with the dispute, and needed time to develop a plan, to obtain a partial extension,” the PPC statement said.

Panama had also failed to resolve the broader issues involved, it said, which “suggests that Panama may eventually simply invent and announce more unfounded attacks in arbitration”.

Panamanian officials asked Chinese shipping giant Cosco this month to reconsider its decision to suspend its operations at the Balboa port because of the PPC suspension.
The Central American country has been caught up in broader tensions between Washington and Beijing, with US President Donald Trump last year claiming, without evidence, that China effectively runs the canal.

China had threatened Panama with payback after the court’s decision in January.

CK Hutchison said this month it had intensified its legal actions over the takeover by Panamanian authorities of the two Panama Canal ports it controlled.

It said it had also filed an administrative petition urging Panamanian officials to reconsider the executive action that “led to the occupation of facilities and confiscation of property”.

Authorities searched PPC’s office in Panama in late February, with the CK Hutchison unit describing the occupation and seizure of its property as acting “in disregard of the rule of law”.

Source: AFP