The port concessions held by Hutchison Ports subsidiary Panama Ports Company (PPC) in Balboa and Cristobal on the Pacific and Atlantic entrances of the Panama Canal have been in the spotlight as part of claims by US President Donald Trump that the waterway is under Chinese control.

With parent company CK Hutchison headquartered in the Chinese Special Administrative Region of Hong Kong, the Trump administration believes that in a time of conflict the Chinese government could order the port operator to block access to the Canal. When US State Department Marco Rubio visited Panama recently he made it clear the status quo was unacceptable.

The 25-year concession to Hutchison’s PPC was granted in 1997 and extended for a further 25-years in 2021.

In early February two Panamanian lawyers filed a complaint with the country’s Supreme Court to nullify the concessions on the basis that they were unconstitutional.

On 19 February Attorney General of Panama, Luis Carlos Gómez sent his opinion to the presiding judge of the Supreme Court of Justice (SCJ), María Eugenia López Arias concluding the concession was “unconstitutional”.

In his opinion Gomez said :“Based on the foregoing, I conclude that Law No. 5 of January 16, 1997, approving the contract to be signed between the State and Panama Ports Company, SA, for the development, construction, administration and management of port terminals” in the ports of Balboa and Cristóbal “is unconstitutional”, reported Newsroom Panama.

The contract was seen as having improperly transferring the rights of the Panamanian state and affects public welfare and interest, thereby affecting free competition and demand.

Following the charges of Trump Administration that the Canal was under Chinese control and threatening to take it back Panama announced an audit of PPC.

If the concession is indeed nullified it would break a contract that has some 20-years to run on it and which since 1997 Hutchison has invested over $2 billion in the two port facilities.