Hong Kong’s CK Hutchison Holdings Limited (CKHH) said on Thursday it has notified A.P. Moller-Maersk that any assumption by APM Terminals (APMT), an affiliate of A.P. Moller-Maersk, of operations of the two terminals without the agreement of CKHH will cause damages to CKHH, HPH and PPC, and will “result in recourse against APMT.”
Specifically, CKHH noted that Hutchison Port Holdings Limited (HPH) notified A.P. Moller-Maersk on Feb. 10 that any steps by APMT or any of its affiliates to assume the administration or operation of PPC’s ports at Balboa or Cristobal in any capacity for any period of time without the agreement of CKHH will cause damages to CKHH, HPH, and Panama Ports Company S.A. (PPC), an indirect subsidiary of CKHH, and result in legal recourse against APMT and/or its affiliates involved.
The move comes after Panama’s Supreme Court of Justice ruled against PPC, a member of Hutchison Ports and operator of the Balboa and Cristóbal port terminals, declaring the concession granted to Panama Ports Company to operate the ports at the Panama Canal “unconstitutional.”
Panama Ports Company, which runs the two port terminals under the concession contract since the 1990s, said that the Panamanian State declared and broadly deployed steps to take over the operations of PPC after the judicial press release.
Following the recent decision by Panama’s Supreme Court of Justice regarding the Balboa (Pacific) and Cristobal (Atlantic) terminals, the Panamanian State activated a technical operational transition plan aimed at ensuring the continuity of port activities at the ports of Cristóbal (Atlantic) and Balboa (Pacific).
Last month, the APM Terminals -part of A.P. Moller-Maersk- confirmed its willingness to assume the temporary operation of both terminals.
According to CKHH, for nearly three decades – law no. 5 of January 16, 1997 – has been the basis for the concession contract and operations of PPC at the ports of Balboa and Cristóbal, Panama. CKHH considers a determination purporting that law is unconstitutional to be unlawful.
PPC commenced arbitration against Panama on February 3 pursuant to the applicable concession contract and the rules of arbitration of the International Chamber of Commerce.
CK Hutchison, a port investor, developer and operator, said it will continue to consult with its legal counsel regarding all available recourse including additional national and international legal proceedings against Panama in this matter.
However, CKHH said it remained committed to ensuring that PPC will take all steps reasonably available to protect the employees who participate in its operations, to avoid disruptions to port operations, as well as customers and suppliers, and to facilitate the flow of vessels and cargo transiting the Panama Canal, provided that the actions of the Panama Supreme Court and the Panamanian State permit.
