A general view of the Balboa Port in Panama City on the 23rd (local time) [Panama City AFP=Yonhap News]

The ruling by the Constitutional Court of Panama, which declared the contract granting port operating rights of the Panama Canal to Hong Kong-based CK Hutchison Holdings unconstitutional, was published in the Official Gazette on the 23rd (local time).

As a result, CK Hutchison has officially lost its port operating rights.

On this day, a 70-page ruling from the Constitutional Court of Panama (Official Gazette No. 30468), stating that the contract with the authorities regarding the port operating rights of Balboa Port (Pacific side) and Cristóbal Port (Atlantic side), which had been granted to Panama Port Company (PPC) since 1997, was unconstitutional, was published. Panama Port Company is a subsidiary of CK Hutchison.

Consequently, Panama Port Company has lost its rights to operate the two ports and access all movable assets inside and outside the terminals, including cranes and computer systems, as of this day.

The Office of the President of Panama, through a separate 5-page administrative order (Official Gazette No. 30468-A), designated the Panama Maritime Authority (Autoridad Maritima de Panama) as the entity responsible for the operation of the two ports.

CK Hutchison acquired the operation of Balboa Port and Cristóbal Port through a bid in 1997, under the management of Panama Port Company. The operating rights were extended through a renewal contract in 2021 until 2047 (for 25 years from 2022).

However, US President Donald Trump, shortly after taking office in January of last year, claimed that "the Panama Canal has fallen under Chinese influence" and declared that he would reclaim control of the Panama Canal, which was transferred in 1999 through a treaty between the two countries.

While the international community generally analyzes this as targeting CK Hutchison, CK Hutchison, owned by the Hong Kong magnate Li Ka-shing's family, is a private company unrelated to Chinese authorities.

CK Hutchison attempted to transfer its Panama Canal port operating business to a consortium of US-based asset management company BlackRock, Global Infrastructure Partners (GIP), and TiL Group (BlackRock Consortium) last year but was unsuccessful. Following the Constitutional Court's ruling last month, the company is now facing the prospect of withdrawing empty-handed, let alone a sale.

The Panamanian government, under President José Raúl Mulino, plans to temporarily entrust the operation and management of the two ports to a third company in accordance with a pre-arranged "emergency plan measure."

The temporary management company is reported to be the Danish global shipping company A.P. Moller-Maersk (Maersk). Local daily La Prensa Panama reported that Maersk could temporarily take over Balboa Port, while the Italian company MSC could potentially manage Cristóbal Port.

China's backlash is expected to continue.

Bloomberg News, citing anonymous sources, reported that "China is demanding that its state-owned enterprises halt negotiations on new projects in Panama," estimating the budget for potentially canceled projects at $1.4 billion (approximately 2 trillion won).

CK Hutchison is pursuing international arbitration proceedings against the Panamanian authorities and has also indicated the possibility of filing separate lawsuits, according to AP News.