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Photo: iStock.com/Federico Barbieri
Two lawyers from Panama have filed a complaint seeking to revoke the contracts that allow Hong Kong-owned CK Hutchison Holdings to operate two ports at either end of the Panama Canal.
According to The Guardian, the suit was filed with Panama's Supreme Court, and alleges that the company's contract to operate the ports violates the country's constitution, and that CK Hutchison Holdings — owned by Hong Kong billionaire Li Ka-shing — has been granted preferential treatment by Panama's government. The firm's subsidiary Panama Ports Company has operated the ports of Balboa and Cristobal since 1997, and had its contracts automatically renewed for another 25 years in 2021.
The two ports have been the focal point of concerns voiced by President Donald Trump, who has alleged that China's influence in the region poses a threat to national security, as well as the free flow of trade through the Panama Canal. After meeting with Panama's President José Raúl Mulino on February 2, U.S. Secretary of State Marco Rubio called on Panama to make "immediate changes" to how it operates the canal. A day later, Mulino announced that he would be pulling his country out of China's Belt and Road Initiative, with U.S. sources also claiming that Panama agreed to allow U.S. military vessels to transit the canal free of charge.
If CK Hutchison Holdings' contracts are revoked, it could lead to a slew of legal challenges if the company can prove that the move was politically motivated. Allowing the U.S. military to freely move through the canal could also potentially be a violation of Panama's neutrality treaty, which mandates equal treatment of all countries transiting the waterway.
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