A subsidiary of Hong Kong’s CK Hutchison Holdings has commenced arbitration proceedings against Maersk A/S, accusing the company of working with Panama to take over its port operations on the Panama Canal, reports AP.

The Panama Ports Company (PPC) said in a statement dated April 7 that Maersk had “undermined” a contract giving the Hong Kong company operational control of ports at either end of the Panama Canal, in order to pave the way for a new operator affiliated with Maersk to take over the Balboa terminal.

The company said the arbitration will be held in London, but didn’t explain what remedy it was seeking. Company arbitration is a dispute resolution process in which a neutral third party decides corporate conflicts.

The Balboa port is one of two terminals along the strategic Panama Canal that have become a flashpoint in the intensifying rivalry between the U.S. and China in Latin America. Panama’s top court voided CK Hutchison’s contract to operate those two facilities in January amid pressure from President Donald Trump, followed by a forced takeover in February. 

Panama selected Maersk's APM Terminals unit to operate the Balboa port on the Pacific side of the canal until at least August 2027, and Mediterranean Shipping Co. unit, Terminal Investment, to operate the Cristobal port on the opposite side of the canal for that same period. The move was described as a temporary arrangement aimed at maintaining uninterrupted vessel traffic, as Panama takes bids for new permanent contracts.

In March, China Cosco Shipping Corp. suspended its services at Panama’s Balboa port, after Beijing warned of a “heavy price” for the Central American country’s forced takeover of the facility from Hong Kong conglomerate CK Hutchison Holdings Ltd. 

In January, CK Hutchison released a statement from PPC, argued the ruling that ended its contract “lacks legal basis.”

“Over 28 years of operation, PPC and its investor have invested more than $1.8 billion in infrastructure, technology, and human development—an amount multiple times the investment made by any other port operator in the country. These investments have generated thousands of direct and indirect jobs and have been determinant in establishing Panama as a globally recognized port and logistics hub, attracting the world’s leading shipping lines and generating positive impact for the entire nation.”

“The PPC concession contract was the result of a transparent international bidding process,” the January 29 statement continued. “From that time, PPC has complied with its contractual and legal obligations, including audits conducted by the State, always acting with complete transparency and a full willingness to cooperate.”