On Wednesday, April 8, the top diplomat of Panama stated that the Chinese Communist Party should respect Panama’s sovereignty and refrain from increasing inspections and detentions of Panamanian-flagged vessels after a ruling by a Panama court against the Hong Kong-based “Cheung Kong & Hutchison Industries Company” (CK Hutchison Holdings).
In January of this year, the Supreme Court of Panama declared a legal framework invalid which had authorized CK Hutchison Holdings through its subsidiary in Panama to operate two key port terminals near the Panama Canal. This ruling led to the Panamanian government revoking CK Hutchison’s operating rights and temporarily appointing APM Terminals and Terminal Investment Limited as operators for a period of 18 months.
Panama’s Foreign Minister, Javier Martinez Acha, expressed during a meeting in the Paraguayan capital of Asuncion that he hopes the surge in vessel detentions in March can return to normal levels swiftly.
He stated, “Due to this ruling, many Panamanian-flagged vessels in Chinese ports are facing increased inspections and detentions. Panama respects the legal sovereignty of all nations, and we only ask for equal treatment.”
On Tuesday, April 7, the Panama Ports Company (PPC) under CK Hutchison Group released a statement declaring that they have initiated arbitration proceedings against the global shipping giant A.P. Moller-Maersk in London regarding the takeover of a container terminal. The exact amount of claims is currently unclear.
The statement mentioned that the two parties had a long-term contract specifying the exclusive operational arrangement of the container terminal at the Panama Port by the Panama Ports Company. It alleged that A.P. Moller-Maersk violated the long-term cooperation agreement by siding with the Panamanian government, assisting in the takeover action, and facilitating the arrangement of a new operator to replace the Panama Ports Company.
Furthermore, the statement highlighted that on February 23, 2026, the Panamanian government forcibly expelled the Panama Ports Company and signed a concession agreement with a new operator at the Balboa Port container terminal, a subsidiary of Maersk. The new operator is currently utilizing facilities and data previously owned by the Panama Ports Company.
Moreover, the company mentioned in a statement on March 24 that they have filed an international arbitration lawsuit against the Panamanian government, with claims expected to exceed $2 billion.
Addressing the unjust detentions of Panamanian-flagged vessels by the Chinese government, U.S. Secretary of State Marco Rubio criticized the actions on April 2. He emphasized concerns regarding China’s use of economic means to undermine the rule of law in Panama.
Rubio stated, “Panama is a sovereign nation and an important partner in global trade. Actions by (China) to detain, delay, or otherwise impede the transit of vessels destabilize global supply chain stability, increase costs for businesses and consumers, and weaken confidence in the international trading system.” He reiterated that the United States supports Panama’s sovereign decisions and views it as a reliable business partner.
The Panamanian Ministry of Foreign Affairs expressed special gratitude on April 4 to the United States and other countries for their concern over the issue of Chinese ship detentions.
Data from Lloyd’s List Intelligence indicates a significant increase in the number of Panamanian-flagged vessels detained in Chinese ports after March, potentially reaching up to 100 vessels, with nearly 70 related cases since March 8.
On March 26, the United States Federal Maritime Commission (FMC) stated that such inspections were “far beyond normal” and they are closely monitoring the surge in detentions of Panamanian-flagged vessels in China.
In a statement, FMC Chairman Laura DiBella pointed out that China has significantly increased detentions of Panamanian-flagged vessels in Chinese ports under the guise of port state control.
She noted, “These enhanced inspections appear to be carried out under informal directives, seemingly as retaliation against Panama post the transfer of assets at the CK Hutchison ports. Given that Panamanian-flagged vessels hold a significant share in U.S. container trade, these actions may have significant commercial and strategic implications for the U.S. shipping industry.”