Panama lawsuit requests axing Hong Kong firm's canal concession

Two Panamanian lawyers filed a complaint Monday to cancel the concession of a Hong Kong-based company for operating two ports on the Panama Canal, following U.S. President Donald Trump's threats to seize the vital waterway.

A subsidiary of CK Hutchison Holdings -- owned by Hong Kong billionaire Li Ka-shing -- manages two of the canal's five ports, an arrangement in place since 1997 via a concession from the Panama government.

But Norman Castro, one of the lawyers in the case brought before the Supreme Court, told reporters the contract "violates what the constitution says in about 10 articles."

"After a detailed analysis of the contract... we decided that an action for unconstitutionality was the appropriate means" to challenge the concession, said Julio Macias, another lawyer behind the suit.

The complaint also accuses the Hong Kong subsidiary of not paying taxes and benefits due to a series of advantages that are allegedly against the law.

Panama Ports Company -- a CK Hutchison Holdings subsidiary -- currently manages the ports of Cristobal on the canal's Atlantic side and Balboa on the Pacific side.

That arrangement was automatically renewed in 2021 for another 25 years.

The case comes after Trump threatened to take back the canal -- built by the United States and handed to Panama in 1999 -- as he said China was effectively "operating" it.

But temperatures have lowered since Secretary of State Marco Rubio's recent visit to the Central American country, with Panama President Jose Raul Mulino announcing they will not renew participation in China's Belt and Road Initiative.

Following Trump's charges, Panama also announced an audit into the company.

CK Hutchison Holdings is one of Hong Kong's largest conglomerates, spanning finance, retail, infrastructure, telecoms and logistics.

© Agence France-Presse