A subsidiary of Hong Kong conglomerate CK Hutchison on Tuesday said it filed an arbitration against shipping giant Maersk, accusing the Danish group of seeking to replace its operations in the Panama Canal.

In a statement, Panama Ports Company (PPC) said Maersk broke a long-term contract by siding with the Panamanian government to help remove PPC from its operations at the Balboa port and replace it with a Maersk-affiliated operator.

"Maersk undermined the contract and aligned with the Republic of Panama in connection with its State campaign against PPC and scheme to replace it through a takeover that installed new port operators," PPC said.

The company said the arbitration would be held in London, but didn't explain what remedy it was seeking.

Neither Maersk nor the Panamanian government commented on the latest development.

Panama's Supreme Court in late January invalidated the legal framework ⁠supporting the 1997 concession granting PPC the right to operate the Pacific-facing Balboa and Atlantic Cristobal terminals on either side of the canal.

Panama declared in February that a Maersk subsidiary, APM Terminals, would operate the port of Balboa, and that Terminal Investment Limited, owned by the logistics giant MSC, would manage the port of Cristobal.

PPC said in late March it had widened the international arbitration against Panama, and its damages claim had now risen to more than US$2 billion.

The Panama Canal, which connects the Atlantic and Pacific oceans, handles about 40 percent of US container traffic and five percent of world trade. (Agencies)



Edited by Tony Sabine