CK Hutchison Holdings Ltd commenced international arbitration proceedings against Panama, seeking more than $1.5 billion in damages over the loss of its investments in two ports on the country’s strategic canal.

The move came after attempts to resolve the dispute with Panamanian authorities failed, the company said in a statement Thursday. CK Hutchison said Panama breached an investment protection treaty through measures taken in 2025 and this year that culminated in the termination of its concessions and the takeover of the Balboa and Cristobal terminals.

CK Hutchison, founded by the Hong Kong Special Administrative Region's billionaire Li Ka-shing, said its board “strongly disagrees” with Panama’s actions and warned shareholders and potential investors to “exercise caution” when dealing in its shares or other securities.

The latest claim adds to a flurry of legal action initiated by the Hong Kong conglomerate over its loss of control in Panama. Unit Panama Ports Company launched separate international arbitration against the Central American country earlier this year, seeking at least $2 billion over what it called the nation’s “illegal state takeover”. CK Hutchison is also pursuing arbitration in London against A.P. Moller-Maersk A/S over the facilities.

CK Hutchison’s shares rose as much as 2.4 percent in the Hong Kong SAR in Thursday trading. The stock has gained 32 percent this year amid the Li family’s efforts to accelerate asset sales and overhaul its empire.

ALSO READ: CK Hutchison vows to continue legal battle over Panama ports

In February, Panamanian President Jose Raúl Mulino ordered the temporary occupation of the terminals after the country’s top court ruled against CK Hutchison’s concession.

The arbitration cases are likely to take time, as investor-state disputes over major port concessions typically take years to resolve, according to Bloomberg Intelligence analyst Denise Wong. Initial claims are often scaled back significantly through tribunal haircuts, negotiations or a discounted out-of-court settlement, she added.

Negotiating table

The two ports had been included in CK Hutchison’s planned sale of 43 terminals worldwide for more than $19 billion in cash.

The loss of the Panama terminals, however, is expected to have little impact on the broader agreement as the two facilities account for only about 4 percent of the deal’s value.  

Countries have previously terminated concessions for private businesses to operate public infrastructure, with disputes in some cases resulting in compensation. Panama last year reclaimed land from a company after the firm failed to build a port on the site as required under a government concession.

In another case, Egypt’s Damietta Port Authority terminated a concession awarded to a private consortium to operate a container terminal in 2015. An international tribunal approved the consortium’s claim for damages in 2020. While Egypt’s top court later rejected the tribunal’s decision, the case was ultimately settled with a partial payout.

CK Hutchison’s legal moves are likely aimed at forcing Panama to the negotiating table, said Winston Ma, an adjunct law professor at New York University.

“The most probable long-term outcome is a financial settlement between the parties,” he said.