Panama's Supreme Court annulled on Thursday the concession allowing Hong Kong-based CK Hutchison to operate ports at the Panama Canal, a year after US President Donald Trump threatened to seize the crucial passageway, claiming China controlled it, APA reports, citing France 24.
The case came after Trump threatened just days into his second term to take back the canal -- built by the United States and handed to Panama in 1999 -- as he said China was effectively "operating" it.
The Supreme Court found the laws that allowed CK Hutchison Holdings to operate two of the five ports of the canal "unconstitutional," according to a court statement.
The CK Hutchison subsidiary concerned by the ruling rejected the judgment, saying that it "lacks legal basis".
The ruling "jeopardizes not only PPC (Panama Ports Company) and its contract, but also the well-being and stability of thousands of Panamanian families who depend directly and indirectly on port activity," it said.
The lawsuit to cancel the concession was brought before the Panamanian high court last year on allegations that it was based on unconstitutional laws and that the Hong Kong business was not paying taxes.
Panama Ports Company -- a CK Hutchison Holdings subsidiary -- manages the ports of Cristobal on the canal's Atlantic entrance and Balboa on the Pacific side.
The concession was automatically renewed in 2021 for another 25 years.
Shares in CK Hutchison declined more than 4 percent in morning trading on the Hong Kong stock exchange on Friday.
CK Hutchison Holdings is one of Hong Kong's largest conglomerates, spanning finance, retail, infrastructure, telecoms and logistics.
It has sought to sell the Panama Canal ports to a consortium led by US asset manager BlackRock. The status of that proposal is unclear following the court ruling.
