Hong Kong port operator contract violated Panama constitution, court rules

A contract held by a Hong Kong company to operate ports at the Panama Canal violated the Panama constitution and did not serve the public interest, the country's Supreme Court said in a Thursday decision that voided a deal made in the 1990s.



The court issued its decision on Thursday, but it did not formally release its ruling or explain its rationale. Local television station TVN first reported on the decision, which has been reviewed by Reuters and confirmed by a court official.



The ruling gave Washington a victory amid the intensifying U.S.-China rivalry over global trade routes and President Donald Trump's efforts to exert dominance in Latin America.



The court said in its decision that the contract held by Panama Ports Company, a subsidiary of Hong Kong's CK Hutchison , violated Panama's constitution by giving the company exclusive privileges and tax exemptions. The contract also lacked a requirement for environmental impact assessments and said the government had to seek Panama Ports' approval before granting other concessions, the court said.



The decision could complicate CK Hutchison's proposed $23 billion sale of dozens of ports worldwide - including the Panamanian terminals - to a consortium led by BlackRock and Mediterranean Shipping Company.