CK Hutchison set for hard fight to secure Panama port deal compensation: experts
Subsidiary has requested arbitration after Panamanian authorities voided concession contract but securing damages may be difficult, they warn
Hong Kong’s CK Hutchison could find it hard to secure compensation from Panamanian authorities over their decision to nullify its port operations, legal experts have said, noting that the arbitral tribunal it engaged lacks enforcement power and the issuance of damages may depend on the country’s own courts.
The conglomerate, led by tycoon Li Ka-shing’s family, said on Wednesday that its subsidiary, the Panama Ports Company (PPC), commenced arbitration against Panamanian authorities a day earlier.
The move was in response to a judgment of the country’s top court that declared PPC’s concession to operate two Panama Canal ports to be “unconstitutional”.
CK Hutchison said the decision to start arbitration was based on the concession contract and the Rules of Arbitration of the International Chamber of Commerce (ICC).
Legal academics and experts in Hong Kong highlighted enforcement challenges, as the ICC International Court of Arbitration’s role was to administer proceedings and it did not possess independent enforcement powers.
“Enforcement of an arbitral award is a matter for national courts,” said international commercial arbitration expert Yan Yueming, an assistant dean at the Chinese University of Hong Kong’s law faculty.