PANAMA CITY (AP) — The Panamanian government on Monday issued a decree ordering the occupation of two ports at the entrances of the Panama Canal, a move triggered by a final Supreme Court ruling that declared the operating concession held by Hong Kong-based company CK Hutchison unconstitutional.

The decree authorizes the Panama Maritime Authority to occupy the ports for “reasons of urgent social interest.” The occupation includes all movable property within or outside the Balboa and Cristóbal terminals, specifically covering cranes, vehicles, computer systems and software.

The saga surrounding the two Panamanian ports is part of a broader rivalry between the United States and China, in which the Central American country became caught in the middle after U.S. President Donald Trump accused China last year of “running the Panama Canal.”

CK Hutchison was slated to sell the two ports to a consortium that includes U.S. investment firm BlackRock, but this prompted swift intervention from the Chinese government, which halted the deal.

In January, Panama’s Supreme Court struck down the law approving the concession contract for Panama Ports Company, or PPC, a subsidiary of CK Hutchison. The ruling also invalidated an extension granted in 2021, stripping the port operations of any legal basis.

PPC has operated these terminals since 1997, when the state awarded it the concession to manage the ports located at the Pacific and Atlantic entrances to the Panama Canal.

Panama's government announced days ago that it will guarantee the continuity of port operations and job stability, and that APM Terminals, a subsidiary of the Danish group A.P. Moller-Maersk, would temporarily assume the administration of the terminals while a new contract is awarded.

Meanwhile, CK Hutchison Holdings started arbitration proceedings against Panama under the rules of the International Chamber of Commerce. It’s unclear what the impact of the proceedings would be and how long they could take. It also threatened to sue APM Terminals, if it operates the concession. The Danish group responded that it's not a party to the legal proceedings.

A PPC spokesperson told local media last week that the company was seeking an agreement with the Panamanian government to continue operating.

___

Follow AP’s coverage of Latin America and the Caribbean at https://apnews.com/hub/latin-america