UPDATE 2-Panama court voids CK Hutchison port contracts

Panama's ‌Supreme Court late on Thursday annulled key port contracts held by a subsidiary of Hong Kong-based CK Hutchison because they were unconstitutional, leaving the future of operations along ⁠the Panama Canal unclear.

Panama's ‌Supreme Court late on Thursday annulled key port contracts held by a subsidiary of Hong Kong-based CK Hutchison because they were unconstitutional, leaving the future of operations along ⁠the Panama Canal unclear. Panama Ports Company, a CK Hutchison subsidiary, has held contracts since the 1990s to operate container terminals at the canal's Pacific and Atlantic entrances, separate from the waterway's operations.

The court said that after "extensive deliberation", it ​found the laws and acts underpinning the concession contract between the state and Panama Ports Company for ‍the development, construction, operation and management of port terminals at Balboa and Cristobal were unconstitutional. The ruling comes amid a growing U.S.-China rivalry over global trade routes and is seen as a win for Washington, where President Donald Trump has pushed to curb Chinese ⁠influence and boost ‌U.S. control over the ⁠Panama Canal, which carries about 5% of global maritime trade.

CK Hutchison did not immediately respond to a request for comment. Shares for ‍the company trading in Hong Kong were down more than 4% on Friday. The court decision could disrupt CK Hutchison's ​proposed sale of

dozens of ports worldwide , including the Panamanian terminals, to a consortium led by BlackRock and ⁠Mediterranean Shipping, a deal valued at nearly $23 billion.

BlackRock and Mediterranean Shipping did not immediately reply to requests for comment from Reuters. Critics of ⁠the contracts, which were extended in recent years, argued they disadvantaged Panama in addition to being unconstitutional.

The Supreme Court's decision could force Panama to restructure the legal framework needed to hold port operations contracts and potentially ⁠require new tenders to operate the terminals. Ensuring uninterrupted port operations is critical for shipping lines that rely on ⁠Panama as a transshipment ‌hub, where containers are transferred between vessels serving multiple routes.

Analysts have flagged the likelihood Panama Ports will lodge an arbitration complaint after losing the case.

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