American Marconi Wireless News - Panama takes control of canal ports from CK Hutchison

"The Panama Maritime Authority has taken possession of its ports and guarantees the continuity of operations," an official said after the Panamanian Supreme Court annulled Hutchison's contracts to operate the ports.

The court ruling was the latest legal move to ricochet through the interoceanic waterway which handles about 40 percent of US container traffic and five percent of world trade.

The Central American country has been swept up in broader tensions between Washington and Beijing, with US President Donald Trump claiming last year that China effectively runs the Panama Canal.

In January, the court had declared as "unconstitutional" the contract which had allowed Hutchison to manage the ports of Balboa on the Pacific and Cristobal on the Atlantic since 1997.

Hutchison had asked the Panamanian government to enter into negotiations to allow it to continue operating the two terminals, and on Friday a company spokesperson said such talks were necessary to "avoid chaos."

Publication of the ruling in the official gazette Monday effectively finalized the legal process, and the decision is not subject to appeal. The measure was formalized by a decree after publication in the gazette.

"The Panama Maritime Authority has taken possession of its ports and guarantees the continuity of operations," ports director Max Florez told reporters.

He said an 18-month transition period now begins, with the ports being operated by two other companies before contracts are awarded under a new international tender.

Labor Minister Jackeline Munoz assured there would be "no layoffs" at the two terminals, which employ some 1,200 people.

Following the court's January ruling, the Panama Maritime Authority said a division of the Danish Maersk Group would temporarily take over operation of the facilities.

Last week Hutchison warned of possible legal action against Maersk and others over the annulment of its contract. And the Hong Kong company has said it would challenge Panama's decision before the International Chamber of Commerce.

The Panama Canal was built by the United States, which operated it for a century before ceding control to Panama in 1999.

Panama has always denied Chinese control over the 80-kilometer (50-mile) waterway, which is used mainly by the United States and China.

H.E.Young--AMWN