The case came after Trump threatened just days into his second term to take back the canal -- built by the United States and handed to Panama in 1999 -- as he said China was effectively "operating" it.
The Supreme Court found the laws which allowed CK Hutchison Holdings to operate two of the five ports of the canal "unconstitutional," according to a court statement.
The CK Hutchison subsidiary concerned by the ruling rejected the judgement, saying that it "lacks legal basis".
The ruling "jeopardizes not only PPC (Panama Ports Company) and its contract, but also the well-being and stability of thousands of Panamanian families who depend directly and indirectly on port activity," it said.
The lawsuit to cancel the concession was brought before the Panamanian high court last year on allegations that it was based on unconstitutional laws and that the Hong Kong business was not paying taxes.
Panama Ports Company -- a CK Hutchison Holdings subsidiary -- manages the ports of Cristobal on the canal's Atlantic entrance and Balboa on the Pacific side.
The concession was automatically renewed in 2021 for another 25 years.
Shares in CK Hutchison declined more than 4 percent in morning trading on the Hong Kong stock exchange on Friday.
CK Hutchison Holdings is one of Hong Kong's largest conglomerates, spanning finance, retail, infrastructure, telecoms and logistics.
It has sought to sell the Panama Canal ports to a consortium led by US asset manager BlackRock. The status of that proposal is unclear following the court ruling.
- 'Taking it back' -
Chinese state media has previously slammed the proposed sale, while Beijing officials have urged parties involved to exercise "caution", warning of legal consequences should they proceed without their clearance.
In April, the Panamanian Comptroller's Office accused the firm of allegedly failing to pay the state $1.2 billion from its operations, according to an audit by the agency in charge of overseeing public spending.
Panama has been trying to avoid being dragged into what President Jose Raul Mulino last year called a "geopolitical conflict."
Mulino has insisted the canal's neutrality is intact and has urged Washington not to entangle Panama in its rivalry with Beijing.
Still, Panama has taken steps to ease the pressure from Washington.
Last year it withdrew from China's Belt and Road Initiative, and earlier this month it announced new joint US-Panama canal defense drills -- the fourth since 2025 -- aimed at boosting readiness around the 50?mile (80?kilometre) trade route.
The canal has become a recurring flashpoint as Trump pursues what he calls the updated "Donroe Doctrine," asserting expanded US authority in the Western Hemisphere.
In his inauguration address, the US president said: "We didn't give it to China, we gave it to Panama. And we're taking it back."
At the same time, Beijing has sharply criticized moves against its assets in Panama, including the demolition late last year of a monument honoring Chinese workers who helped build the canal and the 19th?century railway that preceded it.
The United States and China remain the canal's top users, with around five percent of global maritime trade transiting from there.
What we know about CK Hutchison's deal in Panama ports
Hong Kong (AFP) Jan 30, 2026 -
Panama's top court has ruled that a concession allowing Hong Kong-based conglomerate CK Hutchison to operate ports at the crucial Panama Canal, which links the Pacific and Atlantic oceans, is unconstitutional.
The ports operator has said the decision "lacks legal basis" and threatens thousands of livelihoods.
Here's what we know about the companies and the deal:
- Ports operator -
Since 1997, the Panama Ports Company (PPC) has managed ports at each end of the Panama Canal via a concession from the Panama government: the port of Cristobal on the Atlantic side and Balboa on the Pacific side.
The concession was extended for 25 years in 2021.
PPC said last year that it is the "only port operator in the country where the state is a shareholder", and that it had paid the Panama government US$59 million in the past three years.
It also says its workforce is almost entirely Panamanian.
The company has said the top court's ruling "lacks legal basis and jeopardizes not only PPC and its contract, but also the well-being and stability of thousands of Panamanian families who depend directly and indirectly on port activity".
PPC's parent firm is CK Hutchison, one of Hong Kong's largest conglomerates spanning finance, retail, infrastructure, telecoms and logistics.
CK Hutchison was built from nothing by Li Ka-shing -- the richest man in the Chinese finance hub, nicknamed "Superman" for his business acumen.
It now has a hand in running 53 ports in 24 nations, including Britain, Spain and Australia.
Panama's five main ports are all located near the canal and are operated by concessionaires from the United States, Hong Kong, Taiwan and Singapore.
The canal is used mainly by the United States and China, and carries five percent of the world's maritime trade.
- Trump's threat -
Donald Trump has fixated on the question of who controls shipping in the Panama Canal, which Washington built more than a century ago and handed over to Panama.
The US president has repeatedly threatened the use of force to seize the canal, claiming CK Hutchison's ownership of two ports gave China control over the strategic waterway.
Panama rejected the claim that China had de facto control over the canal, which handles 40 percent of US container traffic, while taking various actions to appease Trump.
CK Hutchison announced in March last year that it would offload a 90 percent stake in PPC and sell a slew of other non-Chinese ports to a group led by US asset manager BlackRock for about US$19 billion.
Panama insisted that it had no hand in the sale, insisting it was a deal "between private companies".
Local authorities also began piling pressure on CK Hutchison, which handled 39 percent of the containers that passed through the country's docks in 2024, according to the Panamanian Maritime Authority.
Panama's Supreme Court has ruled in favour of Panama's attorney general that the concession granted to CK Hutchison was unconstitutional.
- China's warning -
Chinese state media previously slammed CK Hutchison's proposed sale of the ports to BlackRock, while Beijing officials have urged parties involved to exercise "caution", warning of legal consequences should they proceed without their clearance.
The deal cannot be viewed as purely commercial because the operations in the canal are instrumental to the Belt and Road Initiative, Beijing's flagship infrastructure programme, Chinese media said.
CK Hutchison has not publicly responded to criticism of the deal.
Analysts told AFP that China's fury at the sale of the Panama Canal ports to a US-led consortium reflected how container hubs have become prized currency as Beijing and Washington vie for global influence.
China's next moves in scrutinising CK Hutchison may also have far-reaching implications for Hong Kong and its role as China's business gateway to the world, analysts said.
Panama's administrator said in November that China is among the parties interested in bidding to build two new ports on the canal, despite US talk of retaking control of it.
CK Hutchison last year said it was looking to invite a Chinese "major strategic investor" to join discussions.
It had stated on several occasions that it "will not proceed with any transaction that does not have the approval of all relevant authorities".
The Hong Kong firm is exploring an alternative option to sell its ports by splitting the deal into separate parcels with new ownership terms to a consortium, Bloomberg reported this month.
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