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

The decree authorizes the Panama Maritime Authority to occupy ports for “reasons of urgent social interest.” Occupancy includes all movable property inside or outside the Balboa and Cristóbal terminals, including 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 found itself caught in the middle after U.S. President Donald Trump accused China last year of “managing the Panama Canal.”

CK Hutchison was due to sell the two ports to a consortium including US investment firm BlackRock, but this prompted rapid intervention from the Chinese government, which terminated the deal.

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

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

The Panamanian government announced a few days ago that it would guarantee the continuity of port operations and employment stability, and that APM Terminals, a subsidiary of the Danish group AP Moller-Maersk, would temporarily assume administration of the terminals pending the award of a new contract.

Meanwhile, CK Hutchison Holdings has initiated arbitration proceedings against Panama under the rules of the International Chamber of Commerce. It is unclear what impact the procedure would have and how long it might last. It also threatened to sue APM Terminals if it exploited the concession. The Danish group responded that it was 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 operations.

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