Seatrade Maritime: Panama taking back land from failed Chinese port

Panama’s Ministry of the Presidency ordered the extraordinary expropriation, “in the public interest” of a series of 41 properties on the Atlantic Margarita Island in the Colon province. 

The land owned under a port concession by the Chinese port company Panama Colon Container Port (PCCP), and totals just over 27 hectares, will be transferred to the State.

The Executive Decree No. 90 of 20 October 2025, published in the Official Gazette, instructs the Public Registry to register the properties in the name of the Nation and authorises the Public Prosecutor’s Office to bring the case before the Judiciary to determine the amount to be paid by the State for the expropriations. 

China’s Panama Colon Container Port had a concession on Margarita Island for the development of a port since 2013. However, 12 years later, the port terminal has not been built. The concession is governed by a Contract-Law 43 of June 2013, approved by the National Assembly during the administration of former President Ricardo Martinelli.

The Panama Maritime Authority (AMP) cancelled the concession, in June 2021- because of no payments to the AMP and delays in developing the port- but retracted the decision and extended the concession to 2042. Last April, the AMP again cancelled the concession. 

The original concession had been awarded in 2013 by the government’s Cabinet to a group of eight Chinese and Taiwanese investors with no shipping or port experience.  In 2016, these investors sold to Shanghai Gorgeous, from China, as they could not develop the port nor make any substantial infrastructure investment in the project. 

In May 2022, Bahamas-based Notarc Management Group (NMG), a Latin American-focused private investment and asset management firm, announced the acquisition of the concession and plans for the completion of the $1.4 billion, 2.5 million teu- Panama Canal Container Port (PCCP) and its partnership with Terminal Investment Limited (TIL), an affiliate of Mediterranean Shipping Company, who would undertake management and oversee operations of the transhipment facility.  

In 2022, an addendum to the contract was approved by law, which calls for New York arbitration in the case of any dispute with the government.  One of the most important questions raised by the recent government expropriation is how Panama government decisions will proceed in an international arbitration in the United States as per the contract.

Since then, the PCCP construction of 1,000 lineal metres of pier, substantial dredging more than $100 million according to AMP documents, land compacting and grey works visible from photos of the area, are still visible today.  A Panama’s Comptroller-General audit made public in 2021 determined that PCCP had invested no less than $180 million at that time.

“It was not possible to carry out the procedure, as the owners do not have offices where the communications that were attempted to be presented could be made, and the legal representatives in the administrative contract resolution process also did not grant consent for such a procedure,” the Executive Decree states.

The Government adds that, to date, it has not been possible to establish an average value for these properties, which has prevented it from making an offer to purchase to the owner.

Meanwhile, Notarc Port Investment LLC and Landbridge Port Serviced (Hong Kong) Ltd maintain litigation in tribunals in Delaware (US) over 51% of PCCP shares ownership. The Chinese company called Landbridge is linked to the original investors via the late Eric Meng who appears on the original concession documents as representative until his death this year of China Landbridge. There is also a claim for embargo on the lands presented by Landbridge against PCCP.  In other words, a complex legal entanglement.

President Jose Raul Mulino announced there will be an international tender for the construction of a port in Margarita Island, in early 2026.  Future legal challenges from PCCP before the Supreme Court of Panama and pending New York Arbitration under the PCCP Contract Law may delay the process.

The expropriation on Margarita Island has reignited the debate on legal certainty and investment climate in Panama and when the logistics sector supports port development, it is cautious about the legal and economic effects of expropriation.