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Danish shipping giant Maersk and Swiss-based MSC have taken over operations of two key ports on the Panama Canal after their Hong Kong-based operator was ejected last month, the Panamanian government said on Monday.

Panama’s Supreme Court last month annulled a contract with conglomerate CK Hutchison Holdings as operator of the Balboa and Cristóbal ports on the famous waterway after legal challenges.

The case stemmed from lawsuits dating back to 2021 and a government audit in 2025 alleging irregularities.

On Monday, the Panamanian government formally assumed control of the port facilities, including cranes, vehicles, computer systems and software, under a decree intended to guarantee their smooth operation until a new concession is awarded within 18 months.

President Raúl Mulino said the “occupation decree” was “an exceptional legal tool”.

“This does not imply any expropriation of these assets but their use to guarantee operation of the ports until their value can be determined,” he said.

Under the plan, a unit of AP Møller-Maersk will oversee the Balboa port on the Pacific side of the canal, while the port wing of MSC will run the Cristóbal port on the Atlantic side.

“This is a display of confidence in our country, which is recovering its image and the international status it should never have lost,” Mulino added.

He slammed CK Hutchison’s decades-long concession as having lacked “all transparency”, saying it had established “an autonomous territory in which the authorities counted for little”.

CK Hutchison said it had ceased operations at the terminals on Monday and described the takeover as “forceful” and “unlawful”.

Marliz Bermúdez, chief executive of APM Terminals Panama, a unit of Maersk, said the company’s priority was to safeguard continuity while installing a new operating system “so that the port can progressively resume operations”.

MSC did not respond to a request for comment.

MSC was part of a consortium, also including BlackRock, that struck a deal last year to take a 90 per cent stake in the unit that runs the two ports.

The $23bn deal won praise from US President Donald Trump, who hailed it as a sign his administration was “reclaiming” the canal. But Beijing later insisted that China’s state-owned shipping giant Cosco should have a majority stake, prompting the buyers to reconsider.

Alberto Alemán Zubieta, a former administrator of the canal, has been appointed to lead a technical team to oversee the transition period.

Mulino promised the tender for the ports would be done “with transparency, humility, so as not to repeat the errors of the past”.

Labour minister Jackeline Muñoz said there would be “no lay-offs”.

Hutchison has taken Panama to arbitration following the Supreme Court ruling, and Beijing has warned that the Central American country will pay a “heavy price” for the decision.

Beijing has invested substantial sums in Panama since the country switched diplomatic recognition from Taiwan in 2017.

Additional reporting by Jamie John in London