The Panama Supreme Court ruled that a 'contract' held by a Hong Kong-based company to operate the ports of the Panama Canal was in violation of the Panama Constitution and did not serve the public interest.

The court released its decision on Friday, but did not explain the reasoning behind it. The decision was first reported by local TVN, and then confirmed by an official of the court.

The decision was a win for Washington amid?the intensifying U.S. - China rivalry over global trading routes and President Donald Trump’s efforts to exert dominance throughout Latin America.

In its ruling, the court stated that Panama Ports Company's contract, which is a subsidiary owned by Hong Kong-based CK Hutchison, violated Panama constitution because it gave the company exclusive tax benefits and privileges. The contract did not include a clause requiring environmental impact assessments, and the court ruled that the government must first seek approval from Panama Ports before it can grant any other concessions.

The nine-member court unanimously ruled that PPC was granted disproportionate rights and prerogatives, which effectively eliminated competition and led to a monopoly, even though there is no formal declaration of monopoly.

"Furthermore it places decisions in private hands that should be made in the public interest... prioritizing personal interests over the welfare of society."

The?decision? could complicate CK Hutchison’s proposed $23 Billion sale of dozens ports worldwide – including the Panamanian Terminals – to a consortium led BlackRock and Mediterranean Shipping Company.

Trump hailed the proposed sale, particularly the assets of Panama Ports, as a "victory" because it would put the operations at the Canal under "majority U.S. control". China, however, opposed the sale of Panama Ports' assets and threatened to block it.

China's Foreign Ministry?said that it would take 'all necessary measures' to defend the interests and rights of Chinese companies, while Hong Kong's Government criticized foreign governments for their 'coercive' interference in international trade. (Reporting and editing by Emily Green, Tom Hogue and Emily Green; Additional reporting and Kylie Madry by Natalia Siniawski)

(source: Reuters)