PANAMA CITY, March 20, 2026 (BSS/AFP) - Panama's president denied Thursday that officials failed to respond to an arbitrage lawsuit by the Hong Kong firm opposing the takeover of its Panama Canal operations, saying the government would "strongly" defend itself.

The dispute stems from a Panama court ruling in January striking down the contract that let Panama Ports Company (PPC), a unit of CK Hutchison, to manage the canal's Pacific port of Balboa and the Atlantic port at Cristobal.

The decision came after claims by US President Donald Trump that China effectively runs the canal, part of broader tensions between Washington and Beijing.

PPC responded with a lawsuit filed at the International Chamber of Commerce (ICC), and is seeking at least $2 billion in damages.

This week the company accused Panama officials of ignoring the arbitration proceedings, saying the country had not hired lawyers and "needed time to develop a plan."

"That is scandalous and a lie," President Jose Raul Mulino told reporters on Thursday.

"We have appointed international lawyers who are going to defend us... strongly in this case," he said, adding that Panama had been given just two days to prepare its response, and therefore had sought a delay.

China had threatened Panama with payback after the court's decision in January, and CK Hutchison said this month it had intensified its legal actions over the takeover of the two Panama Canal ports it controlled.

It said it had also filed an administrative petition urging Panamanian officials to reconsider the executive action that "led to the occupation of facilities and confiscation of property".

Panama has always denied any Chinese control over the 80-kilometer (50-mile) waterway, which is used mainly by the United States and China.