PANAMA CITY, Jan 30 (Reuters) - A contract held by a

Hong Kong company to operate ports at the Panama Canal violated

the Panama constitution and did not serve ‌the public interest,

the country's Supreme Court said in a Thursday decision that

voided a deal made in the ​1990s.

The court issued its decision on Thursday, but it did not

formally release ‍its ruling or explain its rationale. Local

television station TVN ⁠first reported on the ⁠decision, which has

been reviewed by Reuters and confirmed by a court official.

The ruling gave Washington a ‌victory amid the intensifying

U.S.-China rivalry over global ​trade routes and President Donald

Trump's efforts to exert dominance in Latin America.

The court said in its decision that the contract ⁠held by

Panama Ports Company, a subsidiary ‍of Hong ​Kong's CK Hutchison ( CKHUF )

, violated Panama's constitution by giving the company

exclusive privileges and tax exemptions. The contract also

lacked a requirement for environmental impact assessments ‍and

said the government had to seek Panama Ports' approval before

granting other concessions, the court said.

"Disproportionate rights and prerogatives are granted to

PPC, creating conditions that effectively eliminate competition

and result in a monopoly in practice, even though no monopoly is

formally declared," the nine-member court said in a unanimous

decision.

"Furthermore, it places in private ​hands ‍decisions that

should be in the public interest ... prioritizing private

interests over the general welfare of society."

The decision could complicate CK Hutchison's ( CKHUF ) proposed $23

billion sale ​of dozens of ports worldwide - including the

Panamanian terminals - to a consortium led by BlackRock ( BLK )

and Mediterranean Shipping Company.

Trump had championed the proposed sale - particularly of

Panama Ports' assets - as a victory because it put operations at

the canal under a majority U.S. ownership. But China opposed the

sale and threatened to block the deal.

After the ruling, China's foreign ministry said ​it would

take "all necessary measures" to defend the rights and interests

of Chinese enterprises, and Hong Kong's government criticized

what it described as coercive interference by foreign

governments in international trade relations.